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

Cost Savings from Replacing a Drilled Pipe with a Super Air Knife

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

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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Twitter: @EXAIR_BB

Energy Rebates and EXAIR Products

In case it goes unnoticed, EXAIR focuses on engineered compressed air point of use products to ensure that our customers are utilizing their costly utility as efficiently as possible.  The main benefits to purchasing EXAIR products are the support you receive from us at EXAIR, the quality of the product, the savings in compressed air, and the increase in safety.  Another added benefit is a large number of utility companies are offering rebates on the purchase of engineered nozzles, just like the Super Air Nozzles that EXAIR offers.

Many energy providers offer these energy rebates for commercial or industrial users.  Here in the Cincinnati area, Duke Energy offers rebates on items such as lighting, air compressors, engineered air nozzles, heaters / dryers for extrusion machines, energy management systems, variable frequency drives, data center equipment, even food service equipment, custom incentives, and many other items.

Duke Energy Rebate
Example of our local energy rebate offering for Engineered Nozzles

For each engineered compressed air nozzle that is installed, in order to meet the rebate requirements they must flow less than or equal to given flow rates in SCFM at 80 psig inlet pressure. The pipe sizes, flow rates, and EXAIR equivalents are shown below.

EXAIR Engineered Air Nozzle Part Number EXAIR Flow Rate @ 80 psig
#1102/#1103 – 1/8 NPT 10 SCFM
#1100/#1101 – 1/4 NPT 14 SCFM
#1108SS-NPT/#1109SS-NPT/#1110SS-NPT
All are 1/8 NPT
2.5, 4.9, 8.3 SCFM
respectively
#1003 – 3/8 NPT 18 SCFM

By just replacing the nozzles the customer saved 2.7 SCFM per nozzle.If we take an example such as the EXAIR Case Study  shown below for 1/4″ copper tube that was being used as an open ended blow off.  The copper tubes were consuming 19.6 SCFM at 100 psig inlet pressure, there were 10 machines with one line per machine operating 40 hours, 52 weeks per year.   The customer retrofitted the open pipes with a model 1100 Super air nozzle and was able to reduce the air consumption by 2.7 SCFM per nozzle.  If they were to purchase these nozzles this year, current list price for a model 1100 Super Air Nozzle is $36.00 USD, then apply for the energy rebate offered by Duke Energy and receive $20.00 per nozzle replaced.  The total savings and return on investment is shown below.

Case Study 1561
EXAIR Model 1100 Super Air Nozzle Replaces Open Copper Pipe Blow Off

10 nozzles x 2.7 SCFM = 27 SCFM  x 60 minutes per hour x 8 hours per day x 5 days per week x 52 weeks per year = 3,369,600 SCF of compressed air saved per year.

3,369,600 / 1,000 SCF x $.25 = $842.40 USD savings in compressed air per year.

Cost Savings per week = $16.20 USD

Total purchase cost is  $36.00 x 10 nozzles = $360.00 USD

Energy Rebate = @20.00 per nozzle x 10 nozzles  = $200.00 USD in rebates.

$360.00 USD purchase price – $200.00 USD energy rebate = $160.00 USD final purchase cost.

Return on investment at a savings of  $16.20 USD per week is

$160.00 / $16.20 = Less than 10 weeks pay back!

By applying for the energy rebate this customer could reduce the ROI of this air savings project from just over 22 weeks (which is still very good) to less than 10 weeks.

If you would like to learn more about whether there are Industrial energy rebates available in your area, contact an Application Engineer and let us know where you are located and who your energy provider is.

We will help you determine the correct engineered solution to save your compressed air as well as help you to apply for eligible energy rebates in your area.

Brian Farno
Application Engineer Manager
BrianFarno@EXAIR.com
@EXAIR_BF

 

I Love It When They Show The Math

In every math or science class I ever took – from high school Algebra I, to CHEM101 in college, or a variety of classified material courses in Naval Nuclear Power School – it was always good form to show your work. And by “good form” I mean “necessary to avoid an F.” I’ve found, through helping my teenage sons with their homework (whether they want me to or not, but that’s another story,) the same rules apply today. And rightly so.

My oldest is slightly (at least) more interested in athletics than academics. Sunday night, as I was going to bed, I saw him in the living room. His face was not obstructed by his cell phone and he didn’t have his headphones on, so I saw a rare opportunity for a real-time conversation. He was watching game 7 of the NBA Championship, and it was near enough to the end of the game that I figured I could watch it with him and not sacrifice too much desperately needed sleep.

