10 MONEY-SAVING TIPS FOR TOUGH TIMES
SAVINGS ARE IN THE AIR
Compressed air is expensive. The Department of Energy’s Office of Industrial Technologies estimates that it costs a typical
manufacturing facility with a 200 hp compressor $51,064 a year. At the same time, according to the Compressed Air Challenge (CAC) ( www.compressedairchallenge.org), compressed air systems in the U.S. consume about 90 billion k Wh of electricity per year. A brochure available from ENERGY STAR has a formula for calculating how much your facility spends on air.
It’s at www.energystar.gov/ia/business/industry/compressed_air1.pdf.
CAC has two useful software packages available: AIRMaster+ compressed air system assessment and analysis software to
maximize the efficiency and performance of compressed air systems, and Log Tool software, a companion data importation
and analysis aid. Both are available for free download at www.compressedairchallenge.org/toolbox/index.html#Log Tool.
CAC also has a manual for sale on best practices for compressed air systems.
There are companies that conduct energy surveys for a fee, but there’s also a great deal of free assistance. For example,
the federal government has many resources for energy-saving practices. A good place to start is the Federal Energy Manage-
ment Program’s section on Operations and Maintenance, at
www1.eere.energy.gov/femp/operations_maintenance/index.html.
ENERGY STAR, a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy, has a
library of tools and resources on implementing energy-saving strategies; look for it at
www.energystar.gov/index.cfm?c=tools_resources.bus_energy_management_tools_resources.
Also, many local energy utilities have rebate programs, demand response programs, self-generation incentive programs
and training available. A national list is at www.dsireusa.org.
The Boiler Efficiency Institute, www.boilerinstitute.com, has a list of publications and computer programs that can aid in
improving not only boiler efficiency but HVAC systems and electrical systems.
The NEMA Premium Motors program provides guidance and technical information on the use of high-efficiency motors;
check it out at www.nema.org/gov/energy/efficiency/premium/.
To easily access the links above (and throughout this issue of the magazine), visit ValveMagazine-digital.com.
says another good idea is to be vigilant
and make sure suppliers’ prices are in
line with raw material costs. For example, though stainless-steel prices have
been high, in recent months the prices of
steel scrap and nickel have come down,
so it’s important to make sure that
prices quoted by materials’ vendors
come down as well, he explains.
TIP 7:
Don’t Scrimp on Quality
When times are hard we switch from
fine wine to beer and from sirloin to
hamburger, but such downgrading isn’t
always a good idea when it comes to
buying valves or other industrial supplies. “What I’d encourage,” says Holtgraver, “is that users pay attention to
what their total cost is after a product
has been installed for a while.”
Norman adds this warning: “Be
wary of duplicated parts, because the
tolerances, the materials, the coating
and the finishes are not going to be the
same as original manufacturers.”
TIP 8:
Compare Outsourcing,
Insourcing and Backshoring
While outsourcing certain functions can
save money, be careful because such
arrangements often have hidden costs
caused by administration headaches,
unexpected labor disputes, poor communications and other factors. In fact,
some companies are discovering they
can save money by moving previously
outsourced functions—including manufacturing—back home. For example,
the most-cited reason for moving production to China was low labor costs.
But Chinese wages are beginning to
increase.
On top of that, shipping costs have
increased. “We saw the fuel prices skyrocket,” says Mark Cordell, president,
Distributed Valves Division, Cameron
International, and “we saw freight costs
just skyrocket at about the same pace.”
As far back as August 2008, Supply
Chain News quoted Dr. David Simchi-Levi, Professor in the Department of
Civil and Environmental Engineering at
MIT, as saying increases in fuel prices
and transportation costs have led many
companies to a tipping point, “where
logistics costs have started to negate the
unit cost advantages of China and other
Asian countries.” Some have shifted
production to Mexico, and others have
brought it all the way back to the U.S.,
according to the article.
There also can be differences in quality between offshore and American-manu-factured goods. “I don’t want to be too
specific,” says Knox, “but I’m well
aware of a number of situations where
quality coming from China has not been
up to expectations.” And, says Oaks,
there’s that nagging worry: “What will
happen with my Chinese sources? I wonder if they’re stealing my patterns?”
Not all outsourcing is to China, of
course; European companies tend to look
to Eastern Europe for low-wage labor.
But North America can look good even
compared to Eastern Europe, according
to Oaks. Many global companies have
