Considering Your Lubricants As Part Of The Bigger Picture
Kathy | August 1, 2007
Proper lubricant selection and management is one of the greatest challenges facing any fast-paced process or manufacturing operation these days. Thus, it’s more critical than ever for end-users to think of lubricants as “investments” in reliability and efficiency—not as “commodities.”
“Excellence” is key
Lubricant performance can vary greatly between competing mineral and competing synthetic oils. Because these quality differences directly and significantly impact the ultimate cost of operating and maintaining a plant’s rotating equipment, lubricant purchases cannot be effectively managed as a commodity. Lubricant “excellence” is what must be purchased—always. That’s because even the most effective lubricant management practices cannot impart properties to a lubricant that it doesn’t possess.
Upgrading to proven, advanced lubricant technology produces cost savings that routinely exceed the total cost of the product. The following example illustrates how substantial the typical savings can be compared to lubricants that simply meet the equipment manufacturer’s recommendations.
Calculating the payback
Let’s look at the operating costs for plant with 36,000 electrically driven horsepower (HP), operating 8000 hours per year at a $0.05 kW/hr power cost. Given annual energy costs of $12 million and annual rotating equipment maintenance costs of $3 million (which includes $90,000 in lubrication expense), lubricant purchases are only 3% of the maintenance costs and only ¾% of the energy costs. Though conceptually accurate, expense ratios will vary from plant to plant.
Historical data supports that upgrading a broad population of equipment to advanced high film strength lubricants can be expected to produce energy savings greater than 3% while reducing the need for equipment repair by at least 30%. Furthermore, though superior lubricants cost more per gallon, the annual cost for lubricants changes little due to greatly extended drain intervals and the elimination of oil changes associated with equipment repairs.
To put the return-on-oil investment into perspective, this example calculates the annual total savings from upgrade efforts to be $1,260,000. That includes:
- Annual return on oil investment of 1400%
- 90-day ROI based on energy savings
- 37-day ROI based on maintenance savings
- 26-day ROI based on combined energy and maintenance savings
- Annual Energy Savings of $10.00 per HP
- Annual Maintenance Savings of $25.00 per HP
- Even a total elimination of current lubricant costs would produce insignificant savings compared to the savings routinely attained from upgrading lubricants.
- A BASF model estimates that for each dollar saved in maintenance, $3.00 to $7.00 in economic benefits accrue to other areas via improved quality, inventory reductions, energy savings, safety and increased uptime. For this example, that amounts to $2.7 million to $6.3 million.
Most cost savings initiatives intended to reduce maintenance costs and improve rotating equipment reliability are very time-and-peopleintensive. At Royal Purple, we know that it is very common for a company to achieve significant improvements and cost savings by simply replacing a product that it already buys and uses. It doesn’t get any easier than this.