Buying Lubrication Instead
of Lubricants
Considering Products,
People
And Programs Can Be Ticket To
Lowest Overall Cost
by Stanley Okoro, Marketing Manager, Equilon Enterprises LLC
Lubricants, Houston
Many companies in the natural gas industry have traditionally relied on
low bids in purchasing lubricants—but this may not be the lowest-cost
way of doing business. In today’s cutthroat climate of downsizing,
mergers and acquisitions, savvy managers are looking at every angle to
improve their competitive stance. That means looking at the total cost of
operations, not the line-item prices.
Many people think of lubrication as a collection of products, but this is
only the starting point. The people and the programs that come with the
products can be even more important, as both Shell Oil Company (one of the
owners of Equilon Enterprises LLC) and PanEnergy discovered when the two
companies negotiated a lubrication contract a few years ago. In the
process of meeting the needs for products, people and programs (3Ps if you
will), the working arrangement between the two companies became like a
partnership where both partners win: Shell gained sales of more than 1.2
million gallons of lubricants, and PanEnergy gained immediate savings. As
the program matured and the benefits of the second and third “P”
kicked in, savings have grown further, and the understanding of the total
lubrication picture has increased.
Here are some of the important points.
Products
While some vendors may not want to admit this, not all products are
created equal. Many pipeline companies buy lubricants solely on the basis
of specifications and price. They think they’re getting the best value,
but there are other important factors that contribute to a product’s
value.
Applicability of the product is extremely important. Make sure the vendor
you select has the technology to allow for consolidation of products and
simplification inventory management without compromising equipment
performance. Look for products that are not only approved by the OEMs, but
are also recommended by them. You’ll probably save money long term by
reducing wear and ensuring longer life for both your equipment and the
lubricants.
R&D capability that supports a product is another factor. When you
compare suppliers, look for a strong bench. Like a winning football team,
the best supplier will have great depth in their resources: the research
and development capabilities to formulate products to meet your needs. To
win the PanEnergy business, Shell had to be proactive and provide products
that met its needs. R&D was ready and able to provide the support
needed to ensure Pan Energy utilized the right products for their
applications.
People
Products mean nothing without the right people in the right place to make
them work. The ideal solution is a team comprised of a sales engineer and
an STLE-CLS certified lubrication specialist. The teams should be assigned
to each pipeline location, and they should be out there checking things on
a regular basis. The sales engineer should be someone with whom you like
working, because he or she will be responsible for making your overall
experience a positive one.
Your lubrication engineer should have considerable industry experience. If
possible, choose a supplier that has engineers who have credentials such
as STLE-CLS or who have obtained failure-analysis certification from one
or more OEMs. This level of expertise is your assurance of the best help
in diagnosing, fixing and preventing problems—and problems almost always
cost more than lubricants.
Consider also the distribution system your supplier uses. How qualified
are the distributors? What is their level of experience? What kind of
emergency service can they provide? Lubricants division distributors who
supply pipeline companies like PanEnergy must provide dedicated and
properly trained manpower, first-line technical service and on-time
deliveries.
Programs
This is arguably the most important element that your lubrication partner
provides.
First, your supplier should provide complete training and conversion help.
Shell was awarded the PanEnergy business in mid-December 1996, and exactly
a month later, the conversion team hit the road, covering 13 locations in
14 days. The team consisted of three staff people from PanEnergy, the
manager of Shell’s Oil & Gas lubrication marketing segment, three
Shell technical experts, and, in most cases, the local Shell area rep and
the local distributor.
In preparation for the trip, Shell had studied the equipment, the
applications and the operating history, so they were prepared with
detailed recommendations. At each location, the team met with 15-30
representatives from nearby compressor stations to discuss the products,
the recommendations for each piece of equipment, and the reasons for each
recommendation. Good discussions always followed, which in some cases led
to changes. After the trip, one of the technical experts commented,
“When we were on the road together, it was like we were working for the
same company.” That’s the spirit you should be looking for.
Second, look for value-added engineering. Yes, you have a certified
STLE-CLS engineer assigned to each site—but what are they actually doing
out there to save you money? A good lubrication partner will be helping
you reduce downtime in many ways, for example, boroscope analysis where
appropriate and needed. It’s nice to have a supplier that owns this
equipment and knows how to use it, so that you have access to it when
needed and at $40,000 per unit, it would be possible for each site to have
access to this technology through their lubrication supplier. Using a
boroscope fiber-optic analysis system is a lot like using an arthroscopic
procedure instead of slicing in for major teardown surgery. For example,
one Equilon Lubricants Shell-branded customer has used our boroscope
service to reduce maintenance teardowns from every year to every two
years. The cost avoidance for a single missed teardown includes personnel
costs plus $2,000-$3,000 per day in lost throughput usually for several
days. This all adds up to several thousand dollars in cost avoidance for
each teardown.
Failure analysis is another area where value-added engineering can make a
difference. If your lubrication engineers have the appropriate training,
they can help save you both time and money.
Third, look for a sound fluids management program, including oil analysis,
oil reclamation, and used oil recovery and disposal. Oil analysis should
include not only the statistical results, but also an informed
interpretation by the supplier’s own technical experts, who understand
both their products, the operating environment and your application. Oil
reclamation should be carried out by a qualified provider with the oil
supplier’s input or by the supplier itself; only the supplier really
understands its products and the additives required to refortify the—and
render the product suitable for continued use.
Fourth, look for reliable inventory management. The distributor should be
capable of providing just-in-time inventory and/or consignment services
where needed. The quality of the service you receive from a local
distributor ultimately comes back to the quality of the relationship