Return on Investment – Case Study

Using ESE’s Q5 in-line analysis technology will yield a considerable return on investment.  How? By testing, then improving the performance of key constituents in the production process.

Let’s look at the case of a plant manager whose goal was to increase the moisture percentage in a cheese product by .30% - thus increasing the yield.  

The plant was currently running at 38.5% moisture with a setpoint target of 38.8%. Using in-line analysis the plant was able to conduct constituent value testing much faster than with a traditional production process, resulting in the ability to identify their standard deviation and then change moisture content quickly and accurately. Standard deviation is the difference between the setpoint target and actual performance.  After identifying their standard deviation, then controlling it with the Q5,  they increased their moisture by .30% to 38.80 resulting in a higher yield per batch without sacrificing quality and without any additional expense. 

To calculate their return on investment, the plant considered their plant’s key input variables:

Lbs. produced per batch = 30,000

Batches produced per day =20

Price per lb. = $1.80

Then, they used ESE’s electronic return on investment calculator to figure their savings, or profit gained. The calculator uses the following formula:

Volume x Frequency x Standard Deviation Improvement x Price of Constituent (or product) = Savings or Profit Gained

For this plant, the calculation looked like this:

30,000 lbs per batch x 20 batches per day x .0030 (.30) standard deviation improvement x $1.80 per lb. =    $3240.00 daily savings or profit

$3240.00 x 6 days per week run x 50 weeks per year run =  

$972,000 annual savings or profit

The plant calculated the increased profitability resulting from a higher yield per batch at $3,240 per day or $972,000 per year. The increase in moisture content by just .30% resulted in a payback on the initial solution investment in less than 4 months.  So obvious was the success that the plant easily justified and implemented the in-line analysis solution at two additional plants almost immediately.

As this case illustrates, investment in process control and in-line analysis is a smart investment with a quick return. 

To have a more detailed ROI calculation performed, click here to contact one of our Technical Analysts.

To understand how standard deviation impacts your profit, click here