Tag: ROI math

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

The Impressive ROI of an Engineered Air Nozzle

Published on by codybiehleLeave a comment

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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Process Improvement, ROI and Safety from One Air Nozzle

Published on by Russ BowmanLeave a comment

Process improvement projects can be detailed, complex, expensive, and take a long time to prove their worth.  Today, I want to tell you about one that WAS NOT ANYTHING like that.

A metal stamping company used compressed air to blow their products from their dies.  They did what many do – they ran some copper tubing, and aimed it at the platen so it would properly eject the parts as they were stamped.  They KNEW it was loud, and they suspected it was inefficient as well.

After discussing the setup and seeing a picture of it (the one on the left, below,) I recommended installing a few engineered Super Air Nozzles to lower the noise levels considerably.  Boy, was I wrong.  About “a few” nozzles, that is…turns out, they only needed one Model 1122-9212 2″ Flat Super Air Nozzle with 12″ Stay Set Hose.  The copper tubes come from a manifold that already had 1/4 NPT ports – installation took a matter of minutes.  Nothing detailed, complex, or expensive about it:

This loud & inefficient copper tubing blowoff was just a compression fitting (and a Model 1122 2″ Flat Super Air Nozzle) away from being quiet and efficient.

It didn’t take much longer than that to prove its worth either: as soon as they noticed how much the noise level went down on THIS press, they ordered them for the other eighteen presses in their facility as well.

The 1/4″ copper tubes blew continuously from a pressure regulator set @60psig…the three of them theoretically consumed a total of ~80 SCFM.  The Model 1122, at 60psig supply, consumes only 17.2 SCFM.  Simple return on investment was as follows:

  • 80 SCFM was costing them $48.00 a week
    • 80 SCFM X 60 min/hr X 8 hr/day X 5 days/week X $0.25/1,000 CFM = $48.00
  • 17.2 SCFM, using the same formula, only costs $10.32 a week (I’ll let you do the math; it’s good practice.)
  • They saved $37.68 a week.  The Model 1122-9212 costs $116.00 (2020 pricing) – that means that each of them paid for themselves in just a hair over three weeks.
  • $37.68 x 50 work weeks per year = $1884.00 saved annually per nozzle
  • $1884 x 18 (the number of presses) = $33,912 saved annually 

Considering they also didn’t have to listen to those very loud open ended copper tube blowoffs, I think you’ll have to agree it made for a very good investment.  They did. The new nozzle runs at 77 decibels, a comfortable level and well below the OSHA standard [29 CFR – 1910.95(a)] for allowable noise exposure.

If you’d like to find out how EXAIR Intelligent Compressed Air Products can save you money on compressed air – and save everyone’s hearing – give me a call.

Russ Bowman
Application Engineer
EXAIR Corporation
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