Hi Terence,
Thanks a lot for your clarification.
One scenario why we would not create equipments automatically is that:
We receive serialized material from third party and out of the lot, one fails in inspection. So in the event of rejection we would be left with a redundant equipment (object in database without actually being present physically) with a serial number which may not be valid (having failed in quality). (We can not change serial number assignment of an equipment, can we?).
Am I correct in my contention or is there some other angles to it as well (with SAP as it is you can never be sure 
). Kindly list one or two for a better perspective (on my part).
Best regards