Reducing the Cost of Shell-and-Tube Heat Exchangers
These five tips can save thousands of dollars when purchasing heat exchangers.
This brief review of good practices can save thousands of dollars for processors looking to purchase a new shell-and-tube exchanger.
1. The Right Design Always Reduces the Cost
Heat exchanger design is definitely a balancing act. While several different designs may achieve the desired operating characteristics, space limitations or other job site constraints may limit the ability to achieve the absolute lowest cost heat exchanger. Keep in mind, however, that the ultimate goal is to achieve the lowest cost possible for the actual circumstances.
In general, from the viewpoint of initial cost, a small diameter/long exchanger usually costs less than a large diameter/short exchanger of equivalent surface area. Large diameter designs create the need for thicker shells and tubesheets, larger/heavier forgings for body flanges, more tubes to install and more labor to build the exchanger. As the overall length grows, the cost of a long and narrow design will eventually be offset by production, handling and logistics.
2. Timing Is Everything
When a customer requests a short delivery, they can expect a higher price. If you do not absolutely need a short delivery, allow as much time as is possible for design and delivery. If you are not sure how long a standard lead time is, contact your heat exchanger manufacturer. With a phone call or two, they can usually give you a realistic expectation. A week or two can make a significant difference in the price of the heat exchanger.
Manufacturers rarely have a backlog of orders of less than three to four months. To expedite an order without extending the delivery for orders that are already scheduled for production, the manufacturer will more than likely substitute overtime hours. Overtime hours incur more cost.
Raw material suppliers work the same as heat exchanger manufacturers. When the lead time is short, prices rise! For example, tubes are a significant cost component in most exchangers, especially when non-carbon steel tubes are required. The price of tubes for a quick delivery is based on warehouse stock prices. Stock prices are higher than mill prices because they include more handling and the cost of carrying inventory. Forgings, another significant cost component, are rarely available from stock. The forging manufacturer must break into their production run or put the order ahead of previously scheduled orders. A price premium is always charged for expediting an order.
3. Specifications Significantly Affect Cost
The bottom line is simple. In the design and specification phase, know exactly why each material is specified and what it accomplishes. Including a specification simply because it was used on a previous job can have a significant impact on the cost of the current job. Materials specified that are available from either a single source or few suppliers almost always carry a significant premium. Mills frequently have minimum quantities for special material runs. Lead times also extend as a result of excessive material specifications. Approved manufacturer lists sometimes eliminate the most economical source of materials.
Tube specification, too, can significantly affect the cost of a shell-and-tube heat exchanger. Seamless tubes can be several times more expensive than welded tubes. With modern welding technology and testing capabilities, welded tubes should be more reliable than ever.
In addition to seamless versus welded, tube wall thickness significantly affects the final cost. Requiring a minimum wall tube when an average wall tube will do the job usually adds unnecessary cost to the exchanger. When in doubt, call the manufacturer and ask questions before finalizing the specification.
Specification of test requirements is similar to specification of materials. Additional testing always adds cost to the job. Again, know exactly why each test is required and what it accomplishes. Additional testing that requires hold points for witnessed inspection by a third party also increases cost and extends lead time.
4. Find the Right Manufacturer for the Job
While most shell-and-tube heat exchanger manufacturers claim to handle all varieties, materials and constructions of exchangers, some are better than others at large exchangers versus small exchangers, exotic materials of construction versus carbon steel, overlay versus solid alloy construction, high pressure versus low pressure, etc. Understanding a manufacturer’s capabilities is not the same as understanding their real strengths and competitive position in the marketplace. Bigger is not necessarily better. A large manufacturer with many large customers and a large overhead may not pay as much attention to smaller customers in busy times. Small manufacturers usually focus on specific parts of the market and may be more efficient when dealing with products in their market niche than larger manufacturers may be.
Another important factor to consider when selecting a manufacturer is location. Most customers believe that a manufacturer that is not in close proximity to their plant will not be competitive when purchasing a heat exchanger. While this may be true for a single, small-diameter, carbon steel heat exchanger, it is not always the case.
For example, a recent request for quote for a Gulf Coast customer included three competitors: Competitor A priced their exchanger at $47,000. Competitor B priced their exchanger at $36,000. Both competitors A and B were local manufacturers. Competitor C’s price was $27,450. Even with the additional freight from anywhere in the coastal United States, Competitor C had the best price.
However, with large oversize/overweight exchangers, the reverse may be true. For example, with alloy exchangers, the extra cost of freight is often a small fraction of the purchase price. Remotely located manufacturers are not at a real cost disadvantage. Even with small carbon steel exchangers, when two or more exchangers can be put on the same truck, freight becomes a non-factor.
5. Careful Planning on the Front End of a Project Cuts Cost
As a whole, the heat exchanger industry does a good job at keeping the cost down, selecting suppliers and specifying the requirements for each job.
As more attention is dedicated to design, identifying market factors, selecting the right manufacturer and reducing the specifications to the essentials required for the job, the cost of shell-and-tube heat exchangers drops.
Planning far ahead and ordering new exchangers and replacement components with ample lead time reduces cost. Knowing when your local manufacturers are the busiest can signal an opportunity to save money by looking outside your region for suppliers. For example, during turnarounds, when local manufacturers are swamped, prices are up. In other markets not experiencing a glut of turnaround work, prices may be down.
When in doubt, call several shell-and-tube heat exchanger manufacturers and ask questions. They should be willing to assist potential customers and should know how to help save money.