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October 2003

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Lubrication Institute

What is most misunderstood and costly to your operation?

Lubricants and Lubrication!

By: John H. Marino
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Do you know that your equipment produces a profit on a thin film called lubricant? The most important but yet the most mismanaged in 99% of all companies is lubricants and/or lubrication. That�s why, it has been reported, that 60% to 70% of all mechanical failures are due to inadequate lubricants and lubrication practices.

Savings of millions of dollars per year is possible through reduction in lubricants costs of 48% to 74%. Sounds incredible? Yes, but it�s absolutely true. These are documented figures from companies that knew their lubricant costs were excessive but had no idea of the magnitude or what to do about it. To accomplish vital cost reductions on lubricants a company must develop a firm and well thought out strategy on the purchase of lubricants. Significant cost reductions are possible. The key is acquiring the knowledge about the product and consolidation.

Some of the more common reasons why controls are lost include: salesmanship by the vendor, convenience, brand loyalty, purchasing authority at multiple locations and (of major consequences) the lack of lubricant knowledge. Look at your purchasing records. How many brands of lubricants does your company currently have?

The single most important tool in reducing lubricant costs and keeping them in line is up to date lubricant specifications. In our daily lives we use specifications such as purchasing vehicles, clothing or food. Why don�t we use specifications for purchasing lubricants? Meaningful specifications can be written which allow the purchase of a product that has multi-purpose and multi-use capabilities. For example, a lubricant or lubricants, which are usable in both gasoline and diesel engines. A helpful hint: use lubricating greases that are all in the same family to avoid incompatibility and misapplication. Another action that can reduce lubricant inventory is a thorough study of application needs. This is an important by-product of the specifications writing process.

Since sales information concerning lubricants can be confusing, how does one go about making the correct lubricants choice? The only sure way is to have a clear set of rules and definitions (specifications). These specifications should originate from the engineering department working in unison with the purchasing department. Generalized specifications such as supplier�s brief catalogue descriptions have very little, if any value. Overly stringent specifications make it difficult to obtain bids while increasing a lubricants price dramatically. Detailed and meaningful specifications are needed for several reasons:

1.To minimize the number of lubricants used

2.To purchase the required ones at the correct prices

This enables the material management and/or purchasing personnel to have definite guidelines that can be presented to a greater number of suppliers who will want to bid on the requirements. Having other vendors bid on lubricant brands presently being used can be disastrous due to the fact that there is a good possibility that these lubricants may not be correct for the applications because of �hand me downs.� Lubricants and lubrication is still the primary method of preventative maintenance and specification bidding allows a company to make a selection � not only on price � but on the ability of the vendor to provide full service as well.

Remember that in today�s streamlined company profiles, there is usually no place for a well-qualified Lubricant Engineer. This function has often been reassigned to someone in sales or purchasing as a sideline to his/her primary responsibilities. Once the desired specifications are in place, they become like a road map for all personnel involved in keeping your company�s equipment operating profitably. Since lubricant technology is constantly changing, all lubricant specification needs and pricing must be reviewed annually. The following points should definitely be taken into consideration when selecting and purchasing lubricants:

  • Training � Promotes teamwork that allows personnel to attain desired results.
  • Certification � Identifying services by passing a written exam for a certifier in the field of lubricants and lubrication.
  • Meaningful lubricants specifications detailed to meet your needs.
  • Beware of materials placed in lubricants for demonstration purposes that are of no value and increase your costs.
  • Significance of lubricants test date and terminology.
  • Cost effective package selection.
    • Are certain size containers really needed?
    • Who pays for the decorated package?
    • What about bulk?
  • "Just in time" buying, including:
    • Supplier�s location to needed destination.
    • Inventory control � keeping it to a workable minimum.
    • Services to expect from lubricant suppliers (is price the only thing?).
    • Are we using the correct lubricant on the various applications?

Applying these criteria allows you to recognize the real costs of various lubricants. This provides you with a judgmental position to obtain the best price while allowing your supplier a reasonable profit and the ability to provide your company with efficient service. Getting the most out of a companies lubricating dollar is, in reality, a team effort. The end user must have the input into the process and the purchasing arm of the company must see that their communication with the supplier achieves that goal in order to have any chance for lubrication success.

One of our clients clearly states the above objective:

"The responsibility for establishing specifications for material and equipment rest with department requiring the item to be purchased. The specifications must be prepared in a manner that foster competitive bidding and must clearly define the necessary performance, service and delivery requirements".

Fulfilling the growing needs of companies who no longer have a Lubrication Engineer or who know they need expertise is a responsibility that can be filled by Lubrication Institute in order to reduce your company�s costs.

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John H. Marino is President and founder of Lubrication Institute, LLC which has its offices in Overland Park, Kansas. He has had 43 plus years experience in the lubricant business and has seen the incredible impact lubrication can have on a company�s profit margin. His international firm specializes in lubricants and lubrication training, cost control, usage, inventory and storage of greases and oils, plus offers guidance to individual lubricant needs, such as formulation, manufacturing, equipment design and testing, and serves as an expert witness. He has formulated over 250,000 different types of lubricants. Marino�s knowledge of lubricants dates back to his positions as Research Chemist, Plant Manager, Vice President of Research and Development, and President at Southwest Grease and Oil of Kansas City, which was the world�s largest independent manufacturer of lubricants. Marino�s reputation as an expert on lubricants is known throughout the industry. He is frequently a speaker at corporate and technical meetings and has written numerous articles. His educational lubricant courses have been widely received by many Fortune 500 companies each year. Lubrication Institute is unique and successful because they do not sell or recommend lubricants by brand name.

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