Case Study: Does Investment in Critical Motor Storage Programs Justify the Potential ROI?
In our last blog post, we discussed the benefits of establishing a critical motor testing and storage program. Obviously, having a supply of tested replacement motors at the ready will dramatically shorten the electric motor replacement process. But many facilities managers question whether the investment provides an adequate ROI (Return on Investment).
So today we will look at a recent client who worked with Hi-Speed Industrial Service to verify that critical spare motor inventory would perform when called upon. Located in Tennessee, this papermill customer had recently doubled their plant’s size, production, and number of employees. As they continued to grow market share, reducing down-time while lowering maintenance and operation costs became paramount.
The original terms of this critical motor evaluation and storage program were to:
- Perform conformance testing of existing and new motors purchased that had been stored on-site for years.
- Perform electrical integrity testing on all existing and new motors purchased.
- Provide a climate-controlled storage and maintenance location for their existing inventory of replacement motors.
The client’s motor inventory consisted of 31 new motors and another 28 critical spare motors previously in production.
The Hi-Speed team inspected and tested all 59 electric motors before moving them to the climate-controlled storage facility, and here are those test results.
- 48% of the total company inventory (28 motors) failed conformance testing upon receipt and required repairs before being put into service.
- 15%, or nearly 9 motors failed their electrical integrity tests and required rewinds before being certified for service.
- 33% of the electric motors required PM (preventative maintenance) or reconditioning services before being deemed installation ready.
As a result of this electric motor testing and storage program, the customer’s service team now knows that their replacement motors are ready when needed. Imagine the piece of mind their facilities manager must now enjoy, after eliminating that too common scenario of replacing a failed critical motor only to find that it will not run at all or will not run per its nameplate. Further, as happens many times, motors fail at the most inopportune times. Confirming that critical spares are ready to go is essential to preventing unplanned downtime.
Electric Motor Storage: The Dollars and Sense
Unfortunately, setting up a critical motor testing and storage program is not a one-size-fits-all proposition. The costs will vary greatly depending on your industry, the size and types of motors needed, and the state of your preventative maintenance programs and policies.
But we can provide a breakdown of the costs to help you decide if a motor testing and storage program could reduce your downtime while lowering operating costs.
The estimated savings to the customer in the first year based on projected repair costs without a functioning critical spare totaled $317,000.00.*
Through 2021, the estimated savings totaled $806,000.00.*
*Potential downtime was based on eliminating potential low voltage rewind costs. Calculating in potential medium- or high voltage rewinds would have increased potential savings dramatically.
Of course, those numbers represent the estimated savings for only repair and maintenance costs. On the other side of that coin is the production downtime created when a key component fails or requires servicing.
The customer determined that our critical electric motor storage program also saved them another $1.2 million in potential production line stoppages.
Combined, the maintenance and downtime savings equal just over $2 million, compared to the original 4-year roughly 5% of the savings. For every dollar invested into their critical motor storage and testing program, this customer saw an ROI of 1800%. ROI:
If you’re ready to reduce maintenance costs and production line downtime, the Hi-Speed team can answer any questions you might have, simply send them an email or call our main line to start a conversation regarding critical electric motor testing and storage for your company.