ROI – Is it Worth the Investment?

Any time you’re planning to purchase something, the return on investment (ROI) is an important thing to consider. Whether you’re considering buying new windows to improve on your heating and cooling costs, looking at replacing outdated appliances with newer and more efficient models, or purchasing an Intelligent Compressed Air Product, how quickly that product will pay for itself can help you to make the right decision.

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Last year, my wife and I purchased our first home. In the backyard, was a nice, big in-ground pool. While it was something we did look for, it requires a bit of maintenance during the summer months to keep the water clear and things running smoothly. Who wants to swim in a pool ridden with dirt, leaves, bugs, and debris floating around? Certainly not me, which meant I needed to spend some time brushing the sides of the pool and vacuuming to keep everything clean. For our first season, we elected to tackle this task manually. Not only was this time consuming, but it was also not very effective. To brush the sides and steps, skim, and vacuum took about 2 hours each time. I was doing this 2x per week to keep everything looking good. Over the course of a 15-week pool season here in Southwest Ohio, I spent approximately 60 hours just keeping the pool clean.

We were interested in the robotic pool vacuums available at our local pool supply store, but we balked at the initial price of them. After spending all this time doing it myself, I began to think that it would pay for itself relatively quickly (depending on how much I valued my own labor 😊). Allocating the cost of the robotic vacuum over the six-year life expectancy, as well as taking into consideration how much time I had spent cleaning the previous year, made this decision much more palatable. We went ahead, bit the bullet, and purchased one for this season. I must say, just two weeks in and my pool is cleaner than it ever was last year. We’ve only run it twice!! It only takes 5 minutes to connect and drop in. I reduced my time spent from 4 hours per week to 10 minutes per week. Consider me a happy consumer.

If you follow the EXAIR Blog, you’ll know that one of our primary focuses is saving customers money by reducing their compressed air operating cost. Recently, I wrote a blog post about a customer that replaced an inefficient solution with some EXAIR Super Air Knives. Let’s take a look and see how quick these knives were able to pay for themselves:

The previous solution consisted of (3) nozzles operated at 50 psig, consuming a total of 51 SCFM. This line was run continuously for (1) 8-hour shift, (5) days per week. The average cost for compressed air is $0.25 per 1,000 SCF (based on $0.08/kWh).

51 SCFM x 60 mins x 8-hours x $0.25/1000 = $6.12 per day

Replacing the inefficient nozzles with (3) Model 110003 Super Air Knives reduced the overall consumption to 17.1 SCFM when operated at 50 psig.

17.1 SCFM x 60 mins x 8-hours x $0.25/1000 = $2.05 per day

This led to a total savings of $4.07 per day, just by swapping out the inefficient product with the EXAIR Super Air Knives. So how quickly will they pay for themselves? Each Model 110003 Super Air Knife carries a list price of $199.00. Since we were using (3) on each line, their total investment per line was $597.00 USD.

$597.00/4.07 = 146.68 (147 days)

KIMG0161
Inefficient blowoff

On the 147th day (less than 30 weeks, based on a 5-day workweek), the Super Air Knives have paid for themselves. Afterward, that $4.07/day/line goes straight to the bottom line. You’ll be hard pressed to find many products that will pay for themselves in less than one year, but at EXAIR we see this day in and day out. Stop throwing your money out the window with inefficient compressed air solutions. Reach out to an EXAIR Application Engineer and see how quickly your blowoffs can start paying YOU.

Tyler Daniel
Application Engineer
E-mail: TylerDaniel@exair.com
Twitter: @EXAIR_TD

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

EXAIR’s Industry Leading Super Air Knife Saves You Money

One common application that we get calls for each and every day centers around maximizing compressed air efficiency. I recently got to work with a customer who was using an inefficient blowoff method and was looking to replace it with an engineered compressed air solution. They had a total of (8) extrusion lines, each with (3) modular-hose style flat nozzles installed. Before a cooling bath they had one nozzle remove some of the heat, then as the extruded material exits the water bath another (2) nozzles blowoff any residual water. They were maxing out their compressor’s peak operating capacity and pressure drops across the system were causing problems elsewhere in other processes.

