Reverse Engineering vs Buying New Equipment: Which Delivers Better ROI

The role of reverse engineering in Australia is enabling companies to avoid unnecessary machine replacements and save on expensive downtime by reproducing the failed component instead of replacing the entire machine.

In most cases, failure occurs due to one worn-out, faulty, or obsolete component and not because the system itself has failed.

Thanks to the latest technologies in reverse engineering, including 3D scanning, CAD modeling, and local manufacturing, Australian companies have the option of cheaper and more effective solutions.

In this guide, we will discuss the cost of reverse engineering compared to replacement and help you make the engineering and economic decision.

Executive Summary

Before making any investments in replacement equipment, companies must consider:

✔ The remaining life cycle of the equipment

✔ The costs of downtime

✔ The availability of spare parts

✔ The capital investments required

✔ Potential supply chain risks

✔ Performance requirements of assets

✔ Investment return

In some cases, reverse engineering of the broken component will yield similar results but at much lesser costs.

Why Is Equipment Replacement an Automatic Choice?

Most organizations make automatic efforts to replace their equipment due to:

• The preference by OEM for selling newer equipment
• Non-availability of engineering documentation
• Lack of knowledge regarding reverse engineering in the organization
• Purchase process favoring replacements
• Managements’ assumption that replacements reduce risks.

This decision ignores the high hidden costs incurred in the process of equipment replacement.

Additional Expenses Involved When Purchasing Equipment

Most decisions about buying equipment tend to concentrate on the cost of acquiring the equipment.

There are many costs involved in replacing your equipment.

Capital Expense (CAPEX)

Replacement of equipment in industries will require a lot of expenses.

The cost of acquisition is not all you have to pay.

Cost of Downtime

Sometimes the cost of downtime is the greatest cost involved.

The costs include:

• Delivery from vendors
• Shipping time
• Scheduling installation
• Testing and commissioning
• Training of the operator

For manufacturing plants, mining operations, and marine vessels, downtime might easily exceed the cost of the replacement component.

Case  Example

A production facility that generates income at $15,000 per day that stays down for twenty days can lead to:

$300,000 lost production opportunity

without accounting for the cost of the replacement.

Engineering & Integration Fees

Typically for new systems there will be the need for:

• Foundational change
• Mechanical engineering adjustments
• Electrical alterations
• Software integration
• Commissioning assistance

This is almost never included in early procurement discussions.

Spares & Maintenance Differences

A replacement system could require:

• New maintenance process
• Holding of new spares
• Training of staff
• New service agreements

The recurring nature of these fees adds to the cost of ownership.

Downtime: The Hidden Cost of Equipment Failure

Too many companies overlook the cost of equipment downtime because they only look at immediate repair costs.

Hidden costs might include:

Direct Costs

• Reduced production
• Unproductive labor costs
• Costs incurred through contractors
• Equipment leasing

Indirect Costs

• Customer non-delivery
• Production scheduling
• Overtime charges
• Logistical difficulties
• Reputational harm

In terms of mining, shipping, and manufacturing, downtime is likely the biggest risk faced with equipment failure.

The Case For Reverse Engineering

Reverse engineering is utilized not only to fix broken machines but also as a tool in asset lifecycle management.

In place of changing the whole machine, engineers reverse engineer the faulty part while retaining all of the value of the asset.

Reverse engineering is most suitable for use when:

• OEM cannot be reached
• The parts have gone out of production
• Available drawings have been lost
• Machine functions mechanically well
• Budget limitations prevail
• Downtime expenses are considerable

Reverse Engineering Criteria Before Equipment Replacement

Prior to deciding on replacement costs, engineering must evaluate:

Asset Remaining Life

Replacing the failed component in a machine with an additional 5-15 years of useful life could result in a much higher ROI than replacing the entire machine.

Structural Soundness

Important considerations include:

• Is the structural integrity of the frame intact?
• Are all systems working properly?
• Is the machine producing efficiently?

If the answer is affirmative, then replacement is not necessary.

