What is the cost impact of a change out?

Change outs have high upfront costs for new equipment, installation labor, and training. However, they often reduce long-term costs by eliminating frequent repairs, reducing downtime, and improving equipment efficiency and reliability. ROI is typically seen within 2 to 5 years.

Change Out: Definition, Process and How to Execute It

Definition: A change out is the complete replacement of installed equipment or a major subsystem with new, refurbished, or reconditioned equipment. Unlike a repair, which fixes a component in place, a change out removes the old equipment entirely and installs a functional alternative in its place.

How a Change Out Works

A change out follows a structured process:

1. Assess the Equipment

The maintenance team evaluates whether the broken equipment can be economically repaired. If repair costs exceed 50 to 70 percent of replacement cost, or if the repair timeline is too long, a change out becomes the better option.

2. Source Replacement Equipment

The team identifies and sources replacement equipment. Options include new equipment, factory-refurbished units, or reconditioned equipment from reliable suppliers. Lead times vary from days to months depending on availability.

3. Plan the Installation

Schedule the change out during low-demand periods or planned maintenance windows. Coordinate with production, identify required tools and labor, and prepare workspace. Ensure the replacement equipment fits physically and integrates with existing systems.

4. Remove and Install

Disconnect and remove the old equipment safely. Install and connect the new equipment, verify connections, test functionality, and calibrate if necessary. Dispose of or return the old equipment according to regulations.

5. Train and Validate

Train operators and maintenance staff on the new equipment. Run test cycles, monitor performance, and make adjustments. Document the change in asset management systems and work order records.

Change Out vs. Repair: Key Differences

Aspect	Repair	Change Out
Scope	Fix broken component or system in place	Replace entire equipment or subsystem
Cost	Lower upfront, may repeat frequently	High upfront, lower long-term costs
Downtime	Varies, can be quick or extended	Often shorter, more predictable
Complexity	May require specialized skills	Installation and integration planning needed
When used	When parts are available and economical	When repair is uneconomical or parts unavailable

When to Change Out Instead of Repair

Economic Threshold

If repair cost would be more than 50 to 70 percent of the cost of replacement equipment, replace it. The exact threshold depends on how much reliability and performance you gain from new equipment.

Parts Availability

If spare parts for the equipment are no longer manufactured or available from suppliers, repair becomes impossible. A change out is the only option.

Extended Downtime

If repair would require weeks of waiting for parts or technical support, but a change out could be completed in days, the faster option usually wins. Every day of downtime costs money.

End of Life

Equipment nearing the end of its life cycle will fail repeatedly. If you have already repaired it multiple times in recent years, a change out stops the cycle of reactive maintenance.

Performance Improvement

New equipment often offers better efficiency, lower energy consumption, or improved capabilities. If operational benefits justify cost, a change out makes sense even if the old equipment could be repaired.

Change Out Planning Checklist

Obtain capital approval and budget authorization
Select and order replacement equipment with sufficient lead time
Schedule the change out during low-demand or planned maintenance period
Verify new equipment specifications match existing installation
Identify and stage required tools, fasteners, and spare parts
Arrange labor for removal, installation, and cleanup
Identify disposal or return logistics for old equipment
Notify affected departments of planned downtime
Prepare documentation and asset tagging updates
Plan training sessions for operators and maintenance staff
Conduct safety review and identify hazards
Create test and validation plan before returning to production

Cost Analysis: Change Out vs. Repeated Repairs

Consider a conveyor belt system that has failed twice in the past year. Each repair costs 8,000 dollars and takes 3 days to complete. A new belt system costs 30,000 dollars and takes 2 days to install.

If you continue repairing, you will likely need repairs again within a year. Over three years, you might spend 24,000 dollars in repairs plus 9 days of downtime. The change out costs more upfront but eliminates future failures and pays for itself through reduced maintenance labor and production loss.

A proper cost analysis includes not just repair and replacement costs, but also downtime expenses, labor, and the value of improved reliability.

Practical Examples of Change Outs

Manufacturing Example

A hydraulic pump on an injection molding machine fails. The pump is 12 years old. A new replacement pump costs 5,000 dollars. The internal repair would cost 3,500 dollars and take 10 days. However, the pump design is outdated and spare parts are hard to find. The manufacturer recommends a change out for newer, more reliable models. The decision is to change out the pump to a newer, more efficient model.

Food and Beverage Example

A refrigeration unit in a cold storage warehouse loses efficiency and requires frequent compressor repairs. Change out the aging refrigeration system with a new energy-efficient model. Initial cost is high, but lower electricity consumption pays back the investment in 4 to 5 years while improving product safety.

Mining Industry Example

A large electric motor driving a primary crusher fails. The motor is custom-sized and would take 6 weeks to repair using specialized technicians. A change out with a refurbished motor of identical specifications can be done in 3 days. Despite cost, the reduced downtime makes the change out the clear choice.

Change Out Impact on Maintenance Strategy

Change outs are part of a broader asset life cycle strategy. Modern asset management systems track equipment age, repair history, and cost trends. When data shows a piece of equipment is becoming a burden, a planned change out prevents emergency situations and unplanned maintenance.

Predictive maintenance tools can predict when equipment will likely fail, allowing change outs to be scheduled proactively rather than reactively. This maximizes operational continuity and minimizes crisis management.

Plan Your Equipment Changes with Asset Management

Track equipment age, repair costs, and reliability trends to make informed decisions about change outs. Plan replacements before failures occur and minimize emergency downtime.

Learn About Asset Performance Management

Frequently Asked Questions

What is the difference between a change out and a repair?

A repair fixes a broken component or system in place. A change out replaces the entire equipment or subsystem with a new or refurbished unit. Repairs are typically less costly upfront but may need to be repeated. Change outs have higher initial cost but often provide better long-term value through improved reliability.

When should you change out equipment instead of repairing it?

Change out equipment when repair cost exceeds 50 to 70 percent of replacement cost, when spare parts are no longer available, when downtime for repair would be too long, or when the equipment is near the end of its service life and will require frequent future repairs. A cost-benefit analysis should always guide the decision.

How do you plan a change out?

Plan a change out by assessing repair vs. replacement costs, sourcing replacement equipment, verifying specifications and fit, scheduling during low-demand periods, obtaining necessary tools and labor, training staff on the new equipment, and planning removal and disposal of the old equipment. Create a detailed project plan with timelines and contingencies.

Can you use refurbished equipment for a change out?

Yes. Refurbished or reconditioned equipment can be cost-effective alternatives to new equipment. Ensure the refurbished unit comes with a warranty, has been tested thoroughly by the supplier, and meets your specifications. Refurbished equipment often costs 40 to 60 percent less than new while providing similar reliability.

The Bottom Line

A change out is a strategic decision to replace equipment entirely rather than continue repairing it. When repair costs are high, spare parts are unavailable, or equipment is becoming unreliable, a change out eliminates the cycle of reactive maintenance and provides long-term value.

Proper planning minimizes disruption and ensures the new equipment is installed correctly and integrated smoothly. Using asset management systems to track equipment condition and costs helps maintenance teams make informed change out decisions before failures create crises. The result is more predictable operations, lower total costs of ownership, and improved reliability.