Manufacturing companies are underestimating the potential cost savings and equipment productivity gains from effective lubrication, according to a study by Shell Lubricants[1]. Many businesses do not realise that some of the critical factors influencing productivity and profitability, including equipment reliability and downtime, can be significantly influenced by lubrication processes. For the industry in North America alone, getting this right could mean potential savings in excess of $38 million[2].
Incorrect selection or management of lubricants
Companies estimate that 70% of their unplanned equipment shutdowns in the last three years were due to their incorrect selection or management of lubricants. This is having a financial impact, at a time when manufacturers are focused on competing for new growth by increasing productivity[3]. One in five (20%) estimate incurring costs of over $250,000 as a result of these shutdowns.
Yin Jie, Shell Global Sector Manager for General Manufacturing, said: “The impact of lubrication on productivity and maintenance costs is often underestimated. This is not just about selecting the right lubricants, but ensuring they are properly applied and managed. In doing so, we have delivered $139 million in savings to customers worldwide over the last five years[4].”
International study of manufacturing companies
The international study of manufacturing companies across Asia, Europe and the Americas commissioned by Shell Lubricants reveals a lack of understanding about how effective lubrication can impact equipment productivity and Total Cost of Ownership (TCO)[5]. More than half of manufacturing companies surveyed admit they are unclear about how lubrication management can influence unplanned down time (57%), and 46% don’t expect lubrication to help lower maintenance costs. With a gap in staff expertise on lubrication, and only 34% of businesses benefiting from regular visits from their lubricant supplier’s technical staff, most are not well equipped to take action. Only 42% of companies have all the correct procedures in place to manage lubricants effectively[6] and 63% think they don’t conduct staff training on lubricants as regularly as they should.
[1] This survey, commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence, is based on 493 interviews with Manufacturing 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. For more information, please visit www.edelmanintelligence.com
[2] Based on savings delivered to Shell Lubricants customers from 2011-2015
[3] KPMG 2016 Global Manufacturing Outlook
[4] Documented customer savings from 2011 to 2015. More information available upon request
[5] Total Cost of Ownership (TCO) is defined by Shell Lubricants as the total amount spent on industrial equipment, including cost of acquisition and operation over its entire working life, including costs of lost production during equipment downtime
[6] Shell-recommended lubrication management procedures include: 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
