Reducing Your Product Losses

That hissing sound gases make when escaping is the sound “your money” is making when “your gas” escapes back into the air.

Bulk tanksMany times we have asked the question, “How are your product losses?” Many times the answer has been, “Good.” Good is not an answer that indicates you are really monitoring and measuring your losses. The answer must be quantitative, such as, “Argon is 8.2 percent.”

We recommend that you adopt the Philosophy of Lean Thinking: Eliminate the Waste. You need to minimize those losses. Many of you will recognize that hissing sound that gases make when escaping. We recognize it as the sound “your money” is making when “your gas” escapes back into the air. To reduce your losses and minimize the waste, you need to optimize your liquid consumption while operating your various systems.

Tank Optimization
Let’s begin with the size of your tank. If it is too small, you are getting frequent deliveries, and the losses associated with those frequent deliveries are yours. If it is too large, your liquid will begin to warm up and create gas in the tank, and you will vent gas through the safety relief valve when your tank reaches the protected pressure setting.

So it is important that you size your tank for the current volume while looking to the future for a potential increase in volume and thus tank size. While you are examining your tank, it is a good idea to check the vacuum level. If the vacuum on your tank is poor, it will lead to increased tank pressure and the corresponding losses. Once you have optimized your tank size and condition, you need to ensure you are optimizing your deliveries.

Delivery Optimization
Just because you have the optimum tank size does not mean that you will receive the optimum delivery. Your supplier wants to optimize his delivery system and will want to make deliveries to your system when he is in the area and has some product he does not want to haul back to the plant. He may want to use your tank as a “dump tank,” and you will receive smaller deliveries of product than you would want and more deliveries than you need. Remember that there are losses during deliveries, and those losses are yours. The more small deliveries you receive, the more product losses you incur. You need to take charge of your deliveries. If possible, you should schedule them and, at a minimum, you should set the reorder point with your supplier and be certain that it is not making those small deliveries that cost you money. Next you need to optimize your tank operating process.

Operating Optimization
You want to operate your tank at the lowest operating pressure your system allows. Liquid pumps generally like to operate below 70 psig, and higher pressures only create maintenance issues, not operating efficiencies. If you operate your tank at a higher pressure, you only increase the chance that you eventually will exceed the operating pressure of the tank, and the tank will lift the safety relief valve, and gas will escape. Some fill plants’ operating processes include turning on the liquid to the liquid pump in the morning and leaving it cold all day so that the filler can just push a button and the pump starts immediately. While it is a very good idea to cool down your liquid pump before starting it, a period of 15 minutes is generally sufficient.

“Engaging the operators in the loss reduction process begins with training and ends with measurement.”

If the liquid is constantly cooling a non-operating pump, you have a small vaporizer that will just build tank pressure and eventually lead to product losses through the safety relief valve. Schedule your filling and cool down the pump once, if possible, and only use the pressure building system when required. Do not leave it on all the time.

The filling of liquid containers can also be accomplished at these relatively low pressures, and it does not substantially increase filling time. In fact, filling liquid containers at higher pressures actually creates losses because the gas is escaping at a higher rate. Low loss systems that control the outlet pressure with respect to the inlet pressure can reduce your losses during this operation from 25-30 percent to less than 5 percent.

So you have the right size and pressure tank, you are controlling your deliveries, and you are optimizing the operation of your systems. How can you ensure that this will continue to happen—that you will not forget about anything that causes your losses to increase and your money to disappear?

Your supplier wants to optimize his delivery system and will want to make deliveries to your system when he is in the area and has some product he does not want to haul back to the plant. The more small deliveries you receive, the more product losses you incur.

Your Systems
You now need to look at your piping for the product. Avoid 90-degree elbows in your piping, as they create pressure drop that leads operators to want to increase the tank pressure. Look at the piping to your liquid filling and minimize and insulate it. You do not want the ambient heat to increase your filling pressure, as that leads to greater filling losses.

Administrative Losses
No, we are not suggesting that your administrative group is using product. We are referring to the reconciliation of your invoice volume with the delivered volume that you can also measure on a delivery basis by comparing the delivery shipper to your tank readings before and after delivery. It is a good way of monitoring your supplier’s delivery process and to assure that it decreases tank pressure and does not increase it during filling. Use the tank chart to compare to the supplier’s delivered volume and hold it accountable for unreasonable losses. You should have some expectation of losses during a delivery, but delivery losses should not exceed three percent.

Training and Measuring
One of the easiest ways to keep your eye on product losses is to engage your team in tracking and measuring the system and your losses. Begin that process with training related to the aforementioned issues. Start the training with the monitoring of your scheduled deliveries, performing daily tank readings and having everyone pay attention to your operating system. Each day, the operating personnel should be responsible for measuring at least the following:

Tank level at beginning of day Inches
Tank level at end of day Inches
Tank pressure at beginning of day PSIG
Tank pressure at end of day PSIG
Your tank chart will aid you in
calculating your usage.
FT3 Used

Keep the chart in the plant where the operators can be responsible for the measurements and start to develop an understanding of the process. Then use the information from your production report along with the accumulated usage from the daily reporting to calculate your product losses.

Product Produced per
Production Report
FT3 Filled
Used – Produced
Delta / Used

You can really bring home the importance by calculating the monthly losses in terms of dollars lost and posting your results in the work area. Over the years, Lean Thinking has taught us that “What gets measured and displayed is what gets done!”

Benchmarks – Best in Class
If you keep an eye on your losses, you should be able to compete with the best in the industry. Benchmarked best in class have accomplished these levels:

    Product Losses
    Nitrogen < 8% 
    Oxygen < 8% 
    Argon < 3%*
* Assumes a Low Loss Fill System

What you can achieve depends on your product mix (gas, liquid) and your attention to details.

If you are making mini-bulk deliveries, you should have those delivery units filled by your supplier. Only fill them from your tank when other arrangements cannot be made. If you fill them from your tank, you double the delivery losses associated with the product—when your supplier makes the transfer, and again when you make the transfer.

Show Me the Money
How much money is there to save? How much of your money is escaping into the air? Let’s make some assumptions. (See chart at the bottom of this page).

You may use more or less than this example. You may pay more or less than this example. You may already be doing some of these activities, and your losses are smaller. But our guess is that you are not even measuring your losses.

Another statement often heard when discussing the recording of tank pressures and levels and the calculation of losses is, “We used to do that.” Why you stopped doing it is beyond us, but we might guess that it was because the people operating your system were not trained and engaged. Engaging the operators in the loss reduction process begins with training and ends with measurement.

It is your money that is escaping in this process. Training and measuring can reduce these losses and add money to the bottom line. Now there is an idea that should resonate.

Matlock chart

Gases and Welding Distributors Association

Paul Matlock Meet the Author
Paul Matlock is with TAP Resources, Inc., located in Orefield, Pennsylvania, and on the Web at