Calculating the Value of Avoided Unplanned Downtime

By Matt McCorkle

In a recent article titled “Calculating the value of avoided unplanned downtime” from Plant Services magazine, Burt Hurlock poses the question “How much have the avoidable catastrophic events of the 21st century cost us, and how much would we have willingly spent to prevent them?”

He goes on to talk about how downtime events that were avoided still have value and sophisticated plant operators know exactly how much value. Understanding that downtime, of any length, has rippling effects on the entire organization is valuable in itself. One small event can cause unproductive labor hours, costly incident investigation, wasted raw materials, product spoilage, etc. and the bigger the event, the higher the risk and higher the cost is.

Knowing that your compressed air system is not only critical to your production but also affects the quality of your products, would you invest to avoid downtime from your compressed air system? We often encounter customers who tell us “If my compressor goes down, the facility stops.” But in the next breath tell us a back-up compressor isn’t worth the investment. Customers are frequently more concerned with purchasing a larger than necessary compressor that accommodates future growth than planning for the present with a redundant solution.

So, what’s the cost of unplanned downtime? Estimates of the average cost vary from $30,000/hr (Industry research by Stratus) to $260,000 (Aberdeen research). At that rate, any investment in back up quickly pays for itself.

Planning your compressed air system to have redundancy with a back-up compressor or using the 50-50-50 approach with three smaller compressors can help eliminate the risk of unplanned downtime in your compressed air supply. Not only will a multi-unit solution eliminate the compressed air system as a downtime risk for your production lines, it will also supply air more efficiently as your compressed air demands vary by shift and production level.

Ask yourself Burt’s initial question about your own company. “How much have the avoidable events of this year (or the past 2 years or 5 years) cost us, and how much would we have willingly spent to prevent them?”

As Burt Hurlock writes in the article, “all avoided unplanned downtime has value.” Knowing that your compressed air system is vital to your plant, realizing the value, and planning to have a back-up air supply will help you avoid downtime from an unplanned event or even downtime for scheduled maintenance. The value of a reliable second compressor may far outweigh the cost of the downtime it prevents.

Burt goes on to say “The single most important ingredient to the just-right balance between investment and risk is information. Companies that know the value of events that don’t happen also understand that reliability is nine-tenths information and only one-tenth perspiration. The opposite is true for companies that don’t know the value of events that don’t happen.”

When you have your next event, how much will you be sweating?

Your eyes are often bigger than your stomach

A report card on compressed air knowledge: Part 2

By Michael Camber

Missed part 1?

Click here for the results of a recent quiz of automotive service shops about compressed air.

The point least understood among the surveyed compressor users is how to size a system for the shop.  We presented a scenario with five techs, each using 15 cfm tools, and gave five different compressor size (hp) options. Less than 40% picked the most appropriate option, and most incorrect answers were heavily over-sized.  We see this in the field all the time.  Operators routinely overestimate the size of compressor needed.

Depending on the type and design efficiency, most commercial/industrial compressors produce between 3 and 4.5 cfm per horsepower.  The (simplistic) quiz scenario assumed all air users would need air simultaneously.  Using 4 cfm/hp, a 20 hp compressor with 100% duty cycle would supply air to all five users.  As mentioned above, 40% chose this option, but another 40% chose either the 30 or 50 hp options. 

The downsides to oversizing include:

  • spending more up-front for the equipment (compressors, dryers, etc)
  • paying more for parts and service
  • increased wear from over-cycling (starts and stops)
  • reduced energy efficiency (this applies more to rotary type machines than pistons, which mostly operate on start/stop controls)

Now factor in the reality that it is very rare for all techs to be operating air tools at the same time.  So let’s say only three of five people will be using air simultaneously (total of 45 cfm).  A 15 hp compressor would easily handle it.  If only two out of five were using air at the same time, an efficient 7.5 hp with 100% duty cycle might suffice.  Or bump it to 10 hp (40 cfm) and add 100-200 gallons of storage to be safe.  Far more cost effective than buying the 20 hp.

For energy efficiency, it would be better to get two smaller machines than one large one. This also give you back-up, but it does drive up the initial cost.

If you anticipate that you will need more air in the future,  arrange your compressor room/area to allow for additional machines, but only buy what you need in the short term.  The money you save on energy and service will help pay for the upgrade later.

Download our Compressed Air System Installation Guide E-book for more installation tips.

A Report Card On Compressed Air Knowledge

By: Michael Camber

One of our media partners recently quizzed their subscribers to assess users’ knowledge about compressed air systems.  The respondents were in the automotive service industry, but the questions were not industry or application specific and the answers are a fair reflection of compressed air knowledge of most businesses with compressors 25 hp and below.  We thought it would be useful to present the results and discuss areas where understanding of compressed air systems needs a boost.

Duty Cycle

A strong majority (84%) of respondents knew that reciprocating/piston type compressors operate at higher internal temperatures than rotary type compressors, but nearly 1/3 mistakenly thought that shop recips could safely run at 100% duty cycle.  Some recips are built to run at higher duty cycles than others, but all air-cooled units need at least some downtime to cool off.  The consequences of overrunning them include loss of lubrication, seizure, motor failure and higher oil carry-over into paint and equipment.

Check out our Piston vs. Rotary Screw Infographic for a quick comparison.

Piping Material Choices

Regarding piping, nearly 2/3 know that copper or aluminum are better choices– especially if air quality is important– but a full 20% picked PVC as top choice.  While PVC doesn’t accumulate or add contaminants, it presents one major problem:

Wait for it ….

Yes, PVC is less safe than any metal pipe and is subject to rupturing and fragmenting.

Solving Pressure Problems

When presented with five possible solutions for solving a low pressure problem, everyone recognized that buying another (or larger) air compressor to get more flow is not the first step to address the problem.  Checking for leaks, checking pipe size, adding storage and doing a pump-up test to check compressor function were all known to be better first steps.  We were pleased to see that over 80% recommended doing all of these things before buying another compressor to get more flow (cfm).

Filters Are Not Dryers

Likewise, we were pleased to see that everyone knew that a compressed air dryer is a simple solution to address the common summertime problem of increased water in compressed air lines and tools.  It’s apparent though that not everyone understands the difference between dryers and other devices that remove some moisture. Filter style moisture separators (with drain valves) are effective at removing liquid water.  Storage tanks do the same and can allow some moisture vapor to cool and condense to liquid, but the key to effective drying is reducing the compressed air pressure dew point below the ambient temperature.  Tanks and filters cannot do it. A dryer can.

The last quiz question was about compressor sizing. Since this topic is a bit more complex it deserves its own post. Stay tuned…