Can You Afford All the Oil and Grease You Use?

Noria Corporation

Can You Afford All the Oil and Grease You Use? - image showing oil in a reservoir ready to be changed.

One of the most common lubrication mistakes that plants around the world make every day is disregarding the costly impact of changing oil too frequently and over-greasing. When oil changes are optimized to the right intervals (or you find a way to stop changing oil altogether), many plants find that equipment reliability increases, which frees up maintenance budgets to tackle other issues.

Overgreasing can waste grease, but it is actually the waste of time involved in overgreasing that has the most significant cost impact.

Let’s look at an example of a plant where excessive oil changes and overgreasing account for losses of nearly $300,000 over five years.

Understanding the Benefits and Costs

A tool we can use to find financial opportunities in lubrication is a cost-benefit analysis. Figure 1 explores cost-benefit analysis for a plant as it relates to lubrication excellence. As discussed in this article, there are two areas of fiscal opportunity in most plants with regard to lubrication excellence. The first and most obvious is to try to reduce unscheduled downtime. Some portion of these unscheduled events can be attributed to poor contamination control or lubrication practices. Another area of opportunity is in right-sizing the lubrication PM tasks. When evaluated on a benefit-per-cost basis, approximately half of all planned maintenance activities have no value.

Even though a cost-benefit analysis with input from several parties may illustrate that there is a significant fiscal opportunity and that a lubrication excellence program should provide a solid return on investment, many managers continue to be skeptical of the real value. Experience shows that poor lube practices will cost most industrial facilities approximately 8% to 15% of their annual maintenance budget. So, from where does this opportunity come?

Image showing cost benefit breakdown for an industrial plant's maintenance and reliability concerns related to lubrication

 

Figure 1. Lubrication Excellence Cost Benefit Analysis

Finding the Right Oil Change Frequency

Like machines themselves, machine oil degrades over time. For that reason, all oil needs to be changed eventually—unless you have a high-tech way to effectively combat oil oxidation.

For the rest of us, oil changes are still a common reality in cars and industrial machines alike. While we sometimes forget to change the oil in our cars, our machines are often on a schedule of oil changes based on a fixed time interval. While certainly better than not changing the oil at all, time-based oil changes are often wasting perfectly good oil and incurring unnecessary labor.

And it isn’t just the cost of the new oil to be concerned about. The resources that are involved in changing industrial oil may surprise you when you account for all of them. Especially in plants where uptime, reliability and lowering maintenance costs are the keys to continued success.

Hydraulic fluid and lubricants can have a very long service life (longer than 12 months) when the oil is kept clean, cool and dry. I suspect the lubricant in most sumps is replaced prematurely and simple activities such as the installation of hybrid-style breathers would help to extend the oil’s life. A combination of appropriate breathers and good storage and handling practices could extend the oil life to 18 or 24 months.

Are Time-Based Oil Changes Costing You?

To evaluate the cost of time-based oil changes, understand the apparent and non-apparent costs. For a typical one-gallon sump, I list costs based on information I receive from the plant and estimates based on industry knowledge. A conservative cost of $54.55 can be applied to each gallon oil change in the plant.

Data suggests that this plant is spending approximately $73,400 per year based on annual oil changes on systems that use the most common lubricants (when you account for apparent and non-apparent oil change costs). Appropriate storage and handling, contamination control and condition-based oil changes could extend some drains to 24 months or more. Extending drain intervals to 24 months from 12 months would effectively redirect $73,000 annually in maintenance costs from non-value-added tasks to tasks that are worthwhile (Figure 2).

The five-year net present value (NPV) of the savings from eliminating this non-value-added task calculated with a 10 percent discount rate totals more than $276,670.

Thinking Beyond Oil Changes

Some plants have found other ways to solve the problem of associated labor and cost of oil changes by stopping them altogether.

New forms of oil regeneration systems that remove even the nano-scale oxidation particles from oil and radically extend its service life are already in use among many precision metalworking plants. This is necessary for those who depend on high volumes of reliable, clean oil lubricating their machines.

Combining these technologies with new ways of doing business like performance-based contracts can actually offer a way for plants to essentially pay for lubrication-enabled reliability in the form of a service solution.

Because this also removes the need for extensive storage and handling of incoming oil, the associated savings in time, materials and labor can be significant. The best option for your plant depends on how much oil you use, and other cost/benefit factors related to your own oil cleanliness and reliability targets, But innovators in this area will find significant savings under the right conditions.

Breakdown of oil change costs for a hypothetical industiral plant

Figure 2.

Overspending by Overgreasing

Overgreasing is another major area where simple changes could have large impact on reducing cost and increasing reliability.

It’s really amazing to walk through a plant with fresh eyes, free from tunnel vision, and really see which lubrication practices are costing the plant huge losses and adding no value. Overgreasing is a big problem in most facilities, but have you ever considered the real cost? I always ask clients to take me to one of their most critical machines in the plant. I’ll then query the lube technician on lubrication practices, such as how much, how often and what type. Take, for example, one plant’s most critical machine, which has no redundancy. If this machine fails, the plant must halt all production until the machine gets fixed. This is not an overly complex machine, and the critical components are two fairly large bearings with a rotational speed of approximately 600 rpm. I collected lubricant type and the current volume and frequency of relubrication. I then compared this to the calculated values and illustrated the difference. (Figure 3).

Breakdown of different lubrication frequencies applied to different products such as bearings or an electric motor

Figure 3.

The numbers speak for themselves. The difference on an annual basis is $942.03 (Figure 4).

 Cost breakdown for grease quantities at different change frequencies

Figure  4.

Perhaps the biggest apparent benefit to adopting the calculated volumes is the savings in time for the lube tech. In this single example, the tech stands to save almost eight hours per year from just this one machine, which he can redirect to more value-added activities such as oil sampling, top-ups, inspections, using a filter cart for periodic decontamination, and others. Also, the not-so-apparent benefit here is the improved reliability of the machine through calculated lubrication. This is more quantified over time with extended machine life.

You Can Achieve Savings

With a few simple examples and very real numbers to back them up, it is clear that significant savings are possible. Whether your plant could benefit from better lubrication practices or even a radically different “Oil as a Service” model, keep in mind that no account has been made for improved equipment reliability or reduced downtime costs. For most plants, that is likely the most significant savings of all.

For the example plant in this article, these two specific activities: oil changes and overgreasing, account for a loss of almost $300,000 over five years. This is almost three times the cost of implementing a well-designed lubrication program.

Remember, if you need help understanding your facility’s cost improvement opportunities when it comes to lubrication, world-class Noria experts are always available.

 

References
Ken Brown, Utility Service Associates, “The Hidden Cost of Oil Changes”. Practicing Oil Analysis magazine. May 1999.

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