Failure Mode Assessment

Engineers must analyze whether:

• The failure was an isolated case?
• Is it a regularly worn-out component?
• Or does it reflect the deteriorating condition of the entire system?

Spare Parts Availability Risks

Companies must consider:

• OEM support status
• Lead time risks
• Long-term availability of spare parts
• Reliability of the supply chain

Reverse engineering mitigates reliance on suppliers.

Reverse Engineering VS. Equipment Replacement: Cost Comparison

Case Study Example

An industrial plant suffers from malfunction of an important pump impeller.

Support from the OEM stopped several years back.

Plan A: Replace Whole Pump System

Plan B: Reverse Engineer the Impeller

Potential Saving

$77,000+

This type of cost differential explains why reverse engineering is increasingly adopted across Australian industry.

Reverse Engineering Vs Replacement – Decision Matrix

Scenario Description – Replacement of Marine Pump Housing

Issue

A shipowner faced a breakdown of the marine pump housing when undergoing routine servicing.

The supplier/manufacturer had ceased production well beyond a decade back.

Difficulties involved were:

• Lack of drawings
• Lack of spares
• Delayed supply chain from OEM
• Possible disruption to shipping

Analysis

The rest of the pump system was working fine.

Full replacement required:

• Replacement of equipment
• Modifications to mechanical systems
• Extra costs for installation

Solution Provided

The existing part was:

• Reverse engineered
• Digitally mapped
• Modelled in CAD software
• Manufacturing ready

Result

The shipowner was able to avoid replacing the entire system.

Areas For Design Improvement

The reverse engineering process creates opportunities to enhance design.

Materials Advancements

Advanced materials can provide:

• Enhanced wear resistance
• Enhanced corrosion resistance
• Extended part lifetime

Shape Optimization

Advanced engineering may uncover:

• Areas of stress concentration
• Areas susceptible to fatigue failure
• Unnecessary material use

Better designs will ensure higher reliability.

Process Enhancements

Advances in manufacturing technology may result in:

• Lower cost
• Shorter lead time
• Less variation

And thus better performing parts.

Why Australian Businesses Are Selecting Reverse Engineering Solutions

A number of market drivers explain the increased interest.

Lifetime Extension

Many pieces of equipment last decades.

Challenging Supply Chains

Imports are associated with:

• Longer lead times
• Delivery uncertainties
• Higher costs

Increasing Capital Costs

Replacing older equipment becomes more expensive each year.

Local Production Capability

The capability of the local Australian engineering industry to produce high-quality replacement parts increases each year.

Industrial Sectors Utilizing Reverse Engineering

Manufacturing

• Component machinery
• Tooling systems
• Production machinery

Mining

• Wear resistant components
• Crusher assemblies
• Pump systems
• Conveyor components

Marine

• Propellers
• Impellers
• Pump housings
• Assemblies

Food Processing

• Conveyor systems
• Machinery
• Processing systems

Infrastructure and Utilities

• Old mechanical components
• Custom assemblies
• Maintenance components

Why Choose CAD Deziners?

CAD Deziners offers complete engineering services for Australia-based industries.

Capabilities:

Reverse Engineering

Design of obsolete, damaged, and unsupported parts.

3D Laser Scanning

Creation of highly accurate 3D models of existing parts.

CAD Modelling

Development of manufacturing models.

Product Design and Development

Conversion of design ideas into real products.

Mechanical Drafting

Engineering drawing services for manufacturing.

Manufacturing Services

Support of prototype and production manufacturing processes.

Our staff collaborates with clients from manufacturing, mining, marine, industrial, and infrastructure industries to minimise downtime and optimise the use of assets.

Conclusion

When making the choice between reverse engineering and purchasing new equipment, you should consider the overall cost of operation throughout the entire lifespan of the equipment.

By opting for reverse engineering services, Australian companies will get the following benefits:

✔ Reduction of capital costs

✔ Minimisation of downtime

✔ Decrease in project turnaround

✔ Increase in longevity of equipment

✔ Enhancement of asset performance

Before spending on costly new equipment, companies should determine whether reverse engineering would provide a similar result at a significantly reduced price.