How Fast Can I Get My Return On Investment

Whenever an EXAIR product is sold to another business there is ultimately a question from a customer whether they know it or not. That question is very often, how fast will this product pay itself back in production gains, air savings, or decrease in downtime. One of the ways we offer this information is through our calculators.

The easiest method to determine how fast an EXAIR Engineered Solution will pay itself back is by knowing a few variables and then plugging them into our simplified Air Savings Calculator on the EXAIR site.

The Variables:
1. Current Customer Consumption (SCFM) or (SLPM) – We need this to have the baseline, it isn’t always easy to know off the top of your head so we offer items like the Digital Flowmeter or even the ability to send the product to us through the Efficiency Lab for a free diagnosis of consumption.

2. $ Cost of EXAIR Product – This is easy, you can even add in other known project costs to this that you want factored in for the return on investment. The more you add, the less it becomes a simplified ROI. Basic cost of the EXAIR product that is being installed is the best to keep it simplified.

3. EXAIR Product Consumption (SCFM) or (SLPM) – This can easily be obtained from our website or our Brain Trust, I mean Application Engineers who are always eager to talk about air consumption and other technical details. To really determine this we just need to know the operating air pressure and the model number.

4. $ Cost of compressed air/1,000 Cubic Feet – This is a value that may be known by the on-site utilities team, if not a good industry standard for the Midwest is $.25 USD. This has come assumptions on your kWh cost of energy and compressor efficiency. Again, if you want to dive deep into this, reach out to our Application Engineers, we are here for a reason.

That’s it, with those values input you can get a break down on how much air, and money you are saving and a simple payback in days of operation.

If you have questions on the math behind this, or how to determine/factor in some more information, contact one of the team members here and we will walk you through the best options to decrease your payback time and increase your efficiency.

Brian Farno
Application Engineer
BrianFarno@EXAIR.com
@EXAIR_BF


ROI: Super Air Knife vs. Drilled Pipe

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

Want to Know How Much Money you can Save? Use EXAIR’s Efficiency Lab

Growing up as a kid of the 80’s I remember wanting a Nintendo 64. This was very much a want due to the excellent advertising and having friends that got them when they first came out. So, like many kids of the times, I set forth to present my case to my parents and sell them on the benefits to me receiving this 64 bit wonder of the world. These benefits all revolved around me doing chores and “helping” to earn money to go towards the end goal. Thinking back now, I really should have started to learn more about negotiating earlier in life because my parents and older brother really made out on the deal. The point is, I had to make sure that they saw a return on their investment. Mainly, I would be entertained and they would get some stuff done around the house without complaints.

1 – NUTS For Nintendo special on ABC news 20/20 from 1988

Well, flash forward to today and I still feel as though it is always an easy justification if I have supporting evidence of the benefits and even better, if there is some form of cost savings that will be had by spending money on a project or a tool. Often times the justification is the amount of time spent on a task. Well, here at EXAIR we completely embrace that justification culture and, in many cases, can provide you the information necessary to present to management or budget committee – the simple ROI your company will see when investing in EXAIR products. The best part is, this study is always free.

The way it works is pretty simple, we want to compare your current solution to our engineered products. EXAIR has a simple form that gets filled out (or you can call, e-mail or chat) explaining your application to us. We ask for a few key pieces of detailed information, and for you to send one of your current solutions (the nozzle, homemade device, or open tube for example). Then we run side by side tests in house to determine air consumption, noise, and force at the same pressure you are using at your facility. That’s right, this testing is all done here at EXAIR through our EXAIR Efficiency Lab. We document these performance characteristics and send a report showing a simple return on investment for you if you replace your device with an EXAIR engineered solution.

EXAIR’s Free Efficiency Lab

This information is then easily backed up by our 30 day guarantee on stock products. Get the EXAIR solution in, test it in your facility and see how the savings stack up. If there is anything that doesn’t stack up, you simply let us know and send the units back.

The entire Efficiency Lab and 30 day guarantee are offered to all of our customers that are within the US and Canada. If you would like to discuss what is possible for you and your team, please reach out to an Application Engineer.

