If your home’s heating and cooling system seems like it’s at the end of its life, you should start thinking about how you can save money when buying a new HVAC system.
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Replacing your home’s HVAC system can be one of the biggest expenses of homeownership. Add to that the fact that high utility bills from running old, outdated equipment can also stress your wallet. Before you commit to a final decision on getting a new system installed, real our “how to” guide.
Actually, Spring and Fall are two of the best times to purchase a new HVAC system for your home. Since the temperatures are cooler, you don’t really need the air conditioning for the rest of the year; and even though Ohio temperatures are hovering in the 30’s and 40’s this time of year, running the furnace is not yet a necessity. Better to make a logical, well-thought out decision to purchase NOW rather than under the pressure of freezing temperatures.
Some companies provide price estimates based solely on square footage and matching your current equipment, usually by phone or email. Even in these strange times with COVID-19, you should insist on an in-home visit. Our estimator will examine your existing equipment and capture important details like manufacturer, model number and serial number, take necessary measurements, inspect your ductwork and thermostat. This level of detail allows us to provide you with the most accurate estimate, and eliminates any surprises.
You should assume that any heating contractor that will not provide a printed quote probably doesn’t stand behind their work. Although it’s a rare case in today’s market, it does still happen. For convenience (and to save paper), we provide an emailed estimate.
Some companies provide price estimates based on photos or video that you provide. Keep in mind that this may be an accurate final price, but there may not be enough detail in the photos you provide. Expect the HVAC contractor to make adjustments once they are on-site.
From time to time, Congress creates tax incentives to purchase higher-efficiency, new equipment certified through the Energy Star system. There are also rebates given by local energy companies, rewarding homeowners for investing in more efficient technology.
While the initial estimate of a new, higher-efficiency unit will be higher, tax incentives and utility rebates will ultimately save you money. In addition, you will save green on lower utility bills from a more efficient, newer HVAC system. Ask our HVAC estimator for available tax credits and utility rebates to factor in the total price of your system.
Many manufacturers offer rebates on certain makes and models of their HVAC systems. Most entry level, or lower-efficiency heating and cooling systems, will often not include much in the way of rebates or discounts. Higher-priced, high-efficiency furnaces tend to get higher, better rebates. Some offer instant rebates as a discount, some offer cash back, others may offer financing incentives or lower interest rates when you purchase higher efficiency HVAC equipment.
Beware of HVAC contractors that drop the price substantially if you pay cash. Does that mean the pricing is padded to make up for a lower interest rate? Possibly.
Did you know that businesses pay a merchant account fee up to three percent or more when you pay with a credit card? Some contractors will charge a premium to pay with a credit card. Others will offer that 3% discount when you pay cash.
Often, the best way to go with a large investment like a home heating and cooling system is a home equity loan. Many HVAC companies offer some sort of financing for their customers, often at a lower interest rate than when paying with a credit card. Be sure to compare all the options – cash, credit card, and financing – before making a decision.
Did you know that you can buy a heating and cooling system on Amazon and other major sellers online? While this may seem like a good idea, consider that you will have to pay someone to install it. We definitely don’t recommend this as a do-it-yourself project! While you may be able to make the mechanical, electrical and plumbing connections, how do you know what size system you should get? How to tune the system for proper airflow and efficiency? Even hiring a handyman or “side gig” kind of contractor off a site like Craigslist can get you in trouble. You wouldn’t ask your family doctor to do your taxes, or your dentist to repair your car… it just makes sense to hire a professional to complete the job from top to bottom, including specifying proper equipment custom sized for your home.
Another factor to consider when purchasing equipment is the warranty. Most HVAC manufacturing companies warranty the equipment, but not labor. So you’ll still have to pay someone to install a part when it breaks.
Just as a reminder, most manufacturers require annual maintenance on the HVAC systems to keep the warranty in effect. You should factor in the cost of annual maintenance in the total price of ownership of the new HVAC system.