If you watched the series, you saw some phenomenal play by both the Cleveland Cavaliers and the Golden State Warriors. If you saw the end of game 7, you saw “the block” – Cleveland’s LeBron James came out of NOWHERE to rob Andre Iguodala of a quick two points on a breakaway lay-up. During the obligatory replays, I kept thinking that what James had done might border on the physically impossible. Then, ESPN’s “Sport Science” reel put into perspective just how close to that border he came:

Now, we don’t have anyone who can chase down a professional athlete and jump 12 feet in the air to take a basketball away from him, but we DO have a staff of engineers who can test air blow off products and “do the math” on how much better a fit to your application an EXAIR Intelligent Compressed Air Product would be. Our Efficiency Lab service is free and tests your current product to provide you a report comparing air savings, noise reduction, force values and a simple return on investment.

In our defense, I believe we are MUCH better at this than LeBron James or Steph Curry would be.
In our defense, I believe we are MUCH better at this than LeBron James or Steph Curry would be.

Do you want to find out how much quieter and efficient an EXAIR Intelligent Compressed Air Product might be than what you’re using now?  Give me a call…you can try one of our products in your facility, or we’ll test one of yours in ours.

Russ Bowman
Application Engineer
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How Much Money Will You Save with Engineered Air Nozzles

The simplicity of installing an air nozzle and the importance of saving compressed air (which in turn saves money) go hand-in-hand with our engineered air nozzle product line. For an 8 hour shift running 250 days per year, replacing one 1/4″ open air tube can save $650 dollars per year. Replacing any run-of-the-mill, commercial air nozzle can typically save $330 dollars per year!

How many open tubes or commercial air nozzles do you have?
10 tube replacements = $6500 saved per year
25 tube replacements = $16,250 saved per year
50 tube replacements = $32,500 saved per year                          

10 commercial nozzle replacements = $3300 saved per year
25 commercial nozzle replacements = $8250 saved per year
50 commercial nozzle replacements = $$16,500 saved per year

If you want to know EXACTLY how much replacing your current compressed air blow off devices with EXAIR engineered air nozzles will save you, take advantage of our free Efficiency Lab. We will test your current device for flow, force and noise levels with our calibrated equipment. You will receive a report with all the details, including and ROI – which is generally within weeks!Capture2

 

To see our complete line of nozzles, get our Blowoff Guide sent to your desk. EXAIR offers Air Nozzles ranging in thread size from our smallest Atto Super Air Nozzle with an M4 thread providing 2.0 ounces of force to our largest 1-1/4″ NPT Super Air Nozzle providing 23 lbs. of force. In addition to the various thread size and force levels, select nozzles are also offered in brass, stainless steel, zinc aluminum alloy and even PEEK plastic for superior chemical resistance or applications needing a non-marring nozzle (a maintenance crew for a large telescope used the PEEK nozzles to blow off their large mirrors). Offering such a wide variety to choose from, selection can seem like a daunting task. Luckily we have you covered with our FREE Blowoff Guide to help make the best product selection for your needs. The Blowoff Guide features performance specs as well as dimensional information and airflow patterns. Some things to consider when making a choice would be matching existing pipe size, material compatibility, noise level in the area, compressed air requirement and/or force required for successful blowoff.

Blowoff guide
To order your FREE Blowoff Guide, please click here.

We also offer a few handy accessories for our Air Nozzles as well. For example our Flexible Stay Set Hose are available with 1/4 MNPT X 1/4 MNPT fittings or 1/4 MNPT x 1/8 FNPT connections and lengths from 6″ up to 36″. The Stay Set Hose can be bent to deliver the air to the critical area while holding position until it is manually repositioned.

stay sets
Flexible and durable, EXAIR Stay Set Hoses come in lengths from 6″ to 36″.

Additionally we offer our Swivel Fittings allowing for 25 degrees of movement to provide the best angle for air delivery to the part. These useful tools are available in 316ss or 303ss from M4 thread up to our largest 1″ NPT size.

Swivel Fittings
Swivel Fittings make it easy to adjust the aim of your Air Nozzle.

For help selecting the right engineered Air Nozzle and accessory to fit your specific application, please contact EXAIR for assistance.

Justin Nicholl
Application Engineer
justinnicholl@exair.com
@EXAIR_JN