The life cycle of any significant capital purchase usually follows the same financial trajectory – initial outlay is expensive (or deemed so, anyway), followed by paying down any interest and then principle, before the profitability takes over and you begin realizing the return on your investment.
Of course, there are a number of additional factors to consider as well – operating costs over a specific period, regular service and maintenance, employee safety and training, and equipment depreciation. No savvy employer makes significant expenditures without considering these factors when making a purchase that serves as an investment in their future.
This analysis, the life cycle cost (or LCC), is a systematic way of examining the operating cost of a product (or a service, such as a relationship with a vendor or subcontractor). There’s usually a balance – a hybrid car may cost more than a similar internal combustion vehicle of similar stature and weight, yet it costs less to operate on a weekly and monthly basis. It also may yield additional savings due to tax incentives. LCC is a valuable tool when considering capital investments, and compressed air systems are no exception.
Upgrading compressor equipment can seem like a daunting task, but technological advances help realize equipment efficiencies more and more. Making LCC calculation demands knowledge and experience with comparable and competing systems, as well as a detailed benchmark that shows what a current system provides, from both production and cost standpoints. In addition to efficiencies that technology helps realize, incentives provided by utility companies can often compound those savings – when your energy consumption decreases, particularly for large industrial manufacturers, a utility company will often provide an incentive, as their demand has also decreased.
Electrical energy is the most significant cost of industrial compressed air production. Yet, with energy recovery, pressure reductions, leakage recognition and optimized operations there are a number of ways to reduce that demand (and cost). When planning a new investment, it is important to take a calculated and realistic look at future operations, including new situational and environmental demands, to get a clear picture of how investment will be offset. A compressed air partner will help calculate these factors and more to provide an accurate picture of how quickly the return on investment can be realized. Upgrading your compressed air system to the latest technology can help you meet the energy, quality and sustainability demands of the future.
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