Heraclitus, the Greek philosopher famously said, “Change is the only constant in life.” In times like the present, it feels like everything is changing - but for most people, this brings with it uncertainty and fear. However, change also means innovation, and in the world of technology and refrigeration, embracing change can lead to substantial rewards.

As part of a company that has been around for over 100 years, we know that change can be positive. We also know how seldom new advances in technology and equipment are implemented. I recently sat down and reviewed new and retrofit projects completed by CIMCO over the past 4 years to analyze why this is the case.

As I looked through 100 projects, I realized 95% of the upgrades were retrofits. Given that the lifecycle of most equipment is 20 to 25 years, this was not too surprising. However, 70% of these retrofits were ‘like for like’, and that’s where the resistance to change shines through

A ‘like for like’ replacement is where a piece of equipment is replaced with the exact same technology. I like to compare it to replacing a car. Yes, the car you bought 20 years ago may still be in the lot when you go to look for a new one, but why wouldn’t you consider a better model? One that has new features, drives smoother, and may last longer?

As an industry, refrigeration has its technological innovations, but it also offers the old technology to anyone who may want it.

Now the question is – why would you want to stick with the old model? As I looked through project after project, 5 main reasons started to emerge.

1. Lack of Awareness

This scenario highlights a significant oversight, where purchasers may inadvertently overlook superior options due to a lack of awareness. When supervisors remain uninformed about newer equipment and contractors fail to introduce innovative solutions, some consultants often default to replicating past practices.

To address this, it's crucial to foster a culture of continuous learning and exploration within procurement teams. This entails encouraging stakeholders to actively seek out information on cutting-edge technologies, engaging in industry forums, and collaborating with experts to stay informed about advancements.

2. Purchasing Challenges

Purchase departments are meant to procure products and services that fit the objective while ensuring value. However, when it comes to innovative technology such as new energy saving products, it is often difficult for purchasing to fulfill their objective due to limited bids by parties. Often, competing contractors will use purchasing bylaws and lack of access or competency to water down or diminish the original objective of the tender.

Today, organizations such as Canoe Procurement in Canada and Sourcewell in the US facilitate access to preferential pricing through trade-compliant purchasing programs. These initiatives harness the collective buying power of participating entities, offering several benefits. Firstly, they streamline procurement processes, saving time and resources for member organizations. Additionally, they provide access to a wider range of suppliers and products, fostering competition and driving down costs. Moreover, by ensuring compliance with trade regulations, these programs mitigate risks and uncertainties associated with international trade. Ultimately, leveraging such collaborative purchasing platforms empowers organizations to optimize their procurement strategies, achieve cost savings, and enhance operational efficiency.

3. Lack of Alignment

When internal decision-makers diverge in their priorities, particularly when it comes to balancing upfront costs against long-term benefits, it creates a significant hurdle in the procurement process. This misalignment often stems from differing perspectives on financial considerations versus strategic objectives.

To address this challenge, organizations can foster a culture of collaboration and open communication, ensuring decision-makers have a clear understanding of the organization's overarching goals. Additionally, providing comprehensive data and analysis showcasing the potential savings and positive impacts of proposed solutions can help bridge the gap between short-term cost concerns and long-term strategic objectives.

4. Incorrect Budgeting

Incorrect budgeting poses a significant challenge in procurement, with two main contributing factors. Firstly, budgets may overlook alternative options or present inadequate business cases rooted in outdated equipment paradigms. Secondly, newer and potentially more beneficial options might only be recognized after budgets have been finalized, leaving little room for adjustment.

To address this issue, organizations can implement proactive budgeting practices that involve thorough research and exploration of available options prior to budget allocation. Additionally, maintaining flexibility within budgeting processes to accommodate late-recognized opportunities can ensure that organizations capitalize on innovative solutions without being constrained by predefined financial constraints.

5. Resistance to Change

While embracing change can be challenging, remaining open to exploring newer options is crucial to unlocking potential benefits that may otherwise be missed. The solution lies in cultivating a mindset of curiosity and adaptability, wherein decision-makers actively seek out innovative solutions and remain receptive to new possibilities. By maintaining an open mind and thoroughly assessing available alternatives before making decisions, organizations can position themselves to capitalize on emerging opportunities and drive continuous improvement.

These factors collectively contribute to the prevalence of 'like for like' replacements in the refrigeration industry. However, the key to breaking this cycle lies in setting clear objectives, exploring all available options, and maintaining an open mind towards change. By doing so, businesses can unlock the full spectrum of benefits offered by technological advancements and innovation in refrigeration.