With power companies under pressure to ensure reliability, one in five incurred costs of over $1 million from unplanned downtime attributed to incorrect equipment lubrication. Power companies are incurring significant costs from errors in equipment lubrication, according to a study by Shell Lubricants1.
Companies admit that around six in ten incidences of unplanned downtime in the last three years were likely due to their incorrect selection or management of lubricants. This is having a financial impact – 26% of companies estimate that these shutdowns cost their business at least $250,000 and one in five (18%) state that costs have exceeded $1 million.
The international study of power companies across Asia, Europe and the Americas commissioned by Shell Lubricants reveals that companies are underestimating the potential cost savings and productivity gains from effective equipment lubrication.
Many companies do not realise that lubrication can significantly influence equipment reliability, with 60% of companies stating they wouldn’t expect higher quality lubricants to result in a reduction in unplanned downtime.
Marcelo Goldberg, Shell Global Sector Manager for Power, said: “In power, every day is critical. When people flick a switch, they expect the power to be there instantly. This places power companies under immense pressure to ensure reliable, efficient operations and avoid costly unplanned downtime. However, companies tend to underestimate the potential impact of equipment lubrication, often due to a lack of understanding. Shell Lubricants has a team of technical experts who work closely with customers to help ensure they select the right lubricants and, importantly, manage them correctly. In doing so, we have delivered millions of dollars of savings2.”
Two of the major barriers preventing companies from maximising the cost-saving potential of their lubrication procedures are insufficient employee expertise and a lack of process. 59% of those surveyed think they don’t conduct staff training on lubricants as regularly as they should, and only 43% of companies have all the correct procedures in place to manage lubricants effectively3.
Misunderstandings around lubricants are also evident. Only half of companies (52%) understand how lubrication management can help reduce maintenance costs, and 41% understand how lubricants can deliver cost savings through improved wear protection.
Marcelo Goldberg commented; “Companies do recognise the potential for savings, but underestimate the opportunity. While 58% of companies recognise that selecting the right lubricant could reduce costs by 5% or more4, only 1 in 4 think that savings could exceed 10%. But with a gap in staff expertise on lubrication, and only 25% of businesses making use of regular visits from their lubricant supplier’s technical staff, most are not well equipped to take action. One of the services our technical experts offer is to work with customers to help coach their staff in effective lubrication management procedures.”
Shell Lubricants has released a whitepaper to address some of these issues and show the tangible business benefits that can be achieved through correct selection and management of lubricants.
1. This survey, commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence, is based on 212 interviews with Power sector staff who purchase, influence the purchase or use lubricants / greases as part of their job across 8 countries (Brazil, Canada, China, Germany, India, Russia, UK, US) from November to December 2015.
2. Documented savings delivered to Shell Lubricants customers from 2011-2015.
3. Shell recommended lubrication management procedures included: Delivery and storage of lubricants and/or greases, Oil change procedures, Oil dispensing systems, Efficient grease lubrication systems, Oil analysis, Training employees in lubricant selection and/or management.
4. Costs include maintenance, labour, fuel.