One of the best proven tools for measuring the value of a well managed in-service fluids analysis program is by measuring Return on Investment (RoI). This can also be one of the most difficult activities for asset owners to get their head around. Fortunately tools can be applied which will aid in measuring return on investment when partnering with your testing laboratory and establishing goals and measurables toward these goals. One key component of this is to ensure ownership of the service and program, along with good communication with the testing laboratory. This includes both management and operations on the side of the end-user.
Return on investment can come in several forms; optimize equipment uptime, minimize downtime, reduced maintenance cost, resale value, warranty protection, just to name a few. A recent study of data for a major trucking fleet over a period of a year showed an “Estimated Cost Avoidance” of over $800,000 USD over a period of a year. When we talk of Return on Investment many times we are speaking of Cost Avoidance.
Cost Avoidance, or Return on Investment, calculations can include:
- Cost of the testing service
- Failure mitigation costs
- Component failure cost if allowed to run to full failure mode
- Risk avoidance
- Extended equipment life
- Warranty protection
- Resale value
- Business interruption costs
- Frequency of abnormal or severe sample results per asset inventory
As indicated earlier, optimizing Return on Investment requires a level of ownership by someone involved in maintenance or asset reliability on the part of the end-user. But this also involves partnering with your in-service fluids analysis laboratory to define goals and measurables. As Return on Investment is realized, maintenance and reliability practices will naturally evolve:
- from Reactive; fixing the problem after it occurs
- to Predictive; finding a problem early before bigger problems occur
- to Proactive; correcting root cause issues and training to prevent problems from occurring
Predictive and Proactive maintenance and asset reliability practices will allow an operation to realize a measurable Return on Investment through oil analysis. One key factor in this is having the right reporting tools which measure plant-wide asset health or fleet-wide health, and not just reporting on a case by case basis.
Whether an industrial application or a mobile fleet application, ALS Tribology has developed good tools for measuring Return on Investment and means for establishing goals and measureable where we can work with our clients to document and achieve results. Success tends to build upon further success. As data is acquired it becomes easier to track and document Return on Investment. This chart provides a guideline for establishing asset reliability, lubrication optimization, and Return on Investment goals, as well as ongoing management toward those goals.
ALS Tribology’s technical and account service team can provide assistance for establishing measurables and tracking Return on Investment and Asset Reliability Cost avoidance. For further information ALS Tribology can be contacted via email or through one of our regional testing laboratories.
David Doyle, CLS, OMA I, OMA II