Improving Profitability for Vacuum Heat Treatment Furnaces

There are two obvious ways to increase profits in any manufacturing facility. You can cut your costs, or you can raise revenue by expanding your production. 

Option 1: Cost Cutting. Cost-cutting is the method that usually gets first attention, particularly among financial controllers, but cost-cutting is only effective when the quality and the productivity of your factory are not adversely impacted. It is the impact to productivity that limits the profit potential of cost-cutting, there is only so much you can cut.  It can also rankle the workforce as well as management, which has a significant downside, particularly management and employee morale. If morale is hurt too much, you could end up with a loss instead of a gain. 

Option 2: Increase production? This is the more popular side of increasing profits with operations and engineering. Increasing production can come in several different ways, but most often it means adding more furnaces, adding more manufacturing capability, or even building new facilities. These are focused on the top line, but they involve large capital expenditures. The typical heat treat furnace can cost $1M to $10M. It can also cause significant production disruptions while the furnace is being installed, in both time and the focus of the labor force during the installation. It may even be necessary to shut down an entire production line to replace it with new equipment. Though exciting, moving to a whole new facility causes costly downtime and a great deal of capital outlay.  Furthermore, when you buy a furnace, your costs of running that furnace come with it.

Watch Now On-Demand Webinar: Increase Your Production NOT Your Footprint

If you have one furnace and need to double your production, then you must buy a furnace, however, if you need to expand your production by 10%, say you go from 10 furnaces to 11, your best bet might be to upgrade your vacuum equipment on an existing heat treat furnace to get a 10 percent higher production throughput. If your interest is in getting the newest furnace technology in order to enable your business to capture higher-end customers, then a new furnace is likely in your future.  Care must be taken, the business cycle turns up and then it turns down just when the future of your business looks the rosiest.  When lead times are long because everyone wants a new furnace at the same time, think seriously about vacuum upgrades first. 

Read more: 5 Things to Consider When Purchasing a New Heat Treat Furnace

It is likely you already know some ways you can upgrade your furnace to raise production.  Some of these upgrades have a big impact, but are very challenging to do.  Others seem to have big impact, but whether a particular upgrade actually delivers this impact is less clear.  To get the clearest picture, your first step should be to divide your complete system, into chunks that make sense, for example, the hot zone, the vacuum system, material handling, the cooling system, electronic controls system etc.  With these defined “chunks”, your next task is to measure how they impact either the quality of your product or the time to make the product (or both).  It is during this simple analysis that the upgrade projects that can return the biggest bang for your buck are revealed.  Often, because vacuum furnaces must wait for operating pressure targets to be established before any other action can take place, any reduction in the amount of time to reach that target pressure is likely to yield an immediate impact on your production. 

Download Now: INFOGRAPHIC 5 Things to Consider when Purchasing a New Heat Treat Furnace

If measuring throughput in how many components or tons can be produced per unit-time, the best upgrade is one that raises the throughput of your furnace. Small amounts of time shaved off per furnace cycle (from start of one load to start of another) add up to large productivity increases over the course of a year.  For example, you may think that reducing the system pump down by one minute is insignificant, but it could likely pay for an additional furnace in the very first year. 

Naturally, it depends on the duration of a single cycle and the value of that cycle, but we have seen many examples of this kind of benefit in the metallurgical industry.  What is even better, is that an upgrade to your vacuum system will likely cause only a short disruption to a furnace while it gets installed. 

Naturally, the more work you do before the installation happens, the shorter the downtime.  The length of disruption during installation depends on being ready. Un-package it, analyze it, make sure the piping is going to fit properly, make sure that all the control cabinets fit where they're supposed to fit. And develop a plan for integrating this new equipment into your current furnace controls. If it's done well, you can do it in a shift or a day. 

Reduction of downtime due to vacuum pump repair is another easy way to quantify ROI.  Often, operations and engineering go to the maintenance department and ask how much money they have spent on pump repair and maintenance over the course of a year in order to fill in those fields on their Capital Allocation Request (CAR). 

This method is easy to quantify, but it leaves the lion’s share of the cost out of the equation.  What cost is that?  Lost production while the pumps are being swapped or are having an oil change.  If you add up the hours it takes each year per pump and multiply that by the value per hour of production on a furnace, you will quickly discover that you can’t afford to repair your vacuum pump twice per year (often it can be much more frequent than that).  This is true of both the mechanical vacuum pumps and the diffusion pumps. 

Read more: 5 Tips to Keep Your Diffusion Pumps Running Smoothly

So how can you meet demand and cut costs at the same time? The best equipment upgrades will give you all three of the following. It'll expand your production, it'll lower your cost of operation, and at the same time, it will give you higher efficiencies. For example, if you have 10 furnaces and you get a 10% boost in production by doing an upgrade, this is equivalent to having an entirely new furnace. Upgrading furnaces to operate quicker would likely cost you significantly less than buying a single new furnace. And more importantly, you would need no extra footprint. To make it financially safer, the capital for upgrades can be spread out over time. For example, if you're going to upgrade 10 furnaces, you're not going to upgrade them all at once. If you do one per quarter, then it'll take you 10 quarters to finish your upgrades, which means that your capital outlay for upgrades will be spread over 10 quarters.  Leybold also offers equipment financing, which allows you to amortize your equipment for up to 5 years, which makes your cash flow positive in the very first month. 

Watch Now On-Demand Webinar: The Real Value of a Vacuum Furnace Upgrade

If you do get new pump upgrades, you're going to want to look for pumps that are smart pumps. It doesn't cost any more for smart pumps these days than it does for 'dumb pumps'. That is to say pumps that can't communicate well.

So, you might as well go for smart pumps. Why? Because your smart pumps will give you communications and control functions that fit perfectly with your PLC.  This communication and control will help you make your furnace more operator proof.  Protecting you from human error and unplanned downtime.

Read More: The Hot Zone – Innovate or Evaporate

Unscheduled downtime is possibly one of the most costly things that can happen to your operation and is the result of a failure during your process cycle.  That means you must scrap that process batch, which in the best case, means you have to recycle the materials, and in the worst case, you just ruined a customer’s products.  With vacuum pumps, unscheduled downtime can be minimized by carefully selecting the equipment with the best track record of durability. For example, you can get dry pumps that get up to eight years of life between repairs. Most dry pumps on the market are in the four to five-year between rebuilt range. The Leybold DRYVAC pump can get eight plus years depending on how aggressive the application is. This lack of repair intervention is also equivalent to higher production.  Even if you have spare pumps on the shelf, it generally takes 4 to 8 hours to complete a pump swap. 

There are some extra benefits that you get with an upgrade to a Leybold Dryvac/Blower system.

• No five-gallon oil changes every month.
• No oil spills on the floor.
• No oil smoke in the air.
• No high environmental noise from all those piston pumps banging away.

Inaction is safe, doing nothing is safe and expansion is expensive. It is what most people do, but it really is very likely costing you more than you think. With multi-million dollar furnace prices and long payback periods pair with the cost of maintaining the status quo, inaction is more likely costing you hundreds of thousands of dollars a year in lost productivity, and sometimes even millions.

The numbers can really be shocking when you sit down and add them all up. Consider the math and think about revisiting how you measure ROI before you draw your next set of conclusions around increasing production and/or reducing costs in your heat treat process.