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Unveiling the Hidden Pitfalls of Compressor Company Audits: Vendor Bias and Demand Side Misses

Auditors of Compressed Air

Optimizing compressed air systems for cost-efficiency and performance is an intricate task. Most plant personnel understandably rely on trusted vendors for system recommendations, presuming they offer reliable, low-cost solutions. However, this trust can lead to misconceptions, especially in the context of system audits. It is vital to recognize that the objective is not merely about generating air, but rather about prudent fiscal management.

Herein, we uncover the potential pitfalls of employing your compressor company for audits. We provide insights on safeguarding your financial health, focusing on project costs measured in terms of return on investment (ROI). Utilizing compressor companies for audits often inflates project costs while reducing the expected savings.

The potential hazards of relying on a compressor vendor for audits include:

  • Product Line Bias and Voids

  • Supply-Side Concentration

  • Inexperience on the Demand Side

  • Project Cost Inflation

The inherent conflict of interest when consulting an entity that benefits from the solution it suggests is akin to purchasing medicine directly from your doctor.

Product Line Bias and Voids

Contrary to popular assertions, no single compressor company possesses an all-encompassing equipment lineup suitable for every plant. Compressed air systems exhibit complex dynamics due to various supply equipment, application variations, equipment sequencing, and control methods.

As an auditor, I am often asked, "Who makes the best rotary screw compressor?" While a straightforward answer would simplify matters, the variety of compressor companies suggests no singular superior manufacturer exists. The optimal solution depends on the specific circumstances, taking into account energy requirements, capital costs, operational costs, and customer preferences.

Regrettably, compressor vendors often exclude competitors' products from their audits, and the selection of control equipment, arguably as crucial as the compressor selection, becomes a secondary consideration. The efficiency difference between control systems can reach 30% or more. An improperly controlled system adds not only energy costs but also productivity losses due to inadequate air pressure or throughput issues.

Furthermore, product line bias can lead vendors to oversell certain technologies beyond their optimum ROI threshold. Prime examples include oil-free compressors and variable speed drive technology. This bias to sell their products, especially new ones, resulted in the development of automated survey tools intended to increase sales and profits.

Supply-Side Concentration and Lack of Interest and Expertise on the Demand Side

Optimizing costs requires a balanced focus on both the supply and demand sides. In our experience, one-third to two-thirds of the cost optimization potential lies in demand reduction measures. These measures often require no compromise from production and are relatively inexpensive to implement. Furthermore, they can decrease operating costs and the capital required for supply-side improvements.

Unfortunately, the majority of today's audits concentrate on the supply side, providing at most a superficial examination of the demand side. In contrast, comprehensive audits considering both demand and supply aspects yield significantly better outcomes. Unfortunately, many compressor companies lack industry-specific knowledge due to their geographic operation mode, which limits their ability to deliver in-depth demand-side analysis.

Project Cost Inflation

The propensity of compressor companies to focus on the supply side often leads to the unnecessary addition of new compressors. Over 90% of the compressors bought in North America are oversized or superfluous. In contrast, over 95% of the projects we handle at Compressed Air Consultants do not necessitate new compressors.

In summary, while compressor companies offer enticing solutions, inherent biases, and supply-side emphasis can lead to inflated project costs and reduced ROI. Optimal system operation requires a balanced approach between supply and demand, taking into account the unique requirements of each plant.

At Compressed Air Consultants, we pride ourselves on our independence from vendor bias, our deep understanding of demand-side complexities, and our commitment to delivering value and cost-efficiency. Trust in your system optimization is crucial, but it should always be verifiable. With us, you can rest assured that your compressed air system is in expert hands.

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