KIMG0161

They were operating each of the flat nozzles at 50 psi using a total of 17 SCFM per nozzle. We first calculated how much air the current method was using. The extrusion lines were run for one full 8-hr shift per day:

17 SCFM/nozzle x 3 nozzles/line = 51 SCFM per extrusion line

51 SCFM x 60 mins x 8hrs x 5 days x 50 weeks = 6,126,000 SCF

The extrusion lines accommodated product that ranged from 1”-2.5” wide. They wanted one single solution to use across all different products. We settled on (3) of our 110003 3” Super Air Knives. Let’s take a look at the compressed air requirement for (3) 110003 Super Air Knives, also operated at 50 psig.

A Super Air Knife will consume 1.9 SCFM/inch when operated at 50 psig:

1.9 SCFM/inch x 3 inches (per knife) = 5.7 SCFM/knife

5.7 SCFM x (3) total knives = 17.1 SCFM

17.1 SCFM x 60 mins x 8hrs x 5 days x 50 weeks = 2,052,000 SCF

Total savings per extrusion line – 6,126,000 SCF – 2,052,000 SCF = 4,074,000 SCF

4,074,000 SCF x 8 extrusion lines = 32,592,000 SCF

By replacing the (3) inefficient nozzles with EXAIR’s Super Air Knives, a whopping 4,074,000 SCF of compressed air is saved each year. With (8) total lines, this equates to a total of 32,592,000 SCF of compressed air. Most companies will know the cost of their compressed air usage per CFM, but a cost of ($0.25/1000 standard cubic feet) is a good baseline to use.

($.25/1000 SCF) x 32,592,000 SCF = $8,148.00 USD

By replacing (3) inefficient nozzles across all (8) extrusion lines with EXAIR’s industry leading Super Air Knife, they were able to save a total of $8,148.00 per year. In as little as (6) months, the Super Air Knives will have already paid for themselves!!

If you’ve been maxing out your compressed air system, don’t necessarily assume you need to increase your overall capacity. Put in a call to an EXAIR Application Engineer and we can take a closer look at the ways your using your compressed air throughout the facility. By replacing some inefficient methods with an engineered solution, we can help you save air and money!

Tyler Daniel
Application Engineer
E-mail: TylerDaniel@exair.com
Twitter: @EXAIR_TD

Replacing a 1/4″ Open Copper Tube With a 2″ Flat Super Air Nozzle Leads To Quick ROI

The generation of compressed air accounts for approximately 1/3 of all energy costs in an industrial facility and up to 30% of that compressed air is wasted through inefficient operation. Open pipes or homemade blowoffs waste a ton of compressed air, resulting in high operating costs. By replacing these devices with an energy efficient, engineered solution, you can reduce this waste and dramatically cut energy costs.

For example, let’s look at the average operating costs for a single 1/4″ open copper tube. (If you don’t know you current energy costs, a reasonable average to use is $ 0.25 per every 1,000 SCF used, based on $ 0.08/kWh.

1/4″ Copper tube

A single 1/4″ open copper tube consumes 33 SCFM @ 80 PSIG and costs roughly $ 0.50 per hour to operate. (33 SCF x 60 minutes x $ 0.25 / 1,000 = $ 0.50). For an 8 hour shift, the total cost would be $ 4.00 ($ 0.50 x 8 hours = $ 4.00).

If we were to replace the 1/4″ open copper tube with our Model # 1122 2″ Flat Super Air Nozzle with 1/4″ FNPT inlet, the air consumption would be reduced to 21.8 SCFM @ 80 PSIG. This may not seem like much of an air usage reduction, but when you look at the monetary, total cost of ownership for purchasing and operating the nozzle, the savings can quickly add up.

2″ Flat Super Air Nozzle

The operating cost for a 2″ Flat Super Air Nozzle with 1/4″ FNPT inlet is $ 0.33 per hour (21.8 SCF x 60 minutes x $ 0.25 / 1,000 = $ .033) or $ 2.64 per 8 hour shift ($ 0.33 x 8 hours = $ 2.64).

