6 Major Cost Impacts of Hydraulic Leaks

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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