6 Major Cost Impacts of Hydraulic Leaks

Ricky Smith, Noria Corporation

A single hydraulic leak of one drop per second is equal to 420 gallons of oil in a 12-month period. But the costs associated with hydraulic leaks are much greater than the cost of the hydraulic oil itself.

 

Inefficient machinery operation

  • Poor Overall Equipment Effectiveness (30-50%) is common. Often hydraulic leaks are the cause.
  • Potential Cost: As high as $500,000 a day (varies by industry and number of hydraulic assets)

 

Premature machine component failure

  • 80% of equipment stoppages and component failures are caused by contaminated lubricants. Dust, dirt, water and chemicals often enter through leaks, causing increased wear, adhesion, fatigue and corrosion.
  • Potential Cost: Average — $76,000 - $100,000 per year (assuming 10% - 20% of equipment is hydraulic)

 

Poor manufacturing quality

  • Much hydraulic machinery is controlled by electrohydraulic servo-valves that are extremely sensitive to contaminants in the hydraulic fluid. Any significant contamination via leaks will directly affect the quality of manufacture.
  • Potential Cost: $2 Million per year to revise or discard products (at 4% scrap and rework rates with sales of $50MM/year) (Reference 1)

 

Increased capital costs

  • The life cycle of equipment can be extended significantly if leaks are detected and managed quickly.
  • Potential Cost: Hose Replacement: $250 & 1 work hour. Piston Pump Replacement: $3,000 & 8 work hours (assuming parts are already on hand)

 

Environmental damage

  • A portion of leaked fluid ends up in ground water, rivers, lakes, and in the soil itself, causing impacting the environment in ways that should be avoided.
  • Potential Cost: $100 per roll absorbent material + EPA fines based on oil volume and negligence (Reference 2)

 

Increased accident liability

  • A machine operator or technician slips and falls because of leaking hydraulic oil, costing on average $200.00 per incident in lost wages alone. Costs to the employer can be much higher.
  • Potential Cost: Workers compensation costs, medical costs, production interruptions and lawsuit-associated costs.

Source: machinerylubrication.com/Read/21/hydraulic-system-leakage

References

  1. https://www.toolingu.com/images/pdf/ToolingU-SME-Manufacturing-Insights-Report.pdf
  2. https://www.epa.gov/newsreleases/epa-settlements-improve-compliance-oil-spill-laws-companies-connecticut-and-maine

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About the Author
Ricky has over 30 years’ experience working as Maintenance and Reliability Professional for companies such as Exxon Company USA, Alumax Mt Holly, Kendall Company and the US Army. In addi...