We can now compare the operational cost between the 2 devices:

1/4″ open copper tube operating costs:
$ 0.50 per hour
$ 4.00 per day (8 hours)

2″ Flat Super Air Nozzle operating costs:
$ 0.33 per hour
$ 2.64 per day (8 hours)

Cost Savings:
$ 4.00 / day (open copper tube) –  $ 2.64 / day (2″ Flat Super Air Nozzle) = $ 1.36 savings per day

The Model # 1122 2″ Flat Super Air Nozzle has a list price $ 67.00 USD.

ROI or Return On Investment calculation:
$ 67.00 (Cost) / $ 1.36 (savings per day) = 49.26 days.

The 2″ Flat Super Air Nozzle would pay for itself in just over 49 days in operation. This is the savings for replacing just ONE 1/4″ open copper tube with an engineered solution! In most industrial plants, there could be several of these which presents even more opportunities to reduce the overall operational costs.

Our focus here at EXAIR is to improve the overall efficiency of industrial compressed air operating processes and point of use compressed air operated products. If you are looking to reduce compressed air usage in your facility, contact an application engineer and let us help you optimize your current system.

Justin Nicholl
Application Engineer
justinnicholl@exair.com
@EXAIR_JN

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

Return on Investment: A Calculation to Support Using EXAIR Products

EXAIR Products

Return on Investment, or ROI, is the ratio of profit over total investment.  Many people use it to evaluate stocks, financial markets, capital equipment, etc.  It is a quantitative way in determining the validity of an investment or project.   Recently, there has been a big push by power companies for energy efficiency within the manufacturing sectors.  EXAIR, in partnership with Energy Star, has been manufacturing safe and efficient products since 1983.  An ROI will give a measurable value to communicate more thoroughly with your financial decision-makers.

Equation 1:  ROI = (Total annual savings – Total Project Cost) / Project Cost * 100

In an earlier blog, I wrote about a project with a company in calculating compressed air savings; “EXAIR Super Air Nozzles: 38 Day ROI Saves Money”.  In this blog, I determined the total compressed air savings and the payback period by switching to EXAIR Super Air Nozzles.  The payback period is the amount of time it will take for the project to pay for itself; and for the above manufacturer, it was calculated at 38 days.  To associate this to a Return on Investment, I will use that information from the blog to calculate the ROI.  Equation 1 shows that for any positive ROI value means that the payback period is less than one year.  The larger the ROI value, the quicker the investment that you made will start earning money for your company.

The first part of the equation, Total Annual Savings, is calculated by amount of compressed air savings when using EXAIR Super Air Nozzles in a blow-off application.  When this customer switched from copper tubes, which uses an excessive amount of compressed air, to the model 1110SS Super Air Nozzles, the compressed air consumption dropped by 80%.  Compressed air is considered a fourth utility in manufacturing plants because the amount of electricity to make compressed air is very large.  At a rate of $0.08/KWh, each Super Air Nozzle saved this company $306.00 per year.  As described in the blog, the facility used four nozzles per machine, and they had 25 machines in their facility.  The total annual savings is calculated as follows:

Equation 2: Total Annual Savings = $306 * 4 * 25 = $30,600 per year.

The second part of the equation, Total Project Cost, is the cost of the nozzles plus the labor to install them onto the machines.  The model 1110SS Super Air Nozzle has a price of $46.00 each.  These engineered nozzles are designed to use less compressed air by entraining the “free” ambient air, making them very efficient for blow-off applications.  The amount of time required to install four nozzles to each machine was 1 hour.  This time included tapping, fixturing, and testing each setup.  The labor rate that I will use in this example is $75.00 per hour (you can modify this to your current labor rate).  The labor cost to install four nozzles is $75.00 per machine.   The Total Project Cost can be calculated as follows:

Equation 3: Total Project Cost = ($46 * 100 nozzles) + ($75 * 25 machines) = $6,475

With the Total Annual Cost and the Project Cost known, we can insert these values into Equation 1 to calculate the ROI:

ROI = (Total annual savings – Total Project Cost) / Project Cost * 100

ROI = ($30,600 – $6,475)/$6,475 * 100

ROI = 373%

When a decision maker sees this large of a value for a Return on Investment, it makes it very easy to proceed with an energy-saving project to install EXAIR Super Air Nozzles on their machines.

