Payout Economics on Process Stream Analyzers
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The installation of process instrumentation can result in lower product cost, improved product specification and/or compliance with governmental regulations. Economic evaluation of the cost of instrumentation as compared to savings in any of these areas may be made to justify each installation.
An on-stream analyzer was installed. The cost of the equipment was approximately $8,000. The total cost of installation was an additional $3,000. The payout was in ten months. This is due to the economic credit for smoother operation along with a savings from reducing laboratory tests from the original 24 tests per day to 4 tests per day.
An analysis was made on the cost involved if the input ingredients could be reduced somewhat. The input ingredients here could be reduced $35,000 (year) where just enough was used to do the job. An instrument was installed. There was a $3,000 installation cost, and the instrument cost was approximately $8,000. The payout was in approximately seven months by maintaining the same output but with less input ingredients. (See example above.)
A turbidity unit was installed to evaluate/test on various filter brands and types of both cartridge and "filter aid" for minimum filter cost yet maintain the original quality. Base equipment price was $7,000.
In order to avoid extra storage and extra recovery costs, a turbidity meter was installed. The cost was approximately $7,000 but no payout or return on investment was calculated as installation is classed as an "insurance item because the effects over turbidity can be extremely costly." A payout analysis could have been made - perhaps based on the cost of rerunning an out of spec tank quantity versus the cost of the instrument.
A situation where production is near capacity and increase in the throughput because of closer turbidity control could equal $5,000 per month. Installation of a turbidity meter was warranted.
In production of an assembly, the presence of unwanted particle can cause the assembly to go out of spec, but if it passes into the next operation, then it becomes too late and too expensive to recover. So, it must be caught early on in the process.
The presence of and reuse/recovery of a catalyst can justify the installation of a turbidity meter. If you have an upset (say, of $4,000 cost) occurring once in a while, then the installation cost of $3,000 plus wiring can be paid for quickly.
In a situation where it was understood that low parts per million concentration could cost a loss of effectiveness, it had been the practice to oversupply the chemical to the process. When an instrument was added, the original cycle time rule of thumb of so many hours changeover was extended to several times that many and over $100,000 worth of chemicals were saved in a two-year period.
Measuring particle concentration resulted in longer filter cycles and more filter throughput. The payout was based on the value of the cycle and estimated to be more than $10,000 per month. This was accomplished by automatically measuring PPM of particle chemistry.
A product was blended with another product and continuous monitoring of it better achieved the correct ratios so that increased profits could be seen.
There are several goals when budget studies are requested. The main objective is to reduce the cost, typically, a reduction in chemicals, manpower, or laboratory work. These would be expressed as cost savings in material, labor and, possibly, other categories.
Alternatively, there could be anticipated increase in sales because of improved specifications, for example, longer shelf life. This could be thought of as a new business investment. In some cases there may be fmes involved where particles are being discharged and that would be entered under the other category of cost savings.
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