Achieving optimum benefit from lubrication and maximizing equipment uptime is more than just the correct lube application and monitoring. While these are essential components, getting the correct lubricant is the first step.
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This is not always as simple as it sounds because of multiple vendors, sole sourcing or variable and/or qualitative purchasing decisions. It can also be exacerbated by a lack of understanding of the application and/or the significance of any changes to a lubricant.
Even lubricants by the same name and from the same supplier can undergo formulation changes or changes in the place they're manufactured. Normally, this goes unnoticed with the recent proliferation of mergers, acquisitions and product dropping.
These guidelines were developed to help determine how to improve the lubricant purchasing process. They can also be used to help identify areas that could benefit from change.
1. First, are purchase specifications available for the products? This is important because over the life of a product, many aspects can change including production procedures, packaging, basestocks and formulations. Consequently, if the application is important to production and/or the consequences can be safety-related, it might be prudent to at least quantify what is currently being used and to know what works.
Existing specifications and standards may be suitable for most products. This is a benefit because they have the advantage of being reviewed and time-tested. They can be industry-related, such as those prepared by a major steel company or electric utility, military or standards-writing bodies such as ASTM, ISO, IEC or DIN.
1a. If existing standards are available, when were they last updated? If it has been longer than five years, there could be cause for concern. If updated internally or by just one company ensure that they were updated by technically competent people. Ensure specific products that might have been changed but are working satisfactorily are not excluded. This can occur when a specification is based on an earlier formulation of a product. Suppliers should also be given the opportunity to comment on and/or offer substitutions.
1b. If specifications don't exist, why not? A valid reason should be available. One such reason could be that the product is a well-known brand name, there are no known problems, or the supplier has excellent quality assurance and a proven track record. But how do you know that none of the above will change before the next review?
1c. Before approval for general use, new products should be evaluated in service for at least 12 months with protocols suitable for the application. This will help minimize surprises because unique or unexpected events may occur. Having an effective approval process will also help foster better appreciation of the lubricants and discourage lube tinkering. As a recommendation, try the product in a few applications before making wholesale changes. This can help minimize the consequences if there are problems. Generally a year is long enough.
2. Is the price the only purchase consideration?
2a. If the answer is yes, also consider pricing supplier services such as technical support, training, testing and quality assurance. In addition, include costs for maintenance requirements, handling, service life and eventual disposal, because these costs should be considered as essential parts of any lube decision.
2b. If the answer is no, is there a formal life cycle costing approach? Must it be followed in every case? What are the exceptions, are they valid and when was the costing last updated?
3. Are the products purchased individually? Are they sole sourced? Are tenders required for small orders, or are they part of multiyear agreements? All of these factors have pros and cons to take into account. Consideration should also be given to periodic and random testing of products.
In addition, new drums of lubricants should be routinely sampled to ensure the correct products have been shipped. This helps in setting benchmarks for condition monitoring and for staving off potential problems. This applies to products in storage to verify their shelf life has not been exceeded. In this regard, all drums, kegs, pails and grease cartridges should have a date. This can be date of manufacture, the purchase date, the received date or any other significant date.
Note: On a related matter, regularly check how the lubricants are being stored. Grease cartridges should generally be stored with the open end up for obvious greases; this prevents oil seepage. Drums having desiccant and filtered breathers can be stored upright. Other drums should be stored on their sides with the bungs holes at three o'clock and nine o'clock. However, most facilities apparently do not store them this way likely because of leakage concerns. Plastic drum covers are also available for a few dollars, and can save many times that amount.
4. When was the last time the lubricants in use were properly reviewed? Many changes have been made to the formulations in the types of products available. Care should be taken not to overly reduce the number of products because specialty products serve a particular purpose.
Be careful when aftermarket additives are used. They can be detrimental to the equipment, or they may not be compatible with the lubricant and/or can result in higher disposal charges. If extra performance is required, consider fully formulated products with a heavier duty or a different additive package.
5. Is there a staff expert for lubricants? With so many new developments, it may be cost-effective to have at least one person to whom questions can be addressed. This can take years to develop; therefore, the responsibility should remain in place. Training two or more is a better idea, allowing them to alternate attending conferences or education courses. Upon their participation in conferences and training, these lubricant experts should share their new knowledge with staff, circulating the material of new ideas and key contacts.