Besides cost savings, there are some additional things that EXAIR products can provide.  It may be difficult to put a value on the savings, but these products can improve your process and save your company money.  First, they can reduce repair or replacement costs on maintenance items for the air compressors.  If you use less compressed air, then the running hours of the compressor is reduced.  Second, some things that can be easily overlooked is safety.  The Intelligent Compressed Air® products have a much lower sound level where expensive PPEs may not be required.  Another safety feature is dead-end pressure in which the operator could risk health in using open pipe or substandard nozzles.  Some other enhancements in using EXAIR products are improved system reliability, increased productivity, and reduced unscheduled downtimes (typically seen with broken plastic nozzles).  These added benefits plus the short ROI can validate a energy-savings project in your facility.

Power companies see the great value in using efficient engineered products in compressed air systems as they currently offer rebates.  If you need help to see if your local power company does offer rebates, EXAIR can research the programs for you.  The rebates will reduce the cost of each nozzle as well as cut the overall project cost.  EXAIR also offers an Efficiency Lab.  We will compare your current blowing device with an EXAIR product to find any compressed air savings.  It is simple to do.  Just fill out the form, Efficiency Lab, and ship your product to us.  We will test each product with calibrated equipment and report the results.  The comprehensive report will include compressed air savings which can be used for the ROI calculations above.  For the company above, they were able to save $30,600 a year with a ROI at 373%.  If you would like to team up with EXAIR to establish annual savings, project improvements, and rebates, you can contact an Application Engineer to get started.  We will be happy to work with you.

John Ball
Application Engineer
Email: johnball@exair.com
Twitter: @EXAIR_jb

Super Air Knife Saves Money Compared to Drilled Pipe

A few months ago, my counterpart Brian Bergmann wrote a blog providing a detailed explanation of ROI or Return on Investment. Today, I would like to take this information and apply it to a common situation we deal with regularly here at EXAIR – replacing drilled pipe with our Super Air Knife.

Drilled pipe – easy to make but extremely wasteful

Sections of pipe with drilled holes across the length are very common as they are made of relatively inexpensive materials and simple to make.  Where the cost begins to add up is on the operation side as these types of homemade blowoffs waste a ton of compressed air, making them expensive to operate.

For comparison, lets look at a 12″ section of pipe with (23) 1/16″ diameter drilled holes. According to the chart below, each hole will flow 3.8 SCFM @ 80 PSIG for a total of 87.4 SCFM.

With an average cost of $ 0.25 per every 1,000 SCF used (based on $ 0.08/kWh), it would cost $ 1.31 to operate this blowoff for 1 hour. (87.4 SCFM x 60 minutes x $ 0.25 / 1,000)

Super Air Knife – Available from 3″ up to 108″ in aluminum, 303ss and 316ss

Now let’s take a look at replacing the drilled pipe with our 12″ Super Air Knife. A 12″ Super Air Knife will consume 34.8 SCFM (2.9 SCFM per inch) when operated at 80 PSIG. Using the same figure of $ 0.25 per every 1,000 SCF used, it would cost $ 0.52 / hr. to operate this knife. (34.8 SCFM x 60 minutes x $ 0.25 / 1,000)

Now that we know the operating costs, we can make a better comparison between the 2 products.

Drilled pipe operating costs:
$ 1.31 per hour
$ 10.48 per day (8 hours)

12″ Super Air Knife costs:
$ 0.52 per hour
$ 4.16 per day (8 hours)

Cost Savings:
$ 10.48 per day (drilled pipe) –  $ 4.16 per day (Super Air Knife) = $ 6.32 savings per day

A 12″ aluminum Super Air Knife carries a LIST price of $ 297.00. If we take $ 297.00 divided by $ 6.32 (saving per day), we get a ROI of only 47 days.

As you can see, it is quite beneficial to consider ALL of the parameters when looking at a process or application, rather than just the “upfront” details. What seems like a simple and easy fix, can actually be quite  wasteful when it comes to the true cost of ownership.

