5 Tips to Reduce the Total Cost of Your Refractory Installation

Category: Articles
27 October 2014,

If you’re planning the construction of a new industrial facility or maintenance for your existing heat processing equipment, you’re juggling a lot of variables. One of those, which may be near the bottom of your Gantt chart, deserves a deeper look:

Your refractory selection and installation

Why? On the surface, refractory products don’t seem very complex; they’re just products that maintain their strength at high temperatures. But a deeper inspection reveals that there are many variables which determine the best type of refractory to use in a specific installation or application. If something goes wrong, you can end up risking the lives of your workers and incurring significant costs down the road.

So, if you’re focused on having the lowest total cost for your project, you might need to change your thinking. Manufacturers have felt pressure on margins for decades. We understand your need to minimize costs. But refractories are not a commodity, and shouldn’t be evaluated solely on the initial installation price. You’ll receive the lowest total cost by doing the job right the first time, which will minimize future work, downtime and lost production revenue.

How NOT to Approach Your Refractory Bid Evaluation

As an example, we’re often asked to provide a quote for a refractory project with few or no defined parameters or scope of work. The prospect says, “Look at it and give me a price.”

Accordingly, we deliver a proposal that includes all of the recommendations to handle the job properly. The prospect reviews the price, compares it to other proposals that are based on different criteria, incorrectly assumes that an informed decision can be made, and chooses the lowest bid.

In these situations, we commonly hear things like:

  • “Your price was too high. We went with the other bidder.”
  • “There’s no scope of work. Just bid on the way it’s built now.”
  • “We don’t want to review different installation methods. Just get the work done.”

Here’s what actually happened in one of these situations (and this is common):

  • The “other guy” didn’t quote or build the job the same way.
  • The entire lining thickness was installed using a single material – no intermediate and back-up layer. This is why it was cheaper and faster.
  • The prospect didn’t read the quote.

What happened? The decision to go with the other bid and its more limited criteria caused the furnace shell temperatures to go through the roof because there was no insulation. The heat is now deteriorating the steel casing, wearing out the bearings and components on the motors.

How much money did that prospect really save?

“Just Give Me a New Set of Tires”

A comparison we like to use is to think about tires for your car. Tires help get you from point A to point B, and most of us don’t think much about them, unless they fail.

When you need new tires, you have to consider these questions:

  • Any particular manufacturer?
  • What type?
  • What size?
  • How do you drive?
  • Do you want them to be speed-rated? If so, what rating?
  • What is your climate? How does your vehicle perform in wet/wintery conditions?

All of these considerations make a difference in the price.

Approach your refractory selection and installation in the same manner, and you’ll be much better off down the road.

What to Look for in a Refractory Contractor’s Proposal

refractory installationHere are our recommendations to prevent you from ending up in a situation like the one we described earlier.

  1. Do not base your refractory decision solely on price. The “low price” option often produces the highest total cost.
  2. Make sure your bidders have ALL of the facts. That means explaining all the parameters and defining the scope of work clearly.
  3. Many people make the decision based on short-term factors because they won’t be there long enough to deal with the long-term problems from a “low price” decision. Have at least one long-term stakeholder involved in the decision.
  4. You cannot know all of the salient factors relating to refractory and installation. These affect price! Therefore, ask questions so that you better understand the criteria your bidders are using.
  5. If you’re really going to make your final decision based upon price:
  • Take the time to prepare and provide a scope of work.
  • Require that all bids MUST be based upon the same type of refractory with similar properties. Be specific.
  • Make sure that you understand what installation technique is being used.
  • Disclose ALL relevant factors.

Finally, we highly recommend to include somebody with direct refractory experience in the evaluation process.

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