Do employees stay in contact with the suppliers or technical staff? This could be a concern if questions are not asked and no feedback is provided. It is helpful to prepare a contact list at each supplier for technical matters. Buyers should not be the default contact.
5a. If employees are in contact with the suppliers, what specific training has been offered in the plant in the past year? This includes classroom settings, attendance at conferences or providing papers or presentations to be reviewed. Most oil companies have quality technical material and can provide some training. Numerous trade publications on lubricants and technical societies are available, such as the STLE that offers periodicals and technical meetings. Encourage technical discussions with your main lube supplier once a year. Just talking about engine oils is productive because there's always something new.
6. Is there a working feedback system to identify and correct problems?
6a. If there is, has purchasing received any input since the last order? If not, why?
7. Is lubricant consumption tracked to identify whether it is too high or low? If not, why? This can also be an important aspect of due diligence in case of a leak or spill.
8. Are the lubricants in-use properly tested to determine if the useful service life has been optimized? Is this part of the proactive maintenance process?
9. Have energy-saving lubricants been included? Have contacts been established with the local electric utility or government officials about programs with industry experts? If they cost more, who pays? This can be a significant disincentive if maintenance pays, but some other department gets the benefit. Proper cost allocations are important.
10. Is there any incentive to use better products or to benchmark performance? Is it working? If not, why not?
Pros
Fewer Suppliers: There might be fewer companies listed as suppliers. However, with electronic data storage and possible electronic billing, this might be less important. Many sole-sourcing efforts are supply-driven for this reason rather than technical advantages.
Fewer Products: Product consolidation can be achieved even with numerous suppliers. Reviewing the products used and their applications is a key first step. This is usually associated with a tender submission for sole sourcing.
Easier Tech Support: Dealing with one company, you are more likely to have only one technical contact. This simplifies determining who to call.
Improved Compatibility: Products from one company are more likely to be compatible with one another in case of mixing by mistake. However, this will not help if the wrong oil was used.
Better Training: When a supply company knows what to expect in revenues, it can more easily account for providing seminars. These can be offered in-house, at regional centers, at a company's main office or another suitable location. Tours of laboratories and production facilities can also be informative. Training can also include newsletters or electronic mailings.
Better Trouble-shooting: With a given revenue stream, suppliers can often provide some degree of analysis as part of trouble-shooting efforts. In most cases, Because the supplier is most familiar with their product, they could know if similar problems had developed at other customer sites. This is assuming that they will share this information.
More Secure Delivery: Using one company to supply all products also implies that it is large enough to have all products. It is likely that the supplier has the needed products available somewhere.
Health and Safety or Environmental Issues: Having one supplier should mean greater uniformity to the material safety data sheets (MSDS). If issues do arise, you'll likely get the appropriate assistance.
Cons
Compromises Must Be Made: No one supplier has the best products for all applications. Consequently, testing may be required before specific products are deemed equivalent or suitable. Obtain claims in writing for each substitution.
More Complicated Trending: Upon selecting a new vendor, or at least the first time you choose a sole source of lubricants, changing oils with different additives and basestocks will compromise the historical condition-monitoring test data. It is important to keep accurate records of the makeup oil being used, how much is added and when.
Inertia: Having a contract with one company adds internal pressures to remain with that company. Consequently, it will be more difficult for stations to take advantage of new technology or to adopt new practices offered through other companies. Sole sourcing can also discourage the use of local suppliers.
Higher Risk: If the company being used undergoes a large organizational change, product reformulations, has a fire or equipment failure that impacts production, or has a key facility damaged by severe weather, then the user can be stuck. Similarly, if a generic problem occurs, it could have greater implications affecting all stations.
Fewer Technical Support Options: If it is possible to purchase lubricants from more than one supplier, then one can shop around for the best technical advice and testing knowledge. However, when locked into a single company, it is expected that free technical assistance will be harder to obtain.
