Process Skid Cost and Lead Times

Process Skids: Cost and Lead Time Factors

Process skid cost and lead times are driven by many variable factors. Comprehensive front-end planning and hiring a reliable process skid manufacturer are pivotal keys for achieving an optimal outcome when buying a new modular process skid system. Understanding the project management steps allows for better planning, budgeting, and timeline management. Here are the primary influences, organized by category:

Factors Affecting Cost

Design Complexity & Customization

Highly complex or custom modular process skid designs require more engineering hours and specialized design. Compared to standardized designs, customization can increase costs. An upside is that many customizations deliver better performance and reliability. The upside? A slightly higher initial cost can lead to increased production and fewer downtime issues.

Material Selection & Component Quality

Premium or specialized materials (such as high-grade stainless steel or specific alloys) and brand-name components substantially increase costs. Compliance with specific certifications (ASME, cGMP, UL, etc.) may require higher-cost materials and manufacturing processes. A full-service process skid manufacturer can work closely with you to define the performance specifications. From there, the manufacturer can take the lead in sourcing the appropriate components.

Project Size & Scale

Larger, more intricate systems with greater capacity are naturally more expensive due to the increased amount of materials, components, and labor required.

Automation & Technology Integration

Integrating advanced process controls, automation, and instrumentation for Industry 4.0 compatibility increases both hardware and design costs.

Regulatory & Compliance Requirements

Projects requiring extensive documentation, traceability, or compliance with international or sector-specific standards typically incur higher costs for validation and certification.

Production Location & Labor Rates

Costs vary depending on the region of fabrication and the skill level required for production. Manufacturing costs in the Southern United States are generally lower than in other parts of the USA. Foreign manufacturing may offer lower system costs. However, shipping and tariffs (and delays) make foreign outsourcing impractical.

Factors Influencing Lead Times

Supplier Lead Times & Component Availability

Delays in acquiring long-lead or specialty components (like unique pumps, valves, or controls) can lengthen production timelines. Leveraging domestic supplier relationships for timely procurement is an advantage Arcadia Equipment utilizes for every project.

Shipping delays can occur when working with foreign manufacturers. Global supply chain disruptions or shortages can further extend lead times. While Canadian and European suppliers are more reliable than Asian manufacturers, foreign procurement can have drawbacks.

Recent articles by Freightos highlight current shipping challenges due to geo-political conflicts. Other challenges are a shortage of shipping containers and a need to reroute shipments to avoid known dangerous shipping routes¹.

Design and Engineering Changes

Iterative changes or scope creep during design can lengthen project schedules. Clear initial specifications help avoid unnecessary delays. This is an area where a highly-experienced process skid manufacturer can help you avoid common problems. An experienced process skid system designer can often identify potential issues before they arise.

Project Complexity

More complex or highly customized skids demand longer engineering, fabrication, testing, and integration periods. Again, a manufacturer experienced in your industry provides you with a wealth of acquired knowledge. The design team’s experience assures the creation of an optimal design for your specific needs.

Shop Capacity & Scheduling

If the manufacturer’s fabrication shop is at capacity, projects may wait in a queue, extending lead times. Discussing lead times, requirements, and capabilities enables both parties to have reasonable expectations.

Quality Control & Factory Testing

Rigorous internal quality controls and in-house inspections add a little extra time but are a hallmark of a top manufacturer. Finding and resolving any issues before shipping helps the customer and the manufacturer.

Logistics & Transportation

Transportation considerations and the distance to the site directly impact delivery times. As a USA manufacturer, Arcadia Equipment has virtually no challenges shipping within the USA. Any challenges in foreign outbound shipping are the same as those any other manufacturer faces.

External Factors

Weather events, regulatory approval processes, and other unforeseen factors often contribute to unplanned schedule extensions. While these circumstances are rarely a concern, things such as wildfires, floods, hurricanes, and blizzards can impact shipping. As for oversized loads, Arcadia Equipment uses top trucking companies. These trucking companies can provide escorts and use DOT-approved routes to avoid clearance issues.

Tips for Managing Cost & Lead Time

Early Standardization

Using standardized module designs and clear performance specifications (not rigid component lists) can enable skid manufacturers to offer lower costs and quicker delivery. Per the AG5 website, "Standardization is an approach to production that ensures consistency in manufacturing processes – and, as a result, finished products. A standardized approach to manufacturing often involves adhering to industry standards and certification requirements set by a third party, such as those developed by ISO."²

Modular Design: Parallel Fabrication & Site Prep

Modularization allows off-site skid fabrication simultaneous to on-site prep-work, shortening overall project timelines. As the system designer, Arcadia Equipment can provide on-site contractors with information on power needs, etc.

Strong Supplier Relationships

Established supplier networks and local sourcing can bypass the impact of material shortages and shipping delays. Arcadia Equipment has long-term working relationships with top manufacturers for valves, pumps, meters, electronic components, and more. With long-standing primary and secondary suppliers, the timely procurement of quality components is not a problem.

Clear Project Scope

Defining the project scope and specifications early reduces the risk of costly changes later in the process. Arcadia Equipment offers comprehensive process skid consulting, design, and fabrication services.

In summary, customization, component choices, automation, supply chain reliability, and project management are critical project elements. These elements are the principal drivers of both cost and production schedules for process skids. Collaborative planning and modular standardization are effective strategies for optimizing both cost and timing for process skid systems.