Do you buy what’s in stock or choose a custom build?
Choosing a custom-built machine can be the better choice when you need a specific configuration and lead time is less critical, while buying what’s in stock is better when speed matters most. A made-to-order machine may offer more flexibility and be a better fit for a specific job. However, buying an in-stock machine allows for quick availability and the opportunity to start making money with it sooner.
Things to Consider When Choosing an In-Stock Machine
Buying a machine that is already built might be the right move when timing is critical:
- You need capacity immediately: You are currently at or struggling with capacity and dealing with machine downtime or a growing backlog.
- The specs are close enough: The in-stock machine already matches your core requirements.
- Predictability matters most: You value a known delivery date more than waiting for a new machine to be built and shipped over.
Things to Consider When Choosing a Custom Build
Choosing to build a custom machine makes sense under the following conditions:
- You need specific features: Your application(s) require a factory-built configuration to most efficiently make your part(s).
- Your production can handle it: You can absorb the lead time without hurting your current production schedules.
For most shops, this comes down to cost versus time. Lean toward buying an in-stock machine if the configuration is close enough to what you need. Lean toward a made-to-order build if the special configuration is required to meet your part / production needs. Always consult with an expert before finalizing your decision.
A Simple Way to Decide
Still feeling torn? Use the following steps to help you make an informed decision:
- List your must-have specs: Write down the exact features and capabilities you need.
- Evaluate in-stock machines: Check whether an available machine meets those must-have requirements.
- Calculate the cost of waiting: Estimate the financial impact of the lead time, including lost revenue, overtime expenses, outsourcing costs, or missed jobs.
- Compare the numbers: Compare the total cost of waiting against the premium or the risk of buying an in-stock machine.
Calculating the Cost Difference
To make an accurate decision, you need to understand the true financial impact. The key question is not just “what does the machine cost?” but also, “What profit or contribution margin am I giving up each week I don’t have this machine?”
Estimate this loss as the value of lost output, plus the labor, overhead, and catch-up costs you’ll face afterward.
For Example…
Let’s look at how these numbers add up over a typical 4-week timeframe:
- Lost Margin: Imagine a machine that bills at $180 per hour. If you face a 4-week delay and expect 40 productive hours per week, your lost margin equals $28,800 ($180 × 40 hours × 4 weeks).
- Idle Labor: If waiting also creates 20 idle hours per week across two people who are paid $30 per hour, that adds $4,800 to your expenses ($30 × 2 people × 20 hours × 4 weeks).
- Total Impact: Before even counting potential overtime or late delivery penalties, the total cost of a 4-week delay comes out to $33,600. Having the additional machine capacity / capability may also help to land a new project, on the other hand not meeting delivery schedules due to not having the machine could cause a customer to pull a project.
Compare your total cost to the in-stock machine’s price. If waiting costs more, the in-stock unit might be the better deal. Looking for immediate machinery capacity? Browse our current in-stock inventory today!