Compatibility: When switching oils or greases, this initially adds a risk of incompatibility or performance degradation. Prior laboratory testing can help reduce the risk, but it will always be an issue. This is because it is generally too expensive to conduct all the tests in every ratio. Even if this was possible, lab tests do not always duplicate the field applications. If substituting, do not switch products in all similar units at the same time; rather try one for approximately a year and monitor the performance.
Approvals: It is not sufficient for lubricants that are mixed or substituted be viewed as equivalent and compatible. In some cases, the lubricants should have original equipment manufacturer (OEM) approval. For pumps and motors, these requirements are often general; however they are specific for gas turbines. Consider that some equipment uses premium products for reasons other than what can be found in the books. Examples include the advantages of severely hydrotreated oils due to lower cloud points that may reduce plugging of filters on cold starts.
Perceptions: Condoning the practice of mixing oils and greases will necessitate greater education and safeguards for those cases in which it is not all right to mix or use a different product. Examples include environmentally qualified equipment located in nuclear plants, and safety components and equipment with safety, regulatory or licensing implications. Prior testing with an approval process and adequate documentation is required.
Reliability: Even if a sole source and a tendering process are utilized, it cannot be assumed that current main suppliers will be the suppliers in the future. This can have major implications for safety-related equipment, compromising the applicability of the reliability data to date.
Contact Duration: Tender contracts are established for set periods of time, which must last long enough to ensure the costs of the periodic tendering process do not exceed the savings. In addition, the term must be long enough for benefits or harm to be discovered, but not long enough that new requirements cannot be implemented or the supplier becomes complacent. It is a trade-off and should be set with care.
Further Testing: One cannot assume that problems will be evident because many difficulties remain hidden. Consequently, there should be a formalized data gathering and test program to determine if products are working as intended.
Verification: Part of the tender process may include oil testing by the vendor, which is not as desirable as on-site sampling and testing. The test data must be made available to the stations in an electronic form. Therefore, if the vendor changes with a future contract, the data can still be trended. This requires conversion software for each site and duplicate testing at each change to determine if correction factors are required for tests performed at different labs. Testing of samples taken on-site is important for tanker deliveries because contamination can occur during delivery.
Adequate Testing: In a tendering process based on the lowest cost, extra performance measures ensure delivery of what has been agreed upon. Depending on the ISO series of standards, this is not sufficient because it says little about whether the product works, only how it is made. Because there are likely no standards for most existing lubricants, considerable work is required to develop yardsticks. At the least, take initial benchmark samples for all of the products.
Complete Drains: When lubricants are mixed, it is not known how they will interact, making it difficult to identify the root cause of problems. Consequently, there is a greater tendency to drain all of the old oil first or to clean out old grease. Considerable costs are associated with this including labor, dose, new oil, solvents and disposal. Because the total cost of changing oil is estimated to be about five times the cost of the new oil, any short-term benefit of a slightly lower purchase price is negated. Most oils have service lives longer than the one to three-year terms of many contracts; therefore oil consumption could rise considerably.
"Freebies": These are not free, but the specific services that are added benefits as part of a sole-source contract must be determined. For example, major oil companies have provided, at no charge, some or all of the following: lube surveys, technical material, periodic mailings, seminars, trouble-shooting and testing. Unfortunately because of reorganizations and personnel changes at user locations, it is unlikely that a single individual is responsible for lubricants. Even though these services might not have been used for the last few years, it does not mean they are not currently available.
A variation is to arrange for one or just a few supply houses to provide all the lubricants. This has the above advantages for supply of one billing contact, but adds a layer for technical support. The pros and cons can vary greatly depending on the efficiency of your contact person.
The cost of the equipment, downtime and equipment maintenance far exceeds the purchase price of lubricants. Consequently, while there are benefits in streamlining the purchase process, care must be taken to guarantee the equipment is not compromised and that the costs are less. Greater benefits might be accomplished by ensuring the required lubricants are used correctly and are achieving their maximum life.
Regarding dollar values, the cost of the lubricant is usually many times less than the consequential cost if problems were to occur. Even minor problems such as filter plugging, cloudiness or other nonfatal consequences have implications. A filter change takes time and money. Additive interactions, at the least, means that some additives considered necessary have been depleted.