At the time of this writing, it’s the middle of the fall season. Ohio winters and the frigid temperatures are still a month or more away, so heating equipment is on everyone’s mind. Most HVAC contractors are buy performing a fall furnace tune-up and safety check. Most homeowners thinking about replacing equipment are focusing on a single unit – the furnace.
Keep in mind the absolute BEST time to replace an air conditioner is when you’re having a furnace installed, and vice-versa.
When the temperatures in the middle of winter are below freezing – and your furnace decides to die – you are out of options at that point. You HAVE to replace your furnace (or freeze). Same scenario in the middle of summer, although air conditioning isn’t quite as important. But with many adults working at home, and kids being schooled remotely during the Coronavirus, you can’t afford to have an HVAC event disrupt your daily routine in the most extreme weather of the year.
Depending on normal weather patterns, the best time to buy an air conditioner is in the Spring (March and April) and the best time to install a new furnace is in the fall (September and October).
While it might be tempting to go with the lowest price on the installation of a new HVAC system for your home, instead think of this transaction as the beginning of a long relationship. Warranty service on the heating and cooling system will most likely be performed by the same company, so why not form that relationship with a company you can trust?
Dor-Mar has been in business since 1962, serving hundreds of thousands of customers during that time. Our overall rating online is best summed up by our Google reviews average of 4.7 stars. We have hundreds of testimonials from satisfied customers over the past 58 years. You simply cannot stay in business for that long without making a LOT of people happy.
Be sure to review any heating and cooling equipment estimates carefully. If you get multiple quotes, compare all the factors, not just the initial installation price. Think about
Have you ever heard of the “foot in the door” sales tactic? It comes from an old door-to-door tactic used by vacuum salesmen. If they could get the housewife to open the door to speak to them, the salesman would often jam his foot in the doorway to prevent the potential customer from closing the door.
The modern translation of this tactic is to advertise a super low price for HVAC equipment, then once the salesman sets foot in your home, you discover your home isn’t eligible or doesn’t qualify for the discounted equipment. READ THE FINE PRINT and closely examine the specifications of the equipment advertised. Chances are, it is smaller equipment or less efficient just to grab your attention and get their “foot in the door.”
Dor-Mar doesn’t advertise systems simply because we can’t accurately predict what your home needs! We insist on an in-person appointment to properly gauge your home for a new heating and cooling system. Anything else and you run the risk of getting the wrong size equipment installed in your home.
All of our estimates are prepared by Greg Brewer, grandson of our founder. Greg has been working in the industry for years, and quite literally has HVAC in his blood!
Contact Dor-Mar Heating & Air Conditioning today to schedule a free in-home consultation. We take pride in creating long-term, mutually beneficial relationships with our customers.
If you live in our service area (from the west side of Columbus, all of metro Columbus, to east of Zanesville) we’ll be happy to provide an on-site estimate for a new furnace replacement. Use the convenient appointment request form or call our expert customer service team to arrange for a personalized price estimate.
Our estimator will measure your home and perform an assessment, then recommend the size and type of furnace you should install, and available furnace options for your home. He’ll also review any available rebates or special promotions to save you more.
Schedule an appointment for HVAC system troubleshooting or maintenance with us today by using our online contact form, or call one of our seven neighborhood offices listed below. We pride ourselves on our customer-focused service, and our reviews show it.
NEWARK 740.345.6639 • COLUMBUS 614.238.6689 • DUBLIN 614.545.8939 • REYNOLDSBURG 614.365.1579 • WESTERVILLE 614.381.1540 • GROVE CITY 614.595.3098 • ZANESVILLE 740.454.2420
Dor-Mar…Your Climate Hero!
*Please note: neither the Centers for Disease Control(CDC), the World Health Organization (WHO), nor the manufacturer of our UV-C Devices have officially announced whether UV-C kills the current strain of Corona Virus (COVID-19). We urge you to err on the side of caution until we have a definitive answer, and take other measures to prevent the acquisition or spread of this virus.
“It was only a tiny drop of water, now and then,” lamented the homeowner. “How was I to know that all those little drops would add up to a huge water bill?” The same can be said of a heat treat furnace that is always down for this reason or that. Avoiding the hidden costs associated with equipment downtime is the key to saving money.
Proactive vs. Reactive Strategy
Maximizing furnace productivity requires a proactive approach, which must continue throughout a unit’s operational lifetime. This requires careful planning and anticipation of problems. The process should begin even before the purchase of a piece of equipment by matching equipment and supplier capabilities with production and process needs. Buying good, well-built, high-quality equipment and operating and maintaining it properly will avoid most hidden costs.
Overall equipment efficiency (OEE) is a measure of how effectively your equipment runs when you plan to run it. OEE is availability times performance efficiency times rate of quality. Here, availability is the percentage of scheduled time that the operation is available to operate (available time divided by scheduled time).
Overall Equipment Efficiency
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For example, suppose a work center is scheduled to run for a 435-minute shift. However, the work center experiences 30 minutes of unscheduled downtime. The available time equals 435 minutes (scheduled time) minus 30 minutes (downtime), or 405 minutes. The availability is 405 minutes divided by 435 minutes or 93%. Not bad, or so you think.
Now, let’s look at performance. Performance represents the speed at which the work center runs as a percentage of its designed speed. In other words, parts produced times ideal cycle time divided by available time.
Continuing our example, if the available time is 405 minutes and the standard rate for the part being produced is 40 units per hour (or 1.5 minutes per unit), then the work center produces 242 total units during the shift. If the time to produce the parts (242 units times 1.5 minutes per unit) is 363 minutes, then the performance is 363 minutes divided by 405 minutes or 90%. Again, not bad, or so you think.
Now, let’s consider quality. Quality represents the good units produced as a percentage of the total units started or good units divided by units started.
Continuing our example, if a given work center produces 230 good units during a shift, of the 242 units that were started, the quality equals 230 good units divided by 242 units started, or 95%. Again, not bad, or so you think.
Now, let’s calculate the OEE. In our example, OEE = 93% (availability) x 90% (performance) x 95% (quality) = 79.5%. This tells us that our efficiency is not what we should expect, and improvement is needed and warranted.
Anticipatory Maintenance Planning
As with any good maintenance operation, finding and eliminating problems even before they occur is part of a proactive approach (Fig. 1). The trend today is toward planned preventive-maintenance programs so that manufacturing output remains consistent. Some strategies use:
Planned preventive-maintenance programs also allow those involved with the equipment to:
Scheduled maintenance can also aid in the reduction of nonconforming production parts (i.e. scrap). Unacceptable parts are often the catalyst for unplanned downtime (Fig. 2). By being proactive in your maintenance plans, you should be able to minimize defective parts.
Hidden Costs of Downtime
Having reliable equipment directly relates to minimizing downtime. The key factor to consider when looking for a heat-treat furnace is understanding the True Equipment Cost (TEC), which equates to the initial investment plus the total cost to maintain (over time) divided by equipment life expectancy. In the heat-treat world, this is often 30-50 years!
When considering the purchase of new manufacturing equipment, initial purchase cost should not be the only factor to consider, nor necessarily the most important factor in determining what to buy. In addition to the initial cost of the equipment, there are other criteria that should be factors in the decision, namely
1. Total equipment cost – This alone provides the true picture. When analyzing the cost to purchase, one must include not only the initial investment but also the costs to operate and maintain. This involves understanding the utilized capacity of the machine in terms of utilities, manpower, component parts, energy, and environmental factors. Recognize that all equipment experiences downtime, whether planned or unplanned, but the amount of downtime is most often dictated by the robustness of the equipment and the responsiveness of those that service it (more on this later).
Dependability must be an integral part of the business decision. Ask questions such as: Will the equipment be reliable and available on a consistent basis? Will it produce quality parts, safely, while maintaining maximum uptime?
2. Equipment and process compatibility – Meeting process requirements is a necessity that existing or new equipment must achieve. Lengthening cycles or compensating for design deficiencies is unacceptable. Equipment that fails prematurely or experiences processing problems or unplanned interruptions in production costs time and money. Environmental safety should also be a consideration because we can expect more regulations as time goes on.
When equipment design reflects process requirements, optimal production capacity can be achieved. Understand if you are buying a heavy-duty or light-duty furnace and plan accordingly. Heavy-duty furnaces can be pushed up to (and often exceeding) manufacturer’s limits while light-duty equipment typically cannot.
Uptime availability in the heat-treat industry is typically 85%, and in some (rare) instances approaches 90% and above. Do not expect more out of your system than you are willing to put into it. Costs associated with unplanned downtime may be 1-3% of asset value per year.
Other factors to consider in the equipment purchase are how you believe your processes and capacity demands will change over time. Because we live in a customer-driven market, we can be assured that demands will change. Will the equipment be capable of meeting these changes in the future?
3. Educate the workforce – Training plays an important part in bottom-line profitability. Whether it is the operators, supervisors, engineers or maintenance staff, everyone needs to understand their product, how it is being heat treated and the equipment in which the process takes place. In this way, the support staff (including quality and purchasing) can participate more effectively when something goes wrong.
A well-educated staff enables a company to achieve the fastest, most cost-effective solution to the problem. Training and experience help analyze the problem quicker, determine a solution and communicate a plan of action for service personnel to implement. This process takes time and commitment on the part of management.
4. Apply automation and advanced controls – Smart adaptation of automation, historical record-keeping and the ability to adapt to the changing needs of heat treating can increase profitability with only incremental investment costs. Automation takes the human element out of the operating equation, but humans are needed to select and design smart automation systems, which means that sensors and control devices must also be part of the planning process.
5. Avoidance of excess inventory and WIP – To compensate for poor equipment performance, one often builds additional work-in-process inventory. Costs associated with doing so, and often maintaining these increased levels for months or years, can be the difference between being profitable or incurring a loss. Knowing when scheduled maintenance will occur allows you to manufacture parts before your equipment goes down. One can build just enough inventory to make up for short-term interruptions and avoid long-term surprises. However, this assumes that maintenance can be done without discovering or creating additional problems. If these occur, furnaces are down for extended periods as companies struggle to identify the source of a new problem or fix the result of a malfunction or catastrophe.
6. Cost of emergency parts purchases – If an unplanned failure occurs, it is imperative to get the heat-treat equipment operational as quickly as possible. This will involve getting the necessary parts to repair the equipment. It also entails costs to install and the cost of expedited shipping. All of these increase the cost of manufacturing even though production is at a standstill. Having the right match of features and components on the furnace and having a primary and secondary (sometimes tertiary) supply chain can avoid huge cost overruns.
7. Overtime and outsourced production – During the time of an unplanned shutdown, you will still need parts. If other equipment can be used to produce those parts, overtime for manufacturing personnel may be required. This will also increase utility costs and may produce bottlenecks within the manufacturing process. If there is no other available equipment to use for production, it may be necessary to outsource your production to another party. This may jeopardize your promised delivery to your customer, and it will certainly increase your costs.
8. Total cost of ownership (Fig. 3) – Lost revenue due to downtime is a huge factor in determining the total cost of ownership (TCO). Cost of operation (life-cycle cost), maintenance and repair costs as well as the cost impact of unplanned downtime all factor into TCO. If the issues causing downtime are not corrected quickly and efficiently, they may lead to the loss of your customer, which ultimately means the loss of market share. The heat-treat industry is a competitive market, so you don’t want unplanned downtime affecting your customer base.
Things mechanical and things electrical can be fixed. As we say in the industry, we can throw enough money at these problems, and eventually, we can solve them. However, no amount of money can overcome a mismatched process. When process and equipment are not fully compatible, it will have an impact on the quality of the parts being produced.
9. Cost of product failure – Ever wonder why we always have enough time to reprocess, but never seem to have enough time to do the task right the first time? Product failures, especially those that escape the plant and make their way into the field, are devastating. These are true hidden costs that must be considered when selecting vendor partners.
10. Impact of equipment deterioration over time – Everything wears out, and all furnace components have a finite life and must be replaced. We know this and plan for it. When the same components repeatedly fail or the same systems break down time after time, only then do we become aware of the consequences of a poor equipment choice. Premature replacement of component parts adversely affects the bottom line. Determining the root cause of these types of problems must be priority one, and avoiding Band-aid fixes is an absolute necessity.
11. Making wrong assumptions – Too often, the most overlooked areas of an equipment purchase are the service and support that your supplier will provide. Given the complexity of today’s heat-treat equipment, your supplier partner must be prepared to walk you through the discovery process to determine why something went wrong; understand what happened; understand what needs to be done to fix it, and help plan and execute its repair.
Record keeping or maintenance logs, for example, should not be written with today in mind. They should tell a story that years later someone can understand and learn from when (not if) a similar problem reoccurs. Remember, the knowledge and expertise of your OEM is often the determining factor in the length of your downtime and the minimization of lost profits. So, keeping them informed of your current equipment and the lessons learned will not only benefit you but the industry as a whole.
12. Look for the overlooked – Uptime utilization is the goal in today’s cost competitive and technology-driven world. To streamline the manufacturing process, flexibility is required. One must ask questions such as: Do furnace pits make sense, or is it wiser to integrate heat treating into the manufacturing flow?
Design and/or material defects can cause unnecessary direct costs (e.g., labor, materials) while fabrication, assembly or installation deficiencies can produce unwanted delays, all causing a hit to bottom-line profitability. Other potential threats that can cause diminished returns are operator or maintenance errors. When these factors are examined prior to equipment purchase and plans are created to supplement the skills of the workforce, there is a better chance of minimizing production costs and maximizing throughput.
13. Be logical – Having a blank check to purchase heat-treat equipment is a rare commodity. Every company wants to get the most value for the least dollar, but not all equipment is created equal. It’s important to understand that an equipment purchase is a complicated process – one that should be given adequate time to evaluate the hidden costs as well as the obvious costs. For example, the life expectancy of heat treat equipment varies, but no matter what the equipment’s duty lifetime, you will need to partner with your supplier through its entire life. Ask yourself questions such as: Will the OEM be there to support you long-term, and are they committed (and staffed) with proper engineering and service support? Be sure you and your supplier agree on costs (both initial and ongoing), level of service and support, and mutual expectations.
14. Separate needs from wants – It is important to examine what the company’s needs are today and then project an estimate of future needs. The goal is to purchase equipment that is not only capable of meeting today’s production capacity but is versatile enough to meet tomorrow’s challenges as well. In many cases, the materials, processing requirements and load sizes change, but the equipment features do not. Therefore, building in and paying for flexibility up front will result in long-term cost savings.
Vacuum-Furnace Example
Vacuum furnaces (Fig. 4) are a prime example of a sophisticated purchase. As such, it is incumbent on vacuum-furnace manufacturers to provide rapid support capability. They should be an integral part of resolving equipment problems. This can be accomplished by such simple means as dedicated phone lines at the equipment for connection by OEM engineers, Internet troubleshooting, rapid-response teams, inventory of critical spares by the OEM, advanced diagnostic tools and well-trained engineering and service personnel.
The Bottom Line
OEMs need to differentiate themselves by their support, service, speed, and thoroughness. All of which helps their customers avoid the hidden costs of downtime. Many times low-priced, light-duty furnaces with poor support ultimately cost more to own and operate. Supplier partners who lack “critical velocity” or who are unwilling or unable to assist add cost to the user rather than save money in the long run. Doing the small things – such as managing and coordinating parts or having personnel, assets, and resources at the ready – make worthy vendor partners who save money by maximizing furnace uptime productivity.
References
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