Capital Spending Under Scrutiny: The Case For Pre-Owned Equipment In Drug Manufacturing

By Justin Kadis

Capital spending decisions are facing increased scrutiny as procurement managers and CFOs work to deliver faster payback and greater value. A key strategy to accomplish this is to consider how used equipment can offer a distinct advantage over new machinery when it comes to return on investment (ROI). Used equipment allows for faster deployment, a lower total cost of ownership, and in many cases, performance that is comparable to new systems. This is due to a variety of factors, including lower capital outlay that leads to a shorter payback period, reduced depreciation that improves balance sheet optics, and quicker commissioning that allows for faster production and revenue generation. To effectively compare used and new equipment, it’s essential to evaluate ROI across four key dimensions: payback period, internal rate of return, total cost of ownership, and net present value.