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I would not put that into the planned obsolescence category necessarily. Factoring in the lifetime value of a customer doesn't imply that. On heavy machinery th

I would not put that into the planned obsolescence category necessarily. Factoring in the lifetime value of a customer doesn't imply that. On heavy machinery there are/can be parts that just really wear down/need maintenance. One of the questions is how profitable is the manufacturing, sell, and maintenance of farm equipment (for example)? Maybe some of the wallets redistribute between buyers, sellers, and maintenance firms - maybe not if the economics are poor. If the profits were to come mostly from maintenance, then pricing could not just stay where it is (absent new market entries creating downward pressure).

libertine 5y ago
>If the profits were to come mostly from maintenance, then pricing could not just stay where it is (absent new market entries creating downward pressure). I just can't wrap my head around that. I mean, if that was the case then probably asset depreciation/wear should be reframed in accounting/finance, because not only they lose value but they have a added cost (arguably planned, since it's part of the pricing structure and business model of that equipment). In the end you're just paying to rent parts that will need to be replaced and paid for, because the equipment won't work without it and they can only be serviced by X player... farming equipment became just extremely large printers, where buy them cheaper to then get looted on refills?
- throw0101a 5y ago
  >> If the profits were to come mostly from maintenance […] > I just can't wrap my head around that. How do you think the automobile industry works? Supposedly most dealerships make their money in the service centre.
  - Turing_Machine 5y ago
    To the extent they make money at all, many open source projects make it by providing service and support.
- RandomLensman 5y ago
  Hypothetical example (might not be how it works with farming equipment): sell the combined harvester at cost, then have profits on a maintenance contract (note: might not even be the parts themselves that create the profit). With complex modern machinery, maintenance and repair is something that really matters (downtime costs money) and depending on the equipment, it is something where the manufacturer has a real edge, for example, in large industrial machinery. Not talking about some trivial upkeep here. The asset depreciation/wear side would only be with the buyer, not the seller. So if the buyer where show a balance sheet, then maybe there is something to argue about - not sure what farms do or don't do from an accounting perspective (or need to do). Not everyone needs a balance sheet drawn up. This is not too dissimilar from selling a gaming console at a loss/at cost and making the money on the games, I reckon.
  - libertine 5y ago
    >With complex modern machinery, maintenance and repair is something that really matters (downtime costs money) and depending on the equipment, it is something where the manufacturer has a real edge, for example, in large industrial machinery. Not talking about some trivial upkeep here. That's why documentation, schematics, software should be accessible by anyone who wants to fix this type of equipment. It's the difference between a mechanic going up to your farm, plug the equipment to the PC, run the diagnostic, replace part, instead of you have to call a truck, pay for the shipping of the equipment to the closest authorized dealer, and then have it looked up -> this second options costs way more time/money. But if things are getting so complex you need to haul equipment that weight tons back to the factory, then is that complexity sustainable at all?
    - RandomLensman 5y ago
      I know little about the specifics of farm machinery and it might very well work with schematics etc. so that stuff can be fixed by anyone reasonably skilled (and having access to the right parts and tools). However, for some machinery (might not be in farming) it will need real training so even with schematics, docs etc. we do not want untrained people to fix it. These people might not work for the manufacturer, but repairing is "gated" in a sense (repairing commercial aircraft, for example). As far as onsite vs. shipping is concerned, I think with really heavy equipment most maintenance will be onsite as shipping makes no sense at some point/transport is next to impossible.

libertine 5y ago

>If the profits were to come mostly from maintenance, then pricing could not just stay where it is (absent new market entries creating downward pressure). I just can't wrap my head around that. I mean, if that was the case then probably asset depreciation/wear should be reframed in accounting/finance, because not only they lose value but they have a added cost (arguably planned, since it's part of the pricing structure and business model of that equipment). In the end you're just paying to rent parts that will need to be replaced and paid for, because the equipment won't work without it and they can only be serviced by X player... farming equipment became just extremely large printers, where buy them cheaper to then get looted on refills?

throw0101a 5y ago
>> If the profits were to come mostly from maintenance […] > I just can't wrap my head around that. How do you think the automobile industry works? Supposedly most dealerships make their money in the service centre.
- Turing_Machine 5y ago
  To the extent they make money at all, many open source projects make it by providing service and support.
RandomLensman 5y ago
Hypothetical example (might not be how it works with farming equipment): sell the combined harvester at cost, then have profits on a maintenance contract (note: might not even be the parts themselves that create the profit). With complex modern machinery, maintenance and repair is something that really matters (downtime costs money) and depending on the equipment, it is something where the manufacturer has a real edge, for example, in large industrial machinery. Not talking about some trivial upkeep here. The asset depreciation/wear side would only be with the buyer, not the seller. So if the buyer where show a balance sheet, then maybe there is something to argue about - not sure what farms do or don't do from an accounting perspective (or need to do). Not everyone needs a balance sheet drawn up. This is not too dissimilar from selling a gaming console at a loss/at cost and making the money on the games, I reckon.
- libertine 5y ago
  >With complex modern machinery, maintenance and repair is something that really matters (downtime costs money) and depending on the equipment, it is something where the manufacturer has a real edge, for example, in large industrial machinery. Not talking about some trivial upkeep here. That's why documentation, schematics, software should be accessible by anyone who wants to fix this type of equipment. It's the difference between a mechanic going up to your farm, plug the equipment to the PC, run the diagnostic, replace part, instead of you have to call a truck, pay for the shipping of the equipment to the closest authorized dealer, and then have it looked up -> this second options costs way more time/money. But if things are getting so complex you need to haul equipment that weight tons back to the factory, then is that complexity sustainable at all?
  - RandomLensman 5y ago
    I know little about the specifics of farm machinery and it might very well work with schematics etc. so that stuff can be fixed by anyone reasonably skilled (and having access to the right parts and tools). However, for some machinery (might not be in farming) it will need real training so even with schematics, docs etc. we do not want untrained people to fix it. These people might not work for the manufacturer, but repairing is "gated" in a sense (repairing commercial aircraft, for example). As far as onsite vs. shipping is concerned, I think with really heavy equipment most maintenance will be onsite as shipping makes no sense at some point/transport is next to impossible.