One must be aware that the lubricant is working but also know what is required to keep it working and how to test it if something goes wrong. A large power station might spend $100,000 on lubricants per year, but a single unit downtime can cost more than that in a single day or less.
Therefore, do not consider only the cost of the lubes, but all other aspects associated with getting the right lubricant into the right application for the longest time with minimum problems and for the lowest overall cost.
When equipment or a component fails or must be downrated, a single occurrence may be devastating. However, the cause of the failure should be identified and corrected because it will likely be necessary to prevent it from recurring or creating more severe consequential damage.
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This has many approaches, including root cause analysis, and may include the formation of teams involving maintenance, engineering, operations and suppliers. It may also be beneficial to invite third parties for direct involvement or for initial input or an appraisal to help guide future efforts. A second opinion on the cause and the need for rectification can also be helpful.
Choose a lube or bearing or seal supply company that is able to provide services to assist with determining the root cause of problems - one who works with the customer to determine an effective course of action. This also applies to the examination of used parts, such as bearings and filters, to determine if they provide any information on developing problems or optimizing maintenance. Services may include:
Initial survey to gather information on the problem.
Review of technical data and communication with other users, suppliers and/or manufacturers. Typed records will be prepared if necessary.
Visit to the site to meet the customer and to examine the equipment and/or parts and technical data.
Follow-up by and/or fax with appropriate suppliers.
Determining what is required or performing additional testing as agreed with the customer, such as fluid analysis, metallurgical examinations, stress analysis, vibration analysis, bearing load-carrying analysis, etc.
Preparing a short report containing technical data, photographs, discussion and recommendations as required. A draft will be sent to the customer for comment before the final report is issued.
Optional: Working with the client to implement any recommendations, to arrange training or to participate in any further efforts to resolve the matter.
Follow-up after a set period of time to clarify any recommendations and to obtain feedback.
The above work typically takes only one or two days, particularly if the plant is nearby, and verbal recommendations can often be given the same day. Completion of the final report depends on the effort required, but should be finished within 30 days. Thanks to digital cameras, it is easy to include photos, which can be extremely valuable. Preset dollar limits are the norm.
If it's running, it's wearing. If it's not running, it's probably worn.
Result 1: If not the above then it may be on standby in case something else wears out.
Result 2: If the equipment is not economical to run, this is likely due to a loss of efficiency as a result of wear.
Selecting the right supplier capable of meeting unique business demands and application needs is a crucial process for any company. The types of suppliers today span a large spectrum of business models. Some offer product only, while others bundle in additional services and capabilities. Understanding exactly what products and services a business requires is critical to the supplier selection process.
The same philosophy can be used when selecting the ideal lubricant supplier. Factors such as price, services offered, reliability, quality, and technical expertise – among others – must be understood by key stakeholders at each company. Those factors must be prioritized to fit the needs of the business. While there are many criteria to consider, most can be narrowed down to a few major categories for evaluation purposes.
There are five key areas (categories) of criteria to understand and evaluate during the lubricant supplier selection process. The five areas to focus on are: Application Expertise, Diverse Chemistry, Supply Reliance, Risk Abatement, and Ability to Serve. Each area addresses selection criteria that should be fully understood and agreed upon by those key stakeholders at each company.
Application Expertise
Every application has its own criteria to carefully consider, and therefore the demands placed on the lubricant are just as unique. A hydraulic fluid requires physical properties and performance specs different than that of a compressor lubricant used in a refrigeration application. Intimate knowledge of the system itself – the type of engine or compressor and system components, the working conditions of the system, metallurgy & tribology aspects, and other important details – is critical to recommending the proper lubricant.
Many companies require numerous lubricant recommendations for different applications/processes spanning several geographical regions, or even concentrated at one large manufacturing site. They should consider seeking out a lubricant supplier with proven knowledge and expertise across a number of industries and market segments. Some applications are so unique they are served by lubricant suppliers with niche expertise in that particular application. In cases such as these, partnering with the most experienced provider can help to ensure the best possible lubricant recommendations.
