The difficulty in translating the technical benefits into cost benefits is the need to determine improvements in a tangible way, such as the life extension and improved reliability resulting in greater availability of plant. Noria uses its Life Extension Factor (LEF) table based on research and documented case studies to apply a potential life gain. The LEF is a conservative number so that it does not generate ambitious results.
However, before presenting the benefits to management, it is necessary to be armed with as much supporting evidence as possible, which will mean reviewing case studies from other businesses. The typical source would be conference material and magazine articles and a search of the internet will turn up excellent reference material.
Having researched the case histories, it may be necessary to implement a small trial to prove a point and this can often be done on a low-key investment level with a supplier to prove a point relevant to the site.
Finally, once the goals of the programme are properly considered, and a plan of action has been built, then the real effort begins with the translation of the technical benefits into cost benefits.
The best way to do this is to work with the accountants to ascertain all the cost factors associated with the business of operating and maintaining a machine. It is also sensible to include company officials responsible for health and safety as well as for environmental care. The reason for this is that the new maintenance practices will offer a safer way of work with less risk of environmental damage.
The real benefits, however, are in the reduced downtime, and life extension of the components; filters, oils, pumps, valves, seals, etc. Therefore, apart from the obvious capital and maintenance cost reductions, there will be hidden cost reduction and potential ‘soft’ benefits.
To determine the benefits in life extension, it will be necessary to measure the current levels of cleanliness based on the ISO 4406 solid particle code.
There are several ways to then calculate the cost benefits.
First, users could determine how much more life they wish to get out of their equipment and work backward to the cleanliness targets necessary to achieve that. Noria’s Life Extension Factor table estimates the increase in service life of a cleaner system.
The LEF table covers a number of machines from rotating equipment to transmissions, hydraulics and engines. Current levels of cleanliness run on one axis, proposed cleanliness levels on the other. In the box where they meet, the table gives the Life Extension Factor. The table was created from field and laboratory research based on the life of systems run at differing levels of cleanliness. However, this approach risks setting a target LEF that is too
high to be financially feasible.
Second, users could develop their cleanliness targets based on considering the risks of failure, and the risks that failure poses to the system. Noria has developed a Reliability Penalty Factor for the first parameter, and a Contaminant Severity Factor for the second. By consulting a third table that compares these two factors, users can estimate a more realistic cleanliness target, and, by consulting the LEF table, estimate what machine life extension they might expect.
This second method is a longer approach, but does take into account the safety, productivity and cost issues of the machine when setting the RPF, and considers the complexity of the machine and the impact of the environment in contamination terms when setting the CSF. The real benefit of this method is that it allows a user to set a site-specific optimum cleanliness target, and thus what may be an acceptable target level for a system in a clean environment may be unacceptable for the identical system in a dirty environment.
Obviously, with many cranes operating outdoors, the target cleanliness levels will generally be tighter than the averaged recommended targets set by the OEM.
Third, users could follow the guidelines set out by filter manufacturers or the various fluid power associations which offer a procedure to determine the needs of the machine. This process is somewhat similar to that outlined in the previous method and again usually offers more realistic targets. However, it focuses particularly on the machine filtration needs rather than the overall lubrication management approach to contamination control starting in the storeroom.
Set target cleanliness levelsSetting target cleanliness levels is subjective since no two sites are the same. Nor are industries typical in which
a crane may operate. In the end, it is the user that pays the cost of maintenance, not the OEM or component supplier, so setting a target is the responsibility of the user. Guideline numbers are acceptable in so far as they are to be seen a starting point. The method outlined above offers the user a means of determining a more appropriate guide based on their unique scenario. Fine tuning and resetting the targets may be required as historical data is gathered.
The second stage of applying a proactive maintenance regime after setting the targets – namely achieving the contamination control – was widely discussed in the second article (CT Nov pp37-9). The third stage is monitoring to ensure the balance is right and the targets are being met.
Contamination monitoring should include the ISO 4406 particle count where possible, along with moisture target levels. This can be achieved online with small units that are relatively cost effective, or with portable instruments used on a number of machines, or by sending samples to the laboratory. There are advantages and disadvantages to each of these, but it will depend largely on cost versus ease of on-site analysis.
So, the cost summation of contamination control in all the three steps outlined above will include determining the benefits of the targets in realising life extension and improved reliability, against the cost of implementing a control programme and monitoring its success. In the case studies in which I have been involved, the typical payback period of such proposals are usually under six months. The amount of investment is usually directly proportional to the effort needed to achieve the targets, but then so are the benefits.
To get the most from the asset, it makes sense to pay the supplier to properly build the machine to the highest possible specification for contamination control. A figure used by accountants to monitor the health of the business is to look at the return on net assets (RONA), which is the revenue generated by the asset less the expenses of running the asset, divided by the value of the asset. Retrofitting upgraded contamination control systems will add to the net asset value, thus reducing the RONA result. By paying the OEM, this minimises the net asset value.
Maintenance costs reducedAn example of this is provided in a case study by Ross Mackay (‘Current Best Reliability and Maintenance Practices
of Pumps and Pump Systems,’ Results Oriented Reliability Maintenance Conference. Raleigh, N.C. November 2002). Mackay reported that investing
an additional $500 over the normal price of $6,000 in better lubrication and contamination control on a process pump achieved a reduction of $10,000
in overall maintenance costs over a five year period compared to the costs of the normal pumps. There was a further $1,000 saving in energy costs.
At the Port of Tacoma, Washington, USA, a programme to improve the engine filtration of dockside straddle carriers was expected to extend engine life by three times. The benefit was as follows:
Net present value = $702,391Internal rate of return = 662
%Discounted payback = 2.04 months
The amazing aspect of this was that the cost of implementing the filters on all the units was an initial $31,500 with an attendant additional spend on filters annually at $2,310.
Even though the maintenance department was aware of the benefits of better contamination control, it took a life extension factor to enable the management to approve the maintenance upgrade. In November 1998, Jim Harris and Nick Nesland, Sr, published a case study in Practicing Oil Analysis Magazine called ‘Effective Fluid Management Delivers Big Time at the Port of Tacoma’.
It asserted that, while the project was still in early the stages, oil and engine life had already been increased by more than 200%. Of course, apart from the savings on oil changes and engine rebuilds, there are savings from the oil analysis and inspection procedures, too.
A properly structured cost benefit analysis will convince management of the need to invest in contamination control for a proven payback. The sources of the benefits are direct in so far as the life extension and reliability improvements are seen. But the benefits are also indirect in so far as the health and safety and environmental impacts.
