Increase Capacity vs. Purchase a Generator
I personally faced the question while managing an Extrusion factory in Nairobi Kenya before joining Insta-Pro. My hope is to offer some insight to you, by sharing my thoughts and the decision I took.
We were working three shifts, 24 hours, all year round. Every time the power went out we delayed sales or lost them entirely to the competition. This would happen once a week, sometimes every afternoon and even for days on end!
Our competitors had enough capital to afford a generator and boy did they run that generator!
To make things worse, were just starting out and would be pushed completely out of business if we did not find a solution and fast.
I needed a solution that not only allowed us to continue selling during a blackout, but one that also enabled us to get ahead in the game. You see being new entrants to the market, we had to always stay ahead to survive. Number two was not good enough, we would be shut down.
What did we do? We increased our capacity, we did NOT buy a Generator.
I know that a good number of oil seed processing factories are in parts of the world that experience constant power interruptions just like we did. These tend to be parts that also do not have a lot of expendable capital available. Interestingly enough, these markets are on a growth trajectory given the need for food security.
Instead of procuring a generator, it may be worth considering increasing capacity!
The logic is this; you are in a market that is growing, so if you continue to make the right decisions, sooner or later, it is inevitable that you will have to increase your capacity anyway. The increased capacity will enable you to produce surplus and store, to be able to continue selling despite power interruptions.
Should you choose to procure a generator instead, the capital spent doing so will sit idle, waiting for a power interruption!
Increased capacity will also give you more modules to run, ensuring that when one line is down for service and maintenance, the other can continue producing. Having a generator instead, only adds another piece of equipment whose failure or damage will cause production to stop entirely, should this happen during a blackout. Further still, most generators run on petrol engines that are both noisy and a fire hazard.
More often than not, the most obvious solution isn’t the best option. Patience, consideration deliberation and consultation will yield solutions that may have not been apparent in the beginning, but are arguably the best way forward.