Return on Investment
The economy today is not where it was in the 1990s. Spending is tight and every piece of capital expenditure is being scrutinized. Decisions that used to be made in the plant now often get elevated one, two, and three levels up the chain of command, where someone with a sharp pencil is asking the question – “What is the Return on Investment (ROI)?”
For many investments, there is not a great answer. Sometimes managers decide to purchase something simply because they need it or because it removes a great pain from their operations. Unfortunately, need and pain do not have buttons on a calculator and sensible investments without solid business cases often fail to make the budget cut.
But what is the ROI of Purity? Can it be measured? The problems ISOPur solves often have tremendous economic value. A purification solution can have an extremely high ROI, sometimes over 100% per year with a payback period that is sometimes as fast as 3 months and almost always under 24 months.
There are four areas of tangible economic value that an ISOPur unit can address:
1 :: Oil and fluid disposal costs- Before ISOPur, oil was treated as a disposable that was meant to be replaced. With ISOPur, oil becomes a capital asset whose lifespan is many times what it is today. The costs of disposal and replacement are virtually eliminated. For standard mineral oils, it costs at least $5 per gallon to dispose of and replace a tank of oil. Thus, a 2,000 gallon reservoir incurs $10,000 in fluid replacement costs for every oil change. For more expensive synthetics and specialized fluids such as phosphate esters, the costs can run up higher than $50 per gallon. For every avoided oil change, ISOPur allows you to capture the fluid disposal and replacement costs as savings.
2 :: Maintenance, Including Flushing Services- Some plants budget for “routine” maintenance that doesn't have to be routine. Frequent scheduled machine rebuilds, line cleaning and flushing services, servo valve replacements, and bearing replacements are symptoms of a problem. These time consuming and expensive routines can often be avoided by proper system purification. Since BCA eliminates varnish and sludge, ISOPur eliminates the need for flushing services and can greatly extend the interval between full machine rebuilds and bearing or valve replacement.
3 :: Improved Production Yields- High precision machine tools and hydraulically driven equipment can suffer significant production losses due to fluid problems. These problems often manifest themselves with symptoms such as vibration, drifting, uneven cutting, sticky control valves, low/inconsistent product quality, and poor yields. The root cause is often impure hydraulic oil. ISOPur has installed test units on cutting tools, plastic injection molding machines, and a hydraulic test stand for precision actuators with excellent results. Each of these applications saw an immediate yield improvement that left production managers amazed and excited. These yield improvements dropped straight to the bottom line and made these plants more competitive and profitable.
4 :: Reduced Downtime- When mission-critical equipment fails, the ripple effect through a plant is immediate and significant. For example, bearing failure on the main power turbine can bring a plant to its knees, resulting in massive downtime costs that can be calculated on a per minute basis. Sticking valves on a super-calender in a paper mill can shut down a line multiple times a year. Every time it happens, the plant loses tens of thousands of dollars instantly in productivity, not including the tons of good paper that must now be sent to scrap.
These are the tangible, quantifiable benefits that ISOPur can provide. Of course, those in the plant also recognize and value the intangible benefits as well:
:: Peace of mind
:: Employee health and safety
:: Positive environmental impact
:: Not getting paged in the middle of the night
No two plants will earn the same ROI from an ISOPur investment. That's why ISOPur sales representatives work closely with you to understand the specific conditions of your plant to build a custom ROI business case. In some instances, the ROI may not be enough to justify your investment. In those situations, our representatives would be glad to provide you with ideas on alternate solutions to your problems.