If you are using similar devices in your plant and would like to see how an EXAIR Intelligent Compressed Air Product can help make the process operate more efficiently, contact an application engineer for assistance.

Justin Nicholl
Application Engineer
justinnicholl@exair.com
@EXAIR_JN

 

EXAIR Super Air Nozzles: 38 Day ROI Saves Money

Blow off station

I received an email from an engineer that was looking at our Super Air Nozzles.  They currently were using four blow-off lines that were made from 6mm ID copper tubes.  (Reference picture)  The system was designed to blow out holes after machining.  The engineer was in charge of the task of optimizing 25 machining stations similar to this one.  He was familiar with EXAIR products from his previous employment, and he recognized the waste of compressed air by using open pipe.  He purchased four Nano Super Air Nozzle, model 1110SS, for a trial.  He was impressed with the performance, the low sound level, and the engineered design in safety.  But, for upper management in his company, he had to show a cost savings in order to change all the stations in the facility.  He asked me to help him in calculating the compressed air savings.

He gave me some additional details about their application.  He was using the compressed air about 30% of the time throughout an 8 hour day at a pressure of 80 PISG.  He wanted to present the savings per day, week, and year as well as the payback period in his evaluation.  I have performed many of these calculations for other customers and was happy to help.  It is sometimes easier to speak in terms of savings, as everyone can relate to money, especially management.  (The numbers below can be adjusted to match your application and blow-off devices).

Knowns:

Cost of compressed air: $0.25/1000 cubic feet of air (this is based on $0.08/Kwh of electrical cost)

Flow: 1110SS Nano Super Air Nozzle – 8.3 SCFM at 80 PSIG

Flow:  6mm ID copper tube – 42 SCFM at 80 PSIG

 

The difference in compressed air flows from a 6mm tube to the Nano Super Air Nozzle is (42 SCFM – 8.3 SCFM) = 33.7 SCFM.  At a 30% duty cycle, we get 33.7 SCFM * 0.3 = 10.2 SCFM (cubic feet/minute) of additional compressed air being used.

Per day, the additional amount of compressed air wasted is:

10.2 cubic feet/minute * 60 min/hr * 8 hr/day (one shift) = 4,896 cubic feet per day.

Per week, the additional amount of compressed air wasted is:

4,896 cubic feet/day * 5 days/week = 24,480 cubic feet per week.

Per year, the additional amount of compressed air wasted is:

4,896 cubic feet/day * 250 days/year = 1,224,000 cubic feet per year.

 

With the cost to make compressed air at $0.25/1000 cubic feet, we have the following:

4,896 cubic feet/day * $0.25/1000 cubic feet = $1.22 per day

24,480 cubic feet/week * $0.25/1000 cubic feet = $6.12 per week

1,224,000 cubic feet/year * $0.25/1000 cubic feet = $306.00 per year.

From these values, the payback for a model 1110SS Super Air Nozzle is just under 38 days.  Because the EXAIR Super Air Nozzles are so efficient, some utility companies will offer a rebate program to use them.  This will improve your ROI even more.  (We can check to see if your local electric company participates in these programs).  Just think, the remaining life of the Super Air Nozzle will be using less compressed air and saving much money for the company.

The calculations above are only for one nozzle.  As discussed above with the engineer, they had 4 tubes/station and 25 stations in their plant.  So, if you multiply each figure by 100, you can see the large amount of money that can be saved.   The engineer presented these figures to upper management, and it was an easy decision to replace all the copper tubes with EXAIR nozzles.

Nano Super Air Nozzle

Don’t be fooled by the initial cost of a tube, pipe, drilled holes, or a substandard nozzle.  You can see by the facts above, if you use any additional compressed air in your blow-off application, it will cost you a lot of money in the long run.  If you need any help in calculating how much money EXAIR products can save you, you can use our Air Savings Calculator from our website, or you contact an Application Engineer at EXAIR.  We will be happy to help you.

John Ball
Application Engineer
Email: johnball@exair.com
Twitter: @EXAIR_jb