However, having one “single source” provider of lubricants for multiple applications is ideal and carries many benefits. Reducing the number of vendors a company has to interact with can help minimize complexity. There may also be cost benefits offered by lubricant suppliers when multiple products and/or services are contracted. Additionally, one single-source provider may be able to identify other opportunities across the site or throughout regional locations for better lubricant recommendations. This could further minimize complexity, realize cost benefits, increase efficiency, or all of the above.
How challenging is the application? Are the working conditions severe? Is the system working in operating conditions involving extreme temperature ranges, challenging environmental aspects, or any other number of factors? If the answer is ‘yes’ then contracting a lubricant supplier qualified to solve those challenges is necessary. Not all suppliers are created equal. Many good suppliers do not have the technical expertise, problem-solving acumen, or leveraged resources capable of tackling complex application challenges. When applications are known to have recurring challenges or harsh operating conditions, supplier evaluation must include the capabilities to solve these unique problems.
Diverse Chemistry
A considerable number of compressor systems and operating equipment components are capable of using different base oil/additive chemistries to meet the requirements of the application. Depending on the exact requirements and operating conditions, several formulations can “get the job done”. The differences lie in the expected performance (driven by base oil used) and additional features provided (by utilizing additives). For example, some low-cost mineral oils are good options for certain applications, whereas semi-synthetic lubricants may boast longer life with less potential for oil loss. A supplier with a diverse chemistry portfolio can make a holistic recommendation based on chemistry, cost, and performance to offer the best solution for the application.
Many suppliers leverage strong technical resources supported by highly skilled employees, state-of-the-art equipment and facilities dedicated to research and testing. Suppliers with strong technical support coupled with a diverse chemistry toolbox can offer several advantages:
Companies must determine for themselves how important it is to select a lubricant supplier with a diverse chemistry toolbox. Some may not require a supplier that offers multiple solutions. A company may simply desire reliable supply of a suitable lubricant option for their application at an acceptable price point. The key takeaway is this: Understand exactly what capabilities a lubricant supplier must have with respect to offering diverse chemistry options and formulation expertise. Every company is unique and must match a supplier’s strengths with their most critical lubrication needs.
Supply Reliance
Supplier selection must include evaluating the strength of their supply chain to effectively provide goods and services. Solid supply chain management can result in competitive advantages passed from the supplier on to the customer. Conversely, poor management of supply chain can hinder a company’s ability to compete or much worse. Channel partners, such as lubricant distributors, may not be able to meet end-use customer demands if their suppliers falter. Supply interruptions can cause ripple effects that result in additional downtime, leading to lost production, culminating in decreased revenue opportunities.
Larger companies, such as original equipment manufacturers (OEMs), require significant volumes of lubricant supply to maintain production across their manufacturing facilities. They should research and investigate how potential suppliers leverage their available supply of base oils, additives and other key components to lubricant manufacturing. Identifying potential risks such as shortages is crucial to avoid future delays or shut-downs in their production schedules. Lost production can be costly to OEMs – in some extreme cases it could result in losing hundreds of thousands of dollars a day. Of course, there is a limit as to how much a lubricant supplier is willing to discuss their strategy, as much of their contractual agreements are sensitive and/or protected. However, a broader view of their supply capabilities, in addition to volume assurances, need to be understood and agreed upon by both parties.
Companies that conduct business on a global scale must also consider the size and scope of their supplier’s geographic supply chain footprint. Those operating on a smaller regional scale (such as the East Coast of the United States) may not be as concerned if their supplier has manufacturing and warehouse facilities in North America, France and China. Securing stable supply from a distribution channel somewhere in say, Indiana or Pennsylvania, is more of a concern for them.
Logistic And Transport Concept In Front[/caption]On the other hand, those organizations conducting global operations would be concerned whether or not a supplier had strategic manufacturing, blending, and warehouse locations in the Americas, EMEA, Asia Pacific and elsewhere around the globe. A straightforward benefit of a globally leveraged supplier includes product(s) available at multiple locations to satisfy customer demands. There are other benefits to consider that could have significant financial and operational impacts. These can influence a company’s ability to compete in certain markets with the right products at the right price point. Margins are affected and therefore profitability as well.
