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What Is an Owner’s Cost Analysis for Compressed Air?

By OTC Insights Team on May 9, 2023

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OTC Insights Team

Established in 1963, OTC Industrial Technologies is one of the largest industrial distributors & service providers in the United States. We're committed to seeing industrial operations advance through expert technical solutions & unmatched support using our years of experience.

Finding the most cost-effective solution for a manufacturing problem isn’t easy.  

Even when you have multiple viable options for solving a particular challenge, it can be hard to assess which provides the most long-term savings. This can be even more difficult when evaluating your options for compressed air in manufacturing. There are many factors to consider, each potentially impacting the performance and eventual cost. Ensuring a Return on Investment (ROI) while getting your production team the compressed air performance they need can feel like an impossible task. 

Performing an owner’s cost analysis can help you determine which approach is best for your business.  

Read more about how directair can benefit you. Shop Now.

What Is an Owner’s Cost Analysis for Compressed Air? 

At OTC, when a customer comes to us with a compressed air problem, we recommend performing an owner’s cost analysis before committing to a particular solution. This analysis examines the short-term and long-term costs of a compressed air strategy. It allows owners to make informed decisions about their operations.  

An owner’s cost analysis looks closely at your compressed air requirements and the current implementation of the utility. This includes the estimated cost of repairs, your energy usage, and potential wasted capacity. It audits what air you need and if any gaps in efficiency may be costing revenue or adding expense. 

The goal is to provide a manufacturer with all the data it needs about the cost of compressed air. Often, the analysis will uncover hidden costs or opportunities, factors that can bite deep into revenue.  

For example, many manufacturers struggle to fulfill their compressed air needs, relying more on temporary, get-by solutions or workarounds than addressing an underlying problem, which can cost revenue. Increased energy use from a poorly maintained or older unit is also costly, and leaks in your compressed air also lead to waste. Even if your compressed air is “working,” it’s still costing you more money every time you use it. 

When compressors break down, manufacturers face costly repairs and lost revenue due to downtime. Repairing or purchasing a new compressor can solve the problem, but this approach is expensive and might not be the best option for the long-term viability of production, especially as your business grows and your compressed air needs scale. Renting a compressor might be a good alternative, but this is a temporary solution. It’s kicking the can down the road and not addressing the problem.  

With all the owner’s cost analysis data, you can better see your current costs and accurately evaluate your options. For many companies, the best solution is a managed service like DIRECTAIR®.  


DIRECTAIR® is a managed service that provides your business with a reliable compressed air supply with guaranteed performance. It’s designed around the manufacturer’s needs, using the industry's best air compressors that match your operational requirements. OTC and the DIRECTAIR® team handle all repairs and maintenance, backed by a proactive remote management system.  

You only pay for the compressed air you use, get guaranteed performance, clean, reliable air, and never have to worry about compressed air issues again.  

Every business is different, but for many manufacturers, it makes sense to rely on a compressed air utility service. An owner’s cost analysis provides the data you need to make an informed decision.  

You may have questions about how an analysis might work for you and your operations. Here are some of the factors reviewed when assessing compressed air needs:  

A Closer Look at an Owner’s Cost Analysis 

The air requirements of your operation determine which compressors you can work with. Depending on the size of your business, you might need multiple large compressors. These compressors can be difficult and expensive to maintain, so it’s important to factor in these maintenance and downtime costs when performing a cost analysis. 

How Much Revenue You Lose from Downtime 

If downtime is not a major concern for your company, then you may not need the comprehensive services provided by DIRECTAIR®. However, if downtime poses a significant risk to your bottom line, working with an expert team like OTC will guarantee no downtime and loss of production. 

The Benefit of a Managed Service vs. Ownership 

Buying your compressors outright can lead to long-term savings in exchange for a large initial investment. This may be the most financially viable option, but ownership comes with hidden costs. Maintenance and upkeep costs are some examples, as is maintaining staff to manage the compressed air system. Tracking these costs to compare against the cost of the managed service is covered in the analysis 

Evaluating Your Compressed Air and Manufacturing Needs 

When you work with DIRECTAIR®, you don’t need to worry about surprise costs. We handle the installation, upkeep, and replacement of all your air compressors. Not only do we actively monitor the status of your machines, but our experts are also always standing by to address system concerns before they cause any significant disruptions. 

DIRECTAIR® is just one of the services that OTC provides. To learn about all the other ways that OTC can help, contact us today