Making the business case for precision lubrication

July 30, 2013
Quantify the benefits of a holistic approach to maintenance and reliability.

In brief:

  • When we start to investigate why some plants just don’t make the grade in precision lubrication or any maintenance improvement program, you can really boil it down to three common roadblocks.
  • The pathway to success in lubrication is not much different than any other improvement program within the plant.
  • The most challenging roadblock to launching a successful lubrication program, and perhaps the most important component, is illustrating the financial benefits of a sound lubrication program and gaining management buy-in.

In the past 15 years, I have walked into literally hundreds of plants in North America, and almost all of them had a sign posted at or near the front gate stating some important safety metrics: “235 days without a lost time incident” is the typical verbiage used. I’ve always wondered what prompted the broad marketing of this important statistic. It likely has something to do with the relatively unsafe working environments previous generations were subjected to in plants and the eventual push to improve those conditions so the risk of not making it home for dinner on any given work day was minimized. At this point, I’m sure most plant employees that walk or drive by a sign like this on a daily basis don’t give it much thought since the expectation of a safe working environment is business-as-usual these days.

Have you ever seen a sign that stated “265 Days without a lubrication-related failure”? I have not, but I have often wondered why. I suspect it has a lot to do with the culture that surrounds lubrication and maintenance and the way we typically reward reactive repair work versus proactive prevention work.

For example, a critical machine fails in the middle of the night completely halting production. The on-call mechanic rushes into the plant to find key stakeholders surrounding the machine asking questions.

“When was the last time this was greased?”

“Have we ever changed the filters?”

“Have we not done an oil change recently?”

As you would imagine in a scene from a movie, the crowd standing around the broken machine moves aside as the mechanic approaches with his toolbox in hand. As time slowly passes, the machine fires up and ends the grueling unscheduled downtime and massive production loss.

What happens next is contrary to intuition.

Instead of blaming the mechanic for the lost productivity and poor reliability maintenance, he is credited with rescuing the machine. The mechanic is rewarded with overtime pay, handshakes, pats on the back, and perhaps a day off for such skillful display of his effort. Everyone in the plant is impressed with the safeguards in place to reduce the impact of this kind of failure. In-house stores had plenty of spares in inventory, all the right people had been contacted, and the rescue mission was executed flawlessly.

The failure in this example may have never been fully identified, but the point is, in many cases, lubrication is still a massive unknown, and we tend to ask questions only when a problem presents itself. We rarely credit the positive things we do in lubrication simply because it’s difficult to pinpoint the advantages of single efforts.

Have you ever heard this? — “That machine has never given us a problem in 15 years. I’ll bet it’s because we have applied a holistic approach to precision lubrication and executed on proper storage and handling, or we have a solid oil analysis program and have modified the equipment to have ideal air breathers and oil filtration. Or we’ve also spent time training and educating those responsible for lubrication in the plant.”

I’ve never heard that, but I do know, if all those things had been done, the result is far different than a costly bit of plant downtime.

Roadblocks to improvements

When we start to investigate why some plants just don’t make the grade in precision lubrication or any maintenance improvement program, you can really boil it down to three common roadblocks:

  • lack of understanding
  • fire fighting
  • no management buy-in.

Perhaps the most challenging barrier is the third — lack of management buy-in. But it can be overcome with a financial business case analysis. Once we can see our way through these challenges, we need to sort it all out. We need to decide where to start (Table 1). We obviously want to capitalize on the low-hanging fruit and those items that are going to give us the quickest return on any investment we make, but how do we do it?

Roadblock Solution
Lack of knowledge of understanding of what's possible External Support & Engineered products/solutions
Too busy putting out fires to develop and action plan Project Management Support
Lack of management buy-in to provide funding Develop a Business Case
Table 1. Start improvements with the low-hanging fruit and the items that will give immediate return on investment.

What is poor lubrication?

The pathway to success in lubrication is not much different than any other improvement program within the plant. You need to quantify your current program — whether your lubrication program is formal or informal, sophisticated or simple. Identifying where you are in contrast to where you want to be is the first and most important step, which helps to identify the gaps. The biggest gaps — the gaps that are going to give you the greatest return on investment — are the ones you need to focus on first. In essence, that could become the start of your lubrication program.

With plan in hand, now you can execute it and put precision lubrication into practice.

You’ll first need to make sure everyone is educated to the point they can do the job effectively. Then measuring successes and re-evaluating gaps will help to improve continuously.

When we look to identify gaps in a lubrication program, we focus on 10 key areas:

  • lubricant purchasing, selection, and quality assurance
  • lubricant storage, handling, and dispensing
  • lubricant application practices
  • equipment maintainability and contamination control
  • oil sampling practices
  • oil analysis and basic inspections
  • lubrication PM optimization
  • training and education
  • lubrication scheduling, tracking, and reporting metrics
  • leakage control, safe lubricant handling practices and environmental compliance.

Some of these categories may be more important than others, depending on the type of production facility and equipment within it. However, each area plays a role in our holistic approach to improving lubrication programs.

To know how to identify gaps, it’s important to know what poor lubrication actually is. Many people hear “poor lubrication” and immediately think this term refers to the quality of the lubricant itself, and it can. However, poor lubrication is really an aspect of a lubrication program not done with precision and includes:

  • incorrect amount — too much or too little — of lubricant
  • wrong lubricant type — incorrect viscosity, base oil type, thickener, if applicable, or additives
  • poor storate and handling — outside, not under cover, not climate controlled
  • ineffective dispensing or application — using improper methods and tools
  • inefficient contamination control — inconsistent or non-existent approach
  • unskilled personnel — not trained or educated to what precision lubrication is or why it’s important.

The language of anagement

As mentioned, the most challenging roadblock to launching a successful lubrication program, and perhaps the most important component, is illustrating the financial benefits of a sound lubrication program and gaining management buy-in. However, as the story goes, maintenance people like us have had a difficult time quantifying the benefits of precision lubrication and acquiring the funding we need to build our programs.

Engineers and maintenance professionals tend to talk in highly technical terms. We tend to reference things such as ISO particle count, turbulent sampling zone, NLGI grade and filtration beta ratio. We often try to illustrate the benefits of lubrication program improvements with what we know to be technically true with little regard for the terms that are usually important to executive management. Executive management speaks the language of dollars and cents, not ISO VG68 or NLGI 2. Our job as maintenance professionals is to convert what we know about reliability and lubrication into a language executive managers can understand.

Many studies have concluded, “While the cost of purchasing lubricants typically amounts to less than 1% of a plant's maintenance budget, the downstream effect of poor lubrication can amount to as much as 30% of a plant's total maintenance costs.”

I hear the beginning of this statement a lot and it’s probably true for many companies. Management often feels there’s little or no opportunity to improve the lubrication program because it spends relatively little on lubricants. As this example states, that’s really not the case. The total cost of your lubrication program is the sum of not just the lubricant or the upfront costs, but the ongoing and downstream costs, as well. And that includes the downtime cost that occurs when production equipment unexpectedly breaks down because of spotty maintenance. The sum of all these costs can be significant.

What we really need to do is convert what we know into a cost/benefit analysis where we take a critical and conservative look at the upfront and ongoing costs and attempt to quantify the potential financial impact.

Uncovering the hidden plant

Most companies are losing between 5% and 15% of their annual maintenance budget to poor lubrication. I use a very comprehensive tool to evaluate the current practice and tie it into a cost/benefit analysis. In a recent example for a client, I was able to conclude that this company is losing more than $1.6 million every year due to poor lubrication from an annual maintenance budget of $9 million. Of that $1.6 million in losses, the client figured about 35% of that could be immediately addressed.

After running the calculations, it was easy to see the return on the investment was going to be quite significant. After a $345,000 initial investment to tackle the immediately addressable lubrication losses, and after ongoing costs of about $60,000 per year, the five-year net present value was close to $1.35 million. This is a great investment, and in this case we really are just scratching the surface.

As I presented my findings to the client, I could sense some skepticism. I was asked to show some examples of where, specifically, these losses were coming from. Luckily, I had been able to collect some information from the plant during my walk-through to support the numbers I was presenting.

One of the first things I do when attempting to quantify the financial impact lubrication has on the plant is speak with whomever is responsible for executing the lubrication policy on the plant's most critical equipment. I’ll ask this person to take me to the equipment and explain what they typically do. In this case, the process required that several dust collectors be used to pull the abrasive dust out of the air. If these dust collectors were to go off-line, employees in the plant would need to leave the production area because the air would be unfit to breathe.

The lube tech took me to the 26 dust collectors each with a 250-hp motor directly coupled to a fan shaft sitting on two large pillow-block bearings. I inquired about how much, how often, and what type of grease was being used in the dust collectors. I recorded the current practice and collected data for my own calculations. The end result was that these systems were being largely over-lubricated.

I used the data I collected to understand the financial impact of the current practice in lubrication on these 26 dust collectors. Using the calculated re-lubrication volumes and frequencies on these 26 dust collectors, there would be a savings of $1,747.64 per year. Applying a discount factor of 15% each year on the $1747.64, the NPV over five years would be approximately $5,85. This represents the cost of labor and the cost of the lubricant. The calculations did not account for travel time or damage to the bearing (loss of usefulness) from over-lubrication.

It was also uncovered that the grease selection for the fan bearings was incorrect. A grease with a lower base oil viscosity should have been selected. Perhaps the most interesting discovery in this example was the amount of time that could be redirected to value-added tasks. The practice of over-lubricating these 26 dust collectors accounted for almost 40 hours per year. An entire week of time was spent performing a task that added absolutely no value and in fact was detrimental to the life of the bearings and motors and the overall equipment reliability of these dust collectors. This is a great example of where the hidden plant exists.


Jason Kopschinsky, CMRP, is director of strategic services at Des-Case. Contact him at [email protected].

Almost $925,000 worth of losses were uncovered in just a few examples from data, after being on-site for just a few hours. Not only was there a huge financial implication to doing lubrication poorly, without precision, but there is a resource component as well. As we all try and do more with less, we need to seek out opportunities like this one to uncover time spent on non-value-added tasks and redirect those resources to tasks that truly add value.

A precision lubrication program with its process-oriented steps to identify and then rectify gaps can be vital to the long-term health and performance of a plant or piece of equipment. But once that fact is couched in the language of management, in a way managers can truly understand the cost of not implementing a comprehensive lubrication program, that's when the business case for precision lubrication is truly made and won.

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