Some of the benefits of working with a supplier who has operations strategically located around the world are: lucrative shipping options, local/regional/national tax advantages, and the potential to reduce tariffs. Lubricant customers need reliable supply which, in part, relies on accurate lead times to get shipments to their door. Partnering with a supplier who has a global operations footprint provides options for getting product to customers in different regions in a timely manner. Some smaller lubricant suppliers, or those without a global supply chain, may not be able to meet forecasted demand in the desired timeframe. Understanding how a supplier leverages their network is an important evaluation metric for companies to consider.
The costs associated with shipping products from one country or nation to another vary – depending on a number of factors. Some costs are reasonable, while others can put companies at a severe disadvantage. If they lack the financial resources or scale to absorb those costs, their margins may be impacted significantly. Taxes may be applied to goods entering a nation, a region, or even a local municipality. Tariffs in place because of geo-political relations between nations (ex: China and the U.S.) can have serious affects on global commerce. A supplier with strategic locations may be able to alleviate some of these extra costs by taking advantage of beneficial trade agreements or by utilizing local supply opportunities to avoid tax implications. In summary, supply reliance must be evaluated carefully to determine if a supplier’s capabilities meet the needs of the company.
Risk Abatement
Eliminating risk and assuring product quality are certainly near the top of the list when evaluating potential lubricant suppliers. End users need to ensure the quality of the lubricant they are using in their compressor system or industrial machinery. Poor quality lubricants can lead to system issues up to and including complete failure of the compressor or other components. Distributors or other channel partners run the risk of damaged reputation or worse – legal battles over product failures or voided warranties – if they provide lubricants of poor quality to their customers. Equipment manufacturers and packagers demand quality lubricants for many of the same reasons as distributors. They also run the risk of damaged reputation, product recalls, and legal battles over warranty claims.
The use of lubricants that have been produced in facilities adhering to global industry standards and tested for quality (subject to third party audits), is essential to risk abatement. Meeting the requirements of numerous certifications, registrations, and standardized practices is mandatory for lubricant suppliers. These requirements fall largely in the areas of chemical responsibility (such as REACH or Responsible Care®), manufacturing standards (such as ISO certifications), health and safety standards (such as GHS classifications or OSHA laws for workers). Other important certifications such as NSF, Halal, and Kosher are necessary when the lubricants are being used in food and beverage processing facilities.
Private Label Risk Abatement
Private labeling is a common practice in the manufacturing and distribution of goods & services. The idea is simple – companies see additional revenue opportunities from selling goods & services under their brand – but they lack the necessary expertise to do so themselves. Private labeling is very common in the compressor lubricant and industrial fluids manufacturing industry. The required resources of human talent, specialized technology, and state-of-the-art equipment are not easily replicated.
Private label (PL) fluids are prevalent throughout the value chain as both manufacturers and a variety of distribution channel partners offer up someone else’s chemistry in a package branded with their colors and their logo. Considering all the benefits private labeling offers, one of the most attractive is that (in most cases) the registrations and certifications (such as NSF H1 for example) pass through to the private label products. Companies in the supplier selection process considering offering their own lubricants should carefully evaluate the private labeling capabilities of the supplier. Questions such as, “Are your product certifications and registrations current?” and “Will certifications such as NSF pass through to the private label products?” are necessary to understand exactly what they are getting from the supplier. As beneficial as PL products can be to adding revenue streams, failing to check all the boxes on a supplier can have negative unintended consequences.
In summary, risk abatement can be challenging to plan for and to execute, but with proper supplier evaluation it can be managed effectively. Companies need to ensure their potential supplier is following all current standards, such as those established by ISO. These standards, which are quite common in manufacturing, are aimed at ensuring goods and services are safe, reliable and of good quality. As mentioned, review of all product/service registrations and certifications for accuracy is recommended. Making sure all best practices are being followed before contracting a supplier can avoid “surprises” down the road. Those “surprises” can be costly and have long-lasting negative effects to a company’s reputation.
