Maintaining a TCO approach

Manufacturers may be able to reduce their total costs through better lubrication practices, as Castrol Industrial explains

Many manufacturers now focus on Total Cost of Ownership to help them sustain competitive advantage.

This approach filters through to the way they identify and approach suppliers and partners.

Total Cost of Ownership (TCO) is the approach that Castrol Industrial has adopted for many years to help customers improve their maintenance and production activities.

When considering Total Cost of Ownership, manufacturers review and assess the direct and indirect costs and benefits of the materials they purchase. This includes initial outlay, for example the unit price of products and the volume purchased (direct costs) and indirect costs affected by product use (wear rate, safety risks, maintenance, etc).

The price of a lubrication programme is often a small portion of the total cost of ownership.Maintenance lubricants generally account for about 3% of total maintenance costs but can have a much greater impact on the overall maintenance and production budget due to the value they create upstream and downstream. Costs are calculated by understanding both the purchase cost and the costs associated with further use, maintenance and disposal of the products, as well as any savings that are generated in production activities.

It's a complex activity to do a detailed study of the total cost of ownership on every lubricant used within a manufacturing plant, particularly when there are hundreds if not thousands of line items. Castrol focuses on key operations and application hot spots where it has experience and knowledge of improving TCO.

The success of Castrol's offers relies on the company being able to validate and prove the benefit they deliver. This requires a detailed study of the application, and an understanding of the total costs involved.

Case studies In steel production, the hot rolling process operates under heavy loads and extreme temperatures. One manufacturer was experiencing excessive levels of grease consumption on work rolls and vertical sliding surfaces, which meant the frequency of re-lubrication was high. All lubrication was done manually and the maintenance costs were significant. Production also had to be stopped frequently for maintenance to take place. Castrol worked with the customer using the Total Cost of Ownership (TCO) principle. Detailed analysis of the work rolls and related areas identified that the grease being used didn't give the necessary performance required for the work rolls application, causing problems of bearing corrosion due to water ingress.

Castrol-selected Molub-Alloy 860 ES with its high performance additives as it is resistant to water washout and can withstand the high pressures and loads experienced in a hot mill. The lubrication interval increased by more than 100% and grease consumption reduced by more than 70%. This gave an overall TCO saving in maintenance and grease costs of 24%. Other benefits such as lower waste disposal costs and increased uptime have not been quantified but have been realised by this manufacturer.

Equipment downtime reduction is a key performance indicator in any manufacturing business. One manufacturer within the automotive industry was experiencing spindle failures on a manufacturing line, a key bottleneck process, which resulted in costly downtime and replacements. This operation employs hydrostatic bearings and in one year there were five failures which resulted in production downtime and repair work costing £50,000. Castrol conducted a detailed survey of the lubrication application and identified that the oil condition and lubrication regime was one of the key factors leading to failure. A replacement product was selected, supported by the Castrol Predict service which provides analytical trends and highlights abnormalities in the oil. This supports a predictive maintenance strategy to ensure equipment wear is reduced and uptime maximised.

A spokesman at the site says: "The Castrol programme has been very effective and we recognise that value can be derived from the new lubrication programme and the Castrol Predict service. Since its introduction five years ago, there has been a 96% reduction in bearing failures and we are now planning to extend the Castrol service to other key manufacturing process equipment on site to help us reduce our total costs and reduce failure rates".

Potential advantages claimed by Castrol for the TCO approach when used correctly and in the right circumstances include: Increased component life and help in reducing stock levels which may improve working capital Reduced maintenance labour Reduced energy costs; some of Castrol's high performance gear oils, such as the Castrol Tribol 1100 range reduce friction and wear which can result in a lower energy use Benefits on the waste bill when longer life lubricants are used; these extend relubrication cycles and lead to a further reduction of costs.