ROI – Worth Looking at the Details

ROI or Return On Investment is a way to gauge the productivity or profit/loss from money spent on an investment. In business, companies will use this information to determine if a project or investment is worth the risk, ultimately leading to a net profit gain as the end result.

Don’t waste your money

In my own personal experience, my wife and I were considering buying into a timeshare vacation property a few years ago. To enter into the agreement, the company required a $ 22,000 “buy-in” (financed of course) and a recurring cost of approximately $60/month for the next 22 years. This would have afforded us 124 “points” for nightly stays on our planned vacation. Their timeshare rentals are tiered into different room types – Studio, 1 bedroom, 2 bedroom or a 3 bedroom villas – with each room type costing a certain amount of points. For us to maximize the length of our stay, we would have to select the studio room which would have given 6 nights at a total of the 124 points.

We have visited this popular vacation destination several times so we know what the average cost is to spend a week on property and purchase theme park tickets for our stay. When we booked on our own, we spent on average a little less than $ 3,000 for 7 days which included our room each night and 6 day park passes per person.

The timeshare rental cost was just for the nightly stay, it didn’t include any park tickets, food or other recreations. On average, the cost for 6 days worth of park passes per adult is close to $ 450.00 and per child it was around $ 400.00. Considering there are 2 adults and 1 child (at the time) we had to pay an additional cost of $ 1,300.00.

So if we joined the timeshare and stayed for 1 week once a year, it was going to cost us approximately $ 3,020.00 ($ 1,720.00 (timeshare cost) + $ 1,300.00 in tickets). In this case, it was actually going to cost us MORE in the long run than if we booked a yearly vacation on our own (< $3,000), leading to a negative ROI. (not to mention, I really didn’t want to commit to the same vacation for the next 22 years!).

When discussing replacement compressed air blowoff solutions with a customer, many times they look at the purchase price of the device and question if it’s worth it for them to make a change. If you follow along with our blog, you will notice that over the last few months we have submitted several different entries relating to this topic, like replacing drilled pipe with our 12″ Super Air Knife resulting in a 47 day ROI or where a customer replaced 4 open copper tubes with our 1110SS Nano Super Air Nozzle and recurring their expenses in just 38 days. In these instances, we show the calculations in regards to the true cost of ownership and how quickly you can recover capital funds when considering the whole scope of the project.

At EXAIR, we are committed to providing Intelligent Compressed Air® Products that reduce compressed air consumption leading to a more efficient process, as well as increasing operator safety. If you are considering an EXAIR solution for your current process but have questions about price or performance, contact one of our application engineers for assistance.

Justin Nicholl
Application Engineer
justinnicholl@exair.com
@EXAIR_JN

 

Little things add up image courtesy of Nic McPhee via creative commons license

A Tale Of Two Engineering Projects

At our Boy Scout Troop meeting last night, we had adult volunteers in two rooms, putting their “day job” skills to use. Two of our troop parents are dental professionals, so they were working with the Scouts, as a group, to complete the requirements for their Dentistry Merit Badge. In the other room, a couple of other parents and I were making last-minute equipment preparations for the Troop’s annual Lenten Fish Fry.

Anyway, one of our projects this year is to fix or replace the fryer tank. Nobody knows how old it is or where it came from…one of our Assistant Scoutmasters has been around for almost 20 years, and it was here when he came. Now, it’s just a big metal box that sits on the stove and holds the oil that we fry the fish in, but with three engineers looking it over and coming up with ideas, it’s got the potential to be the most complex big metal box in the county. The current problem is only a ¼” crack near the top of a corner, but also on our “wish list” are items like:

*Handles: this tank is about 4 feet long, 3 feet wide, and 18 inches deep. It’s not heavy at all, but handles sure would make it easier to move around, wash, dry, etc.
*Drain: Currently, we use a small battery operated pump to empty about 10 gallons of oil out of it every Friday night. A strategically placed petcock valve will cut our clean up time to a fraction of what it currently is.
*Temperature control: these ideas ranged from a port for a permanently mounted thermometer to a thermocouple that we could tie in to a regulator in the gas line. We’re all scared of tapping into the gas line, so the thermometer is looking better and better. It’s always fun to see yourself on the news, but not when it’s because you were involved with a fire that burned a church building down.
*Material of construction: Stainless Steel is awesome, but we’re probably on more of an aluminum budget.

Last week, we had the pleasure of conducting an Efficiency Lab Test of a customer’s drilled pipe compressed air blowing device. It was doing the job, but it used a lot of air, it was loud, and it had been in place for as long as anyone could remember. As it turns out, our 12″ Aluminum Super Air Knife looks to be a viable solution to the items on their “wish list”: reduced air consumption, and lower noise levels…it’s going to cut both to a fraction of what they are currently. This is a significant improvement, because not only are they going to save $500-$1,000 per year on compressed air for each of two units, but the operators no longer have to wear hearing protection, since the maximum sound levels are going from 108 to 67 decibels…well below OSHA’s published 8-hour limit of 90 dBA.

These are two examples of what can happen when you get a couple of engineers involved in a project. If you’d like to find out how much you can save your wallet…and ears…by switching to EXAIR’s Intelligent Compressed Air Products, give me a call. If you find yourself hungry and on the east side of Cincinnati on a Friday night in the coming weeks, I can also tell you where to get a great meal in support of a great organization.

Russ Bowman
Application Engineer
russbowman@EXAIR.com
Twitter: twitter.com/exair_rb
Facebook: http://www.facebook.com/exair