Ability to Serve
Evaluating a supplier’s “Ability to Serve” borrows a few of the concepts from the previous areas of evaluation yet maintains its own unique criteria at the same time. The concept of a supplier’s ability to serve can be summarized in the following question: “How capable is the supplier to serve the needs of a particular company?”. Depending on the size, scope, diversity and unique needs of a given company that answer could vary. In general, the following points should be addressed when evaluating a potential supplier’s ability to serve.
Breadth & Depth of Products and Services Offered
Questions to consider: Does my company need the lubricant only? Is my company considering a private label brand to sell? How much complexity does my company need managed?
Lubricant suppliers are quite diverse in the number of products and services they offer. Some only offer the product itself packaged under their brand. On the other hand, some suppliers offer the full spectrum of lubricant management services including formulation, manufacturing, packaging variations, marketing assistance, private label services, distribution, and oil monitoring (testing) services. The needs of a company may change over time. Select a supplier that can serve current needs and support expansion efforts in the future.
Level of Technical Expertise Required
Questions to consider: How much technical support does my company need? How complex are my company’s applications? Do they require customized recommendations or are they straightforward in nature? Will we need ongoing collaboration and/or training?
Determining the level of technical support a company needs is a very important factor in the supplier selection process. For example, some companies only need low-technology lubricants (think mineral oil-based options) to fill a compressor and keep it operational. However, in applications such as hydrocarbon gas processing, the need for customized lubricant recommendations based on challenging operating conditions is required. The more complex an application or operating environment, the higher the likelihood of problems arising. Competent lubricant support can provide faster resolution to problems occurring in the field and avoid costly delays or equipment failures. In addition, need for local technical support versus remote consultation is a huge consideration, depending on the individual needs of an organization.
Lubricant training – whether it’s basic fundamentals or advanced diagnostic methodology – is not available from all lubricant suppliers. Channel partners, such as distributors, benefit tremendously from lubricant training to educate their salesforce and serve their customer base more effectively. It can be a significant competitive advantage. Careful evaluation of a potential supplier’s training resources should be discussed and considered depending on the needs of the company. In this information-rich digital environment, the ability to provide the right recommendations and advice to customers is crucial due to the vast amount of misleading or one-sided content found online.
Organizational Size & Impact
Questions to consider: How important is the global reach of my supplier? What level of collaboration does my company need to develop new technologies? Is the supplier built for the long-haul?
In the Supply Reliance area of evaluation discussed earlier, the importance of determining the global reach of the supplier is necessary to match a company’s needs to the products and services provided. Companies serving customers in one singular country have much different requirements than those operating on a global scale. Many factors including supply chain, regulatory requirements, profitability, and technical support need to be considered. Again, current growth goals must be weighed against future growth aspirations to ensure the supplier selection supports all present and future initiatives.
According to the Law of Diffusion of Innovation, some companies will be at the forefront of innovating or adopting new technology and some will lag far behind. The middle majority adopt the technology at differing rates. Companies with a purpose to innovate, such as OEMs focusing on digital IoT technologies, may value lubricant suppliers who value the same philosophies. Identifying suppliers who have established industry connections and are pursuing new platforms of technology may play an important role in the supplier selection process.
Many of the suppliers who favor innovation have established relationships with key industry stakeholders. For example, in the refrigeration industry, ties to groups such as ASHRAE provide instrumental connections to OEMs and refrigerant gas suppliers to evaluate future industry demand and collaborate to develop new solutions to allow sustainable refrigerants to prosper and lessen the effects of environmental impacts.
In the end, a company must decide for themselves how crucial the size and scope of their supplier is to their success. It all comes down to the individual strategy and growth aspirations of each company. The best fit of a supplier must be determined by a qualified cross-functional team employed by the company in search of the best supplier.
Conclusion
The selection process for a lubricant supplier is an important undertaking for any company. Identifying strengths and weaknesses are crucial to the success of OEMs, distribution channel partners and end users alike. There are many business models to choose from, and ultimately a company must select based on their own unique criteria to ensure reliable supply and adequate support. Minimizing risk while capitalizing on competitive advantages requires planning and research to ensure the right selection is made. It is an ongoing process that changes with time – but the fundamental evaluation areas remain the same.
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