Brian Farno
Application Engineer
BrianFarno@EXAIR.com
@EXAIR_BF

1 – Hertz, Steve – NUTS FOR NINTENDO special on ABC news 20/20 from 1988, 6/24/2010 – Retrieved from https://www.youtube.com/watch?v=yt4KG9ib8S4

How to Save Money on Compressed Air

Compressed air can be one of the more expensive utilities to use in a facility, but a compressed air system is full of simple opportunities to increase efficiency and minimize the cost. Much like how you can take multiple steps to save electricity at your house there a few simple steps you can take to save your compressed air. These steps include finding and repairing leaks, compressor maintenance, minimizing pressure at the point of use, and turning the compressed air off when not in use. Implementing these steps and using the right tools to achieve them can lead to significant dollar savings – in fact our website case studies, other blog articles and catalog are filled with example after example of air (and dollar) savings success! And let’s be honest here, who doesn’t like saving money.

First off is finding your leaks. Leaks are one of the major wastes of compressed air in a system that could happen. Leaks in a compressed air system can account for wasting 20-30% of a compressors output. These leaks can commonly be found in pipe joints, devices that use the compressed air, quick connect fittings, and storage tanks. All of this compounds to wasting air much like a leaky faucet wastes water – little by little it grows until it simply needs to be addressed. One of the ways to help find leaks in your system is EXAIR’s affordable Ultrasonic Leak Detector. This leak detector uses ultrasonic waves to detect where costly leaks can be found so that they can be patched or fixed.

EXAIR Ultrasonic Leak Detector

Choose efficient end-use products. Engineered air knives, air amplifiers, air nozzles and safety air guns can dramatically outperform (use less air) than commercial air nozzles and in-house solutions such as drilled pipes, open air lines and other creative “fixes”. We have seen some very nice in-house solutions from customers who have put in some significant time and effort, but they all have one thing in common – they use more air than any of EXAIR’s engineered solutions.

Minimizing your pressure can also save you money by limiting the amount of compressed air that is being used. Pressure and volume go hand and hand, the higher the pressure the higher the volume of air and vice versa. By minimizing the pressure that you are using you are also minimizing the amount of air that is being used which means savings. Each CFM used can be associated with a certain price value so the less you use the more you save. You also cut down on the amount of work the compressor has to do and how often the compressor has to cycle. Pressure can be minimized using one of EXAIR’s Pressure Regulators to cut down on the amount of air being used.

EXAIR’s Pressure Regulators come in 4 different sizes

Turn off the compressed air when it is not in use. Just like how you wouldn’t leave the faucet running or lights on in a room that is not being used, don’t leave your compressed air running (insert bad dad joke). Constantly using compressed air even when not in use will cause the compressor to cycle more often wasting money. Each CFM has a price to it so don’t waste CFM’s blowing it back into the air and doing nothing. This can simply be done by adding one of EXAIR’s ball valve or solenoid valves to turn off when you are done using it. Also, if you want to take it another step farther you can look at using one of EXAIR’s Electronic Flow Controllers (EFC). The EFC uses a photo eye attached to a timer that will open a solenoid valve for a set amount of time when it detects an object within 3’ of the photo eye. This will turn the air on only when your product is in the air path and turn it off during any spaces in between.

EXAIR’s EFC in use

Compressor maintenance is another important step to minimizing the cost of compressed air. Neglected air compressors can cause a lot of issues ranging from expensive repairs to a decreases in efficiency. Wear and tear placed on the motor of an air compressor can cause the compressor to produce less compressed air (SCFM) at the same power consumption. This means you are paying the same amount of money and getting less out of it. Making sure that your compressor or any machine is always running at its optimal performance and should always be a priority for any facility.

There are many different ways to save on compressed air, these are just a few of them. Reducing air use will save money and reduce the demand on your compressor which in turn can prolong the life of your air compressor. If you have questions about how to save on compressed air or any of our engineered Intelligent Compressed Air® Products, feel free to contact EXAIR or any Application Engineer.

Cody Biehle
Application Engineer
EXAIR Corporation
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