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 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
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-
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.
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-
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-
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.
Generic Layout drawing of compressed air piping system.
In order to fully understand how efficient your compressed air system may be, you will need to generate a system pressure profile at some point. This is a list or diagram of what pressures you have in your compressed air system at specific locations, as well as the pressure required by all the demand devices on your compressed air system.
One of the reasons for the pressure profile is that you may have an application that is far away from the compressor but also highly dependent on a specific operating pressure. You may also find an application that, due to pressure losses within the system, causes an artificially high pressure demand.
The list below gives the critical points for measuring your compressed air system profile.
At the air compressor discharge. (If using multiple compressors, measure at each.)
If dryers of any type are being used after the compressor measure downstream from the dryer.
Downstream of each filter. (If a particulate filter and oil removal filter are being used it is best to measure downstream of each individual device. This is to tell when you have more than a 5 psig pressure drop or a clogged filter.)
After each intermediate storage device, such as receiver tanks.
At the point just before the main line from your compressor room branches off to distribution.
The furthest point of each header line you have installed.
On both sides of every filter/regulator units that are at high pressure point of use applications.
To give you an idea of why it is so important to measure these locations, take a look at the blogs we have posted on pressure drop. (Link Here) As you can tell by the list of blogs that comes up, pressure drop through piping can really cause a lot of wasted energy in your compressed air system. If you can get a good base line measurement by utilizing a pressure profile then you can start the process to optimizing your compressed air system.
The EXAIR Six Steps To Optimizing Your Compressed Air System.
Last week, I received an email from a satisfied customer, after he had already purchased our product. Come to find out this customer had not spoken to an application engineer during the planning stage to make their purchase. With our excellent resources listed at EXAIR.com, the customer was able to fulfill his application without even speaking to us. After his initial email of thanks, he also shared with me some details of his application that I want to share with you today.
The customer works as a machinist at a large aircraft part manufacturer. The parts require a very tight tolerance. A sample of each part needed to be gauged and measured in an automatic thread gauging machine or a coordinate-measuring machine (CMM). Their machining process required a water based flood coolant, so each part would be coated in water based coolant and chips, which needed to be remove before gauging. Before visiting EXAIR’s site, the company used a variety of homemade and commercial blow offs, as safety air gun tips. Here is a photo of (20) of the (25) nozzles the customer was using.
As you can see, the nozzles vary in design purpose, flow and safety. Most of the nozzles feature a cross drilled hole or a secondary escape path, but not all of the nozzles do. Any nozzle without a secondary relief port violates OSHA standard CFR 1910.242(b), so replacing some of the nozzles increased the safety in the plant. Secondly, these nozzles are wasteful in their use of compressed air because some were designed as liquid nozzles and have large exit holes. A hole that is 1/8″ in diameter at the nozzle outlet can consume up to 21.4 SCFM of compressed air at 80 PSIG. For comparison, the model 1103 Mini Super Air Nozzle with a 1/8″ NPT inlet will flow 10 SCFM at 80 PSIG, which would be a 53% compressed air savings. In 24 running hours, the 1103 nozzle will save 16,416 Standard Cubic Feet, which the plant spent $4.10 for a standard industrial compressor to produce (The standard for compressed air cost is $0.25 per 1,000 SCF). Replacing just one 1/8″ drilled hole with 1103 Mini Super Air Nozzle saves the aircraft company $1,026 over 250 working days running 24 hours a day.
Neither of these were the real reason that the customer emailed to thank us though. He was actually an office employee just entering the work force. Starting in June until after the company finally acquiesced to his request to buy a better, quieter nozzle near the end of July, he had left work needing an aspirin to relieve the headache he acquired due to the noise from these other nozzles. The nozzles the machining center had been using would create noise levels between 88-100 dBA at 80 PSIG of inlet pressure. For reference OSHA mandates that employees are required to wear hearing protection, if they are exposed to noise levels over 90 dBA over an 8 hour work day. The employees doing the machining wear hearing protection, but the employees in the office were still exposed and affected by the noise level. This is just one anecdotal example, but everyday more and more research shows that noise exposure has a negative effect on our health and productivity in the workplace. If you are interested in more information here are some links to a number of studies/research – please read this, here or this.
Anyway, that’s enough of my soapbox. The company purchased 25 of EXAIR’s 1103 Mini Super Air Nozzles and utilizing the same guns they were currently using saw between a 10-15 dBA decrease in noise levels near the work stations. Here is a photo of one of their setups with the model 1103 installed on one of their current air guns.
The 1103 Super Air Nozzle is an engineered solution to replace a plethora of commercial nozzles. It was a simple and cost effective retrofit which increased the comfort of employees.
We know that every time they squeeze that air gun trigger they will be using less compressed air than before, and we know they are now in compliance with OSHA. But the best benefit for EXAIR is we know that the engineer took the time to email us to thank us for taking away his headache everyday. That’s enough for me.
