How to Show the Value of a Lubrication Program

Joe Anderson, Reliability X

To sell an organization on the value a lubrication program can offer, it is important to translate the program into true value. However, you first must define what value is. According to Merriam-Webster’s dictionary, value is “the monetary worth of something: market price; a fair return or equivalent in goods, services or money for something exchanged; relative worth, utility or importance.”

Value shown by a lubrication program can take on many forms. Most of these can be tied back to monetary value. See Jim Fitch’s “5 Ways to Monetize Lubrication Excellence Now” article. The focus of this article will be on capturing and showing this value in the form of savings and avoidances.

Before you can show the value of your program and share it with others, a few factors within your facility must be understood. The first relates to the costs. Schedule a meeting with your finance department to learn the costs associated with maintenance cost per unit, cost of goods sold (and how it is calculated), total cost to produce, annual electrical costs, cost per kilowatt-hour, and total labor cost per hour by line. This is a good place to start.

Next, try to understand how the finance department calculates these items and ask how savings are quantified. Every department is different when it comes to capturing savings. Some only want to see cost savings, while others accept cost savings and avoidances.

Capturing Savings or Showing Value

Perform an amp draw before and after a lubrication-related issue has been corrected. Start with a pilot project. As you receive the results, expand the solution. Remember to capture data from these machines both before and after proper lubrication practices have been implemented. This can add up to significant savings if tracked correctly. See the example on the right.

You can eliminate some labor requirements by utilizing automatic lubrication systems and single-point lubricators. Focus these resources in other areas to allow you to get more work completed within the facility.

Reliable Plant Conference

Asset life extension has savings associated with it as well. When you extend asset life, you minimize downtime, gain throughput, lower costs, etc. To extend the life of your assets, establish a best-practice oil cleanliness level. Also, use precision lubrication with ultrasound and install breathers on gearboxes, blowers, etc.


Example of the savings that can be
achieved when good lubrication practices are implemented

Share the Value You Have Captured

There are three types of value on which you should focus: convenience, process improvement and financial value.

Convenience

Convenience is sold through a demonstrated or statistical approach to prove that a plant will be safer and produce higher quality product, which in turn creates less work and rework. Becoming more efficient means less hard work, while lower costs offer a marketing advantage, which translates to job security. Fewer or no environmental incidents will lead to greater job security as well. However, the greatest benefit is empowering workers to do what they know to do by providing the proper tools and removing any obstacles. This improves the quality of life at work and at home. Waking up and wanting to go to work in the morning is a good place to be.

Process Improvement

Process improvement is sold through less downtime, which translates to running to plan. This will make the production manager look like a superhero. Asset utilization improves capacity, which means more volume, more profit and more recognition. Also, less downtime results in less frustration, which raises morale and helps to drive the culture change. This is seen as success in your peers’ eyes. It decreases their stress level as well.

Financial Value

Financial value is sold through freeing up cash flow, reduced costs and higher profit gains, all of which translates into higher stock value and more capital for reinvestment into the company. You can begin by announcing to the plant that you are starting your campaign. Then, capture as many cost savings and avoidances as possible. Share your findings with the world. Get creative. You might create a newsletter and share your “value of the week.” Send it to everyone in the company. Be sure to verify the costs with your plant’s financial expert before publishing it.

If you follow this advice, you will start to change the perception of the lubrication program within your facility and begin to develop the much-needed credibility to be seen as the subject-matter expert you were hired to be.

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