The Impressive ROI of an Engineered Air Nozzle

You may have asked…why should I switch over to an engineered air nozzle if my system already works? Or…How can air nozzles be much different?

Manufacturing has always been an advocate for cost savings, where they even have job positions solely focused on cost savings. Return on Investment (ROI) is a metric they look toward to help make good decisions for cost savings.  The term is used to determine the financial benefits associated with the use of more efficient products or processes compared to what you are currently using. This is like looking at your homes heating costs and then changing out to energy efficient windows and better insulation. The upfront cost might be high but the amount of money you will save over time is worth it.

Model 1100 Super Air Nozzles can save compressed air dollars and increase safety

But how is ROI calculated? It is very simple to calculate out your potential savings of using one of EXAIR’s Intelligent Engineered Compressed Air Products. If you would rather not do the calculations out yourself then we can do it for you by sending the item in question to our Efficiency Lab Testing. The Efficiency Lab Testing is a free service that we offer to show you the possible savings by switching to one of our products.

The following is a simple ROI  calculation for replacing open blowoffs with an EXAIR Super Air Nozzle:

  • ¼” Copper Pipe consumes 33 SCFM at 80 psig (denoted below as CP)
  • A Model 1100 ¼” Super Air Nozzle can be used to replace and only uses 14 SCFM at 80 psig (denoted below as EP)

Calculation:

(CP air consumption) * (60 min/hr) * (8 hr/day) * (5 days/week) * (52 weeks/year) = SCF used per year for Copper Pipe  

(33) * (60) * (8) * (5) * (52) = 4,118,400 SCF

(EP air consumption) * (60 min/hr) * (8 hr/day) * (5 days/week) * (52 weeks/year) = SCF used per year for EXAIR Product  

               (14) * (60) * (8) * (5) * (52) = 1,747,200 SCF

Air Savings:

SCF used per year for Copper Pipe – SCF used per year for EXAIR Product = SCF Savings

               4,118,400 SCF – 1,747,200 SCF = 2,371,200 SCF in savings

If you know the facilities cost to generate 1,000 SCF of compressed air you can calculate out how much this will cost you would save. If not, you can us $0.25 to generate 1,000 SCF which is the value used by the U.S. Department of Energy to estimate costs.

Yearly Savings:

                (SCF Saved) * (Cost / 1000 SCF) = Yearly Savings

                                (2,371,200 SCF) * ($0.25 / 1000 SCF) = $592.80 annual Savings

With the simple investment of $42 (as of date published) you can calculate out the time it will take to pay off the unit.

Time Until payoff:

                (Yearly Savings) / (5 days/week * 52 weeks/year) = Daily Savings

                                ($592.80/year) / (5 days/week * 52 weeks/year) = $2.28 per day

                (Cost of EXAIR Unit) / (Daily Savings) = Days until product has been paid off

                                ($42) / ($2.28/day) = 17.9 days  

As you can see it doesn’t have to take long for the nozzle to pay for itself, and then continue to contribute toward your bottom line. 

If you have any questions about compressed air systems or want more information on any of EXAIR’s products, give us a call, we have a team of Application Engineers ready to answer your questions and recommend a solution for your applications.

Cody Biehle
Application Engineer
EXAIR Corporation
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EXAIR’s Return on Investment For One Engineered Air Nozzle is Amazing!

Return on Investment (ROI) is a measure of the gain (preferably) or loss generated relative to the amount of money that was invested.  ROI is typically expressed as a percentage and is generally used for financial decisions, examining the profitability of a company, or comparing different investments.  It can also be used to evaluate a project or process improvement to decide whether spending money on a project makes sense.  The formula is shown below-

ROI
ROI Calculation
  • A negative ROI says the project would result in an overall loss of money
  • An ROI at zero is neither a loss or gain scenario
  • A positive ROI is a beneficial result, and the larger the value the greater the gain
1100group
Our catalog publishes most products’ performance and specification data for a compressed air supply pressure of 80psig.

Example – installing a Super Air Nozzles (14 SCFM compressed air consumption) in place of 1/4″ open pipe (33 SCFM of air consumption consumption) .  Using the Cost Savings Calculator on the EXAIR website, model 1100 nozzle will save $1,710 in energy costs. The model 1100 nozzle costs $42, assuming a $5 compression fitting and $45 in labor to install, the result is a Cost of Investment of $92.00. The ROI calculation for Year one is-

ROI2

ROI = 1,759% – a very large and positive value.  Payback time is only 13 working days!

If you have questions regarding ROI and need help in determining the gain and cost from invest values for a project that includes an EXAIR Intelligent Compressed Air® Product, feel free to contact EXAIR and myself or one of our Application Engineers can help you determine the best solution.

Jordan Shouse
Application Engineer

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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

ROI – Return on Investment

Return on Investment (ROI) is a measure of the gain (preferably) or loss generated relative to the amount of money that was invested.  ROI is typically expressed as a percentage and is generally used for personal financial decisions, examining the profitability of a company, or comparing different investments.  It can also be used to evaluate a project or process improvement to decide whether spending money on a project makes sense.  The formula is shown below-

ROI

  • A negative ROI says the project would result in an overall loss of money
  • An ROI at zero is neither a loss or gain scenario
  • A positive ROI is a beneficial result, and the larger the value the greater the gain

Gain from investment could include many factors, such as energy savings, reduced scrap savings, cost per part due to increased throughput savings, and many more.  It is important to analyze the full impact and to truly understand all of the savings that can be realized.

Cost of investment also could have many factors, including the capital cost, installation costs, downtime cost for installation, and others.  The same care should be taken to fully capture the cost of the investment.

Example – installing a Super Air Nozzles (14 SCFM compressed air consumption) in place of 1/4″ open pipe (33 SCFM of air consumption consumption) .  Using the Cost Savings Calculator on the EXAIR website, model 1100 nozzle will save $1,710 in energy costs. The model 1100 nozzle costs $37, assuming a $5 compression fitting and $50 in labor to install, the result is a Cost of Investment of $92.00. The ROI calculation for Year 1 is-

ROI2

ROI = 1,759% – a very large and positive value.  Payback time is only 13 working days.

Armed with the knowledge of a high ROI, it should be easier to get projects approved and funded.  Not proceeding with the project costs more than implementing it.

If you have questions regarding ROI and need help in determining the gain and cost from invest values for a project that includes an EXAIR Intelligent Compressed Air® Product, feel free to contact EXAIR and myself or one of our Application Engineers can help you determine the best solution.

Brian Bergmann
Application Engineer

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