Cost Savings through Oil Analysis
Monitoring your critical equipment with oil analysis results in significant maintenance cost savings. This is never more apparent when a catastrophic failure is averted by advance warning, thereby buying time to rectify or prepare for the impending problem. The cost to benefit ratio in these situations can be dramatic. There are other ways an oil analysis program can save you money:
- Reduced Oil changes (Reduced disposal costs)
- Better lubrication control and management (less waste and incorrect application)
- Increased equipment life
An oil analysis program, properly implemented and adhered to, will not only reduce your maintenance costs for unplanned downtime, but pay for itself as well. This payback is often demonstrated within the first year of a program, particularly with reduced lubricant purchasing and preventive maintenance scheduling. The following case study is designed to illustrate cost savings from an oil analysis program.
The following case study details a actual plant savings analysis for a current BTS customer.
The customer began monitoring their critical equipment in 1993 with BTS. The facility, a petrochemical plant, is a world class producer of polyethylene and polypropylene. Critical equipment in such facilities are the extruder gearboxes, which regulate the speed and control of the extruder screws used in resin pellet production. These gearboxes tend to be large and complex. The customer has 6 of these gearboxes, (german made), each with large capacity lubricant reservoirs. The equipment manufacturer suggested a bi-annual oil change for each unit. The customer followed the manufacturers’ advice, but was concerned at the downtime involved during change out. Draining the oil from the boxes is a tedious process, as there is many internal cavities which need to be flushed out. In addition to this, Bringing the units on line again involves purging the screw and pelletizer of product and a slow ramp up to operating temperature. In total, this lubricant change out could take between 12 and 24 hours to complete. Downtime and lost production was very high, to the point of being unacceptable due to the very tight profit margins in the plastics business.
A decision was made to change from a PM (preventative maintenance) schedule to a condition based maintenance approach, with oil analysis as the primary technology for determining if the oil needed change out.
Results
The results were quite dramatic. Firstly, the estimated costs of performing an oil change were recorded. The direct costs for each gearbox were estimated to be:
Location: Resin Plant
Equipment: Extruder gearbox
Reservoir Capacity: 380 gallons
OEM Suggested Preventative Maintenance Schedule: Change out oil every 6 months
Oil Cost : $4.00/gal
Change out time: 12 hours
Labor Cost: $50 per hour
Waste disposal: $0.20/gal
| Cost Factor | Quantity | Cost ($) | Ext Cost |
| Oil | 380 | 4.00 | 1520.00 |
| Labora | 12 | 100.00 | 1200.00 |
| Filter Cost | 1 | 50.00 | 50.00 |
| Waste disposal | 380 | .20 | 76.00 |
| Total Cost | $28.46 |
a: Labor rates based on two technicians at $50.00 per hour
No calculations were made for indirect costs such as loss of production while unit is undergoing an oil change. The customer started to use oil analysis, and based on the results, would make a decision on changing out the oil. Oil analysis results indicated no problems, and in particular, the lubricant was clean and within specification guidelines. The filters were changed out whenever the oil analysis indicated increasing contamination, usually twice a year. Calculating the savings of extending drain intervals involved factoring in the cost of oil analysis on the gearbox (quarterly frequency), and the bi-annual filter change out. The service costs were annualized, and the savings based on the existing preventive maintenance schedule.
| 6 month charge | 12 month charge | 18 month charge | 24 month charge | |
| Annualized Service Cost 1 | $5692 | $2846 | $2134 | $1423 |
| Oil analysis Cost 2 | $0 | $120 | $180 | $240 |
| Filter change Cost 3 | $0 | $100 | $150 | $200 |
| Total Cost | $5692 | $3066 | $2464 | $1863 |
| Savings | $2626 | $3228 | $3829 |
1: Service cost is annualized, i.e. there are two changes per year when using the 6 month cycle.
2: No oil analysis was performed initally when changeouts occurred every six months. Extending the change interval was possible by performing oil analysis on a quarterly basis. This charge will be extra.
3: Oil Filters were changed out every six months to ensure cleanliness.
Conclusions
Some interesting observations were made. Firstly, significant savings can be made in the first year of the program, by calculating the cost savings of extending the drain interval. The lubricant costs, though significant in this instance are often minor compared to labor and downtime. A good oil analysis program, designed with the proper tests, will detect any abnormal wear in the oil wetted path far in advance of other predictive maintenance methods, and the savings in reducing oil changes alone will allow the user to achieve real savings with minimum investment.