Tag: ROI Calculation

ROI: Super Air Knife vs. Drilled Pipe

Published on by johnball2014Leave a comment
Super Air Knife Drilled Pipe

Return on Investment, or ROI, is the ratio of profit over total investment.  Many people use it to check investment stocks, financial markets, capital equipment, etc.  It is a quantitative way in determining the validity for an investment or project.   You can use this ROI value to give a measurable rate in looking at your investment, no matter how big or small.  In this blog, I will compare the ROI between an EXAIR Super Air Knife to a home-made drilled pipe.  Let’s start by looking at Equation 1 to calculate the Return on Investment.  For a positive ROI value, the project will pay for itself in less than one year.  Any negative values would represent a high-risk investment. 

Equation 1:  ROI = (Total Annual Savings – Total Project Cost) / Total Project Cost * 100

The Total Project Cost is the cost of the product with the labor to install.  In our example, we will use a 36” (914mm) blow-off device to cover the width of a conveyor.  One device will be an inexpensive drilled pipe and the other will be a high-efficiency EXAIR Super Air Knife.  The drilled pipe had (72) 1/16” (1.6mm) diameter holes spaced ½” (13mm) apart.  EXAIR manufactures the model 110036 36” Aluminum Super Air Knife with a .002” (.05mm) shim along the entire length.  The model 110036 has a retail price of $802.00 each.  The cost of the home-made drilled pipe was around $70.00 for material and labor.  What a difference in price!  It seems like the ROI should be in the negative, but is it?

Let’s continue on with the Return on Investment.  The amount of time required to install the Super Air Knife across the conveyor only took a maintenance staff about one hour to mount.  The labor rate that I will use in this example is $80.00 per hour (you can change this to your current labor rate).  The labor cost to install the knife is $80.00.   The Total Project Cost can be calculated as follows: $802 + $80.00 = $882.00.  The next part of the equation, Total Annual Savings, is a bit more in-depth, but the calculation is below.

To calculate the Total Annual Savings, the amount of compressed air used by the drilled pipe is around 261 SCFM (7,389 SLPM) at 60 PSIG (4.1 Bar).  The model 110036 Super Air Knife has an air consumption of 82.8 SCFM (2,344 SLPM) at 60 PSIG (4.1 Bar).  With an electrical rate of $0.08 per Kilowatt-hour, the electrical cost is near $0.25 per 1000 standard cubic feet or compressed air, or $0.25/1000SCF.  To calculate an annual savings, let’s use a blow-off operation of 8 hours/day for 250 days a year.   Replacing the drilled pipe with the model 110036 Super Air Knife, it will save you (261 SCFM – 82.8 SCFM) = 178.2 SCFM of compressed air.  To put this into a monetary value, the annual savings will be 178.2 SCFM *$0.25/1000SCF * 60 Min/hr * 8hr/day * 250 day/yr = $5,346.00 per year.

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 = ($5,346.00 – $882.00) / $882.00 * 100

ROI = 506%

With a percentage value that high, we are looking at a payback period of only 40 days.  You may look at the initial cost and be discouraged; but in a little over a month, the model 110036 will have paid for itself.  And after using it for one year, it will save your company $5,346.00. 

In my experience, a loud blowing noise from your equipment is generally coming from an inefficient and safety-concerned product.  With these “cheap” ways to blow compressed air, it will cost your company a lot of money to use as shown in the example above.  EXAIR has an Air Savings Calculator on our website to calculate the savings by replacing your inefficient blow-off devices. And, if you would like to team up with EXAIR to find ways to increase savings, improve productivity, and promote safety, you can contact an Application Engineer.  We can help you get started by defining your Return on Investment with EXAIR products.

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

How to Calculate ROI (Return on Investment)

Published on by Jordan T ShouseLeave a comment

You may have asked…why should I switch over to an engineered compressed air product if my system already works? Or…How can your products 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.

ROI Calculation

How is ROI calculated? It is very simple to calculate out the potential savings of using an EXAIR Intelligent Compressed Air® Product. We have easy to use calculators on our websites Resources where filling in a few blanks will result in an ROI when switching to a EXAIR product! Here they Are, Calculators.

I’ll go ahead and break down the simple ROI calculations for replacing open blow offs 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 save. If not, you can use $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.

Jordan Shouse
Application Engineer

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Hand Holding money Image from Pictures of Money Creative Commons license

EXAIR Super Air Knife Promotion

Engineered Compressed Air Products = Less Noise & Money Saved

Published on by codybiehleLeave a comment

Everyone dislikes loud noises for the most part. Here in Ohio we just got done surviving the constant buzz and swarming of cicadas. We all deal with noise on a daily basis, some of it enjoyable and some of it not so much. Noise is an inescapable fact of life and all we can do is try to reduce noise level to save our sanity. But, did you know that cutting down on the noise produced by compressed air blow offs can actually save you money? Your loud homemade blow off system is not only way too loud, but it is most likely also costing you more money than you need to spend.

EXAIR’s engineered compressed air products are designed to operate quietly and efficiently. The reduction in noise they produce is only one of the benefits – another is the reduction in money by reducing compressed air use.

EXAIR Super Air Knife Promotion
EXAIR’s SUPER AIR KNIFE

But how does one calculate out the ROI? 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 typical ROI preformed and replaced with a corresponding EXAIR Super Air Nozzle:

  • ¼” drilled pipe with (3) 3/32” Holes which uses 9.4 SCFM per hole at 80 psig (denoted as DP)
  • A Model 110003 3” Super Air Knife can be used to replace and only uses 8.7 SCFM at 80 psig (denoted below as SAK)

Calculation:

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

(28.2) * (60) * (8) * (5) * (52) = 3,519,360 SCF

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

 (8.7) * (60) * (8) * (5) * (52) = 1,085,760 SCF

Air Savings:

SCF used per year for DP – SCF used per year for SAK = SCF Savings

               3,519,360 SCF – 1,085,760 SCF = 2,433,600 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

                                (2,433,600 SCF) * ($0.25 */ 1000 SCF) = $608.40 annual Savings

With the simple investment of $216 (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

                                ($608.40/year) / (5 days/week * 52 weeks/year) = $2.34 per day

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

                                ($216) / ($2.34/day) = 92.3 days 

As you can see it doesn’t take long for the air knife to pay for itself. You also get better overall performance as the Super Air Knife will provide a solid curtain of air. In the end you get to breathe a sigh of relief as no more jump scares and a loud hiss when you turn your air on. Who doesn’t like to save a little money and sanity, especially in these crazy times?

If you have any questions or want more information on EXAIR’s Air Knifes or like 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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Customer Saves Nearly $7000 by Installing Super Air Knives on Converting Machine

Published on by Tyler DanielLeave a comment

EXAIR proves often that we’re able to work with you to create a customized solution that best serves your application. Recently I had the pleasure of working with a customer who wanted a better solution on their tissue paper converting machine. What they currently had was too loud, too inefficient, and they knew there was a better way.

The machine was an old rewinder used to convert webs of tissue paper ranging from 99-115” in width. Installed on the old machine was a 115” drilled pipe with 1/16” drilled holes spaced out every ½” along the length of the pipe. This was using a substantial amount of compressed air and was significantly louder than they would’ve liked. They purchased a new machine that had an EXAIR Super Air Knife already installed and working great, so they reached out to us for some help.

The customer conducted some time studies to determine exactly how much air this application required. The air blast ran for 500 seconds per hour, equating to 8.3min/hr of air usage. The operation runs 24/7, but with time spent doing changeovers the actual run time is closer to 20hrs.

20hrs x 8.2min = 166 min/day of air usage

166min x 365 = 60,590 min per year

A 1/16” unpolished, drilled hole will consume 2.58 SCFM at a pressure of 60 PSIG. With a total of 228 holes across the full pipe, this is quite a bit of compressed air.

2.58 SCFM x 228 = 588 SCFM of compressed air

588 x 60,590 min = 35,626,920 SCF

Considering the lightweight nature of the material, we recommended that the customer use our .001” shim to cut the flow from our stock Super Air Knives to their minimum. We recommended our Model 110054-.001 and Model 110060-.001. At 60 PSIG, a Super Air Knife with .001 shim installed will consume 1.15 SCFM/inch of knife length.

114 x 1.15 SCFM = 131 SCFM of compressed air

131 x 60,590 min = 7,937,290 SCF

Installing the Super Air Knives with .001” shim reduced their air consumption by 77% for a total air savings of 27,689,630 SCF each year. But, what does this mean in terms of money? To determine the cost of compressed air, we use the approximate value of $0.25/1000 SCF.

27,689,630 SCF x $0.25/1000 = $6,922.41

In just one year, on this one single machine, this customer was able to save almost $7k per year. These knives quickly pay for themselves, then begin to contribute to your bottom line. All of this in addition to lowering the sound level and providing a safer working environment for their operators.

If you have areas in your facility that are using air inefficiently, contact an EXAIR Application Engineer today.

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