Purchase vs. Outsource: When Outsourcing Air Compressor Services Might Be the Better Option

When deciding how to meet compressed air needs, capital purchase is the most common approach. But while the up-front purchase gives you ownership of an asset, sometimes a capital lease is attractive if capital is tight or you want to spend the money as you accrue the benefit (compressed air). A third, but far less commonly considered option, is outsourcing compressed air as a service. This course of action may offer greater flexibility, cost efficiency, and reduced management responsibilities. The best option depends on your production patterns, budget, and in-house maintenance and administrative human resources.

1. Cost Alignment with Production
   One major advantage of outsourcing air compressor services is that costs can be more closely aligned with your actual production time. When you purchase a compressor, you face a large upfront cost along with ongoing maintenance and repair expenses, regardless of how much you use the equipment. Outsourcing, on the other hand, adjusts to your production schedule, meaning costs fluctuate depending on how much your compressor runs. This can be beneficial if your production levels (and consumption of compressed air) vary throughout the year. Keep in mind, however, that while outsourcing may align with your production time, costs may vary compared to the fixed costs of ownership (except for your power costs, which will be the same).
2. Reduced Maintenance and Administrative Responsibilities
   Owning an air compressor requires time and resources for maintenance, repairs, and monitoring. These responsibilities can place a burden on your staff, especially if your business lacks a dedicated maintenance team. In most outsourcing agreements, the service provider assumes all responsibility for service tasks and costs, ensuring that your compressor is well-maintained and operates efficiently. This not only reduces downtime but also frees up your team to focus on core business activities rather than equipment management.
3. Access to Advanced Technology
   When you buy a compressor, you’re committing to a piece of equipment that will depreciate over time. As technology evolves, you may find that your equipment becomes outdated and less reliable, requiring costly upgrades or replacements. Outsourcing gives you access to the latest advancements without the need for capital investment. This is especially important if your business relies on current compressed air technology to maintain efficiency or meet specific production requirements. Outsourcing ensures you always have access to modern, efficient equipment..
4. Scalability and Flexibility
   Purchasing a compressor locks you into a specific capacity that might not suit your future needs. If your production demands increase or decrease, adjusting your air supply can be costly and time-consuming. Outsourcing offers the flexibility to scale your compressor capacity up or down as your production changes, without the need for capital investment. This adaptability is particularly useful for businesses with seasonal production cycles, temporary projects, or evolving air requirements.
5. No Capital Expenditure
   Purchasing a compressor requires a significant upfront capital investment, along with potential costs for installation. Outsourcing eliminates these initial expenses, allowing businesses to preserve capital for other priorities. For companies looking to reduce upfront costs and maintain operational flexibility, outsourcing can be a cost-effective alternative to ownership.

Outsourcing air compressor services can be particularly beneficial in situations such as: 

• When production levels fluctuate, and compressed air is not needed continuously. 
• When you want to avoid the maintenance and repair responsibilities that come with owning equipment. 
• When you're uncertain about your long-term air requirements and don’t want to make a large capital investment. 
• When your business requires access to the latest technology without the cost and effort of new capital purchases. 
• When you need the flexibility to adjust compressor size based on shifting production needs.

For businesses looking to outsource their compressed air services, Kaeser’s KAirFree program offers a comprehensive solution. Rather than purchasing a compressor, KAirFree provides access to the equipment along with maintenance, remote monitoring, and repairs. The cost structure is based on the compressor’s run time, allowing for flexibility that aligns with your production needs. KAirFree also allows you to adjust compressor size if your requirements change, making it an ideal choice for businesses seeking scalability and reduced management responsibilities.

Deciding between purchasing an air compressor and outsourcing your compressed air services depends on your business’s production cycles, long-term plans, and desire for flexibility. While purchasing may be the best choice for businesses with stable, long-term air needs and the ability to manage maintenance in-house, outsourcing can offer reduced costs, less administrative burden, and the flexibility to adapt to changing production demands. Outsourcing can also provide access to the latest technology without the hassle of equipment ownership, making it a smart choice for many businesses looking to optimize efficiency and control costs.

• Learn more about the KAirFree program
• Blog: Your eyes are often bigger than your stomach