Your Infrared Program, In-House or Out-Sourced?

We are frequently asked about the comparative costs and benefits of establishing an in-house infrared inspection program versus outsourcing to a consultant. To answer those questions we have put together the most up-to-date costs of initiating an in-house program and an estimated average daily rate for the services of an out-sourced consultant (see attachment A). The comparison is dramatic, and yet even those figures do not tell the whole story.

Cost comparison:

The cost calculation attached shows the initial investment to create a complete program is approximately $185,000 (which includes camera, peripherals, hardware, software, taxes, training, and collateral training costs). The average estimated cost to out-source a consultant is $1,100 per day (including report and travel). (Note: consultants fees are tax exempt.)

Training Requirements:

The American Society for Nondestructive Testing has established guidelines for training and experience which are indicated on the Level I and Level II cost lines of Attachment A. The classroom-training requirement consists of 20 hours of physics, 19 hours of camera operation, and 41 hours of application training. After the required experience has been documented, a thermographer is qualified to provide quantitative analysis of the observed temperature measurements.

Technical Expertise (Use it or lose it):

Each organization considering an infrared program will have to determine how many days per year they expect to have an employee utilizing the camera and associated equipment. This is important not just to calculate when the break-even point will occur in the purchase vs. out-source decision, but also to consider the quality of the program.

Thermographers who are behind the lens of the camera 8 hours a day, every day, keep their skill set tuned, and are adding significantly to their knowledge base each day. The ability to differentiate a true anomaly from, say, a reflection, a normal heating pattern or normal load condition, is critical to save unnecessary repair costs. Likewise, the intuition that comes from greater experience can lead to a thermographer "digging deeper" to find a hidden anomaly that presents only the slightest hint of such at first look through the lens.

Technicians How Many?

Each organization will have to consider how many trained thermographers it requires. The cost estimates provided here include just one trained thermographer. The risk is obvious if an organization only has one qualified thermographer. How long will that person remain in his/her current position, or with the organization? If the financial analyses are based on that one person using the camera full time, then vacation, sick-time and other estimated time off must be factored into the actual number of days the camera will be utilized. If the organization intends to train more than one employee, then those additional training and collateral training costs need to be added to the estimate shown here, and consideration given to how to keep the skills of all thermographers up to date.

Camera Malfunction / Depreciation / Obsolescence:

Each organization will need to consider how it will maintain its infrared program when a camera malfunctions. Should your camera need repair, it is likely that you will be without your camera for a minimum of two weeks. This includes time to ship the camera to the repair facility, diagnose the problem(s), prepare estimate, authorize the PO, make repairs, and ship the camera back. Your organization will similarly be without the camera during annual calibration.

Camera repairs are costly, with a minimum charge of $500 plus shipping if no malfunction is observed at the repair facility. Routine calibration and maintenance is approximately $2,000 (including shipping). Should a detector need to be replaced, your repair bill would probably total $20,000.

The working life of the camera and peripherals will depend on their usage and any subsequent technological developments. The range could be from five to ten years. Repairs required during this period of time cannot be estimated and depend upon usage and conditions of use, handling and storage.

Software Version Updates/Upgrades:

Upgrades to software offered by the camera manufacturers occur at the rate of about one per year. The first upgrade may be included in the cost of the camera, while subsequent upgrades are usually not.

Shifting risk / costs to qualified consultants:

An organization that chooses to out-source its infrared program shifts many of the costs and risks to the consultant. The capital cost is borne by the consultant. The consultant bears the risk and expense of equipment becoming obsolete and requiring replacement, as well as keeping software current. The consultant has the responsibility of arranging for replacement equipment during repairs. The consultant funds the training of the technicians and not only keeps their experience current, but broadens the experience with exposure to varied applications.

Not all infrared consultants offer the same breadth of services, personnel or equipment. See Attachment B "Points to Consider When Choosing an Infrared Consulting Company" for factors to consider to limit your risk and maximize your program if you choose to out-source.

Summary:

An in-house program can make economic sense for a few large or specialized organizations; however, generally an out-sourced program will offer more flexibility and be more cost-effective in both the short and long term.

Cost to Initiate an Internal Infrared Program (Costs accurate as of February 2001)

Item

Cost

Vendor

Comment

Camera

Camera

$49,950

FLIR

ThermaCam PM 695

12 Degree Lens

$5,000

FLIR

Extra Batteries (2 @ $150 ea)

$300

FLIR

Camera comes with 2. Additional 2 gives 8 hrs continuous use.

Extended Warranty

$4,995

FLIR

After initial 1 yr warranty, this extends warranty for12 more months.

Report Software

$6,950

FLIR

ThermaCam Reporter 2000

Report Database

$3,000

FLIR

ThermaCam Data Base

Annual Ins Premium

$150

From your business liability insurance provider

Camera Operation Training

$300

FLIR

1 day on site (cost is estimate)

Tax at 7.8% on above

$5,510

Sub-Total Camera

$76,155

Peripherals

Amp meter, etc.

$500

Fluke

Digital camera

$300

Best

Tax at 7.8% on above

$62

Sub-Total Peripherals

$862

Office Hardware

Pentium Computer

$2,000

Comp USA

Most organizations would already have required computer

Color Printer

$1,000

Comp USA

Many organizations would already have a color printer

CD Burner

$300

Comp USA

Most organizations would probably not have a CD burner

Tax at 7.8% on above

$257

Sub-Total Office Hardware

$3,557

Training

Level I Thermographer

$1,500

AIRT

Tuition only. Level I cert. requires 3 months (530 hrs) exp.

Travel/Meals/Hotel for Level I

$1,400

(assumes Air $700;5 nights Hotel $500;5 days Meals $200)

Level II Thermographer

$1,500

AIRT

Tuition only. Level II cert. requires 18 months (3,168 hours) exp.

Travel/Meals/Hotel for Level II

$1,400

(assumes Air $700;5 nights Hotel $500;5 days Meals $200)

Sub-Total Training

$5,800

Collateral Training Cost

Employee wages Level I class

$600

(Assumes salary of $24,000/yr plus 30% overhead)

Employee wages 530 hrs experience

$7,800

(Assumes salary of $24,000/yr plus 30% overhead)

Employee wages Level II class

$600

(Assumes salary of $24,000/yr plus 30% overhead)

Employee wages 3168 hrs experience

$46,800

(Assumes salary of $24,000/yr plus 30% overhead)

Sub-Total Collateral Training

$55,800

Grand Total Program Start Up Costs

$142,175

Costs to Maintain an Internal Infrared Program (Costs accurate as of February 2001)

Program Maintenance Costs

Annual Camera Calibration

$1,840

FLIR

Calibration and general maintenance, excl tax and shipping

Repair Evaluation

$500

FLIR

Min. charge when no problems can be identified; excl tax, s/h

Repairs charged at $160/hr

FLIR

Detector replacement

$15,000

Excl tax, shipping/handling

Shipping R/T to Flir Service Boston

$100

FLIR

Excl tax,

Camera out of service - lost use

Consultant or Rental

Consultant $1,100/day; Camera rentals are $6,000 per week.

Dedicated thermographer, annual

$31,200

Minimum salary at $24K plus 30% overhead

Software Updates

Annual Insurance premiums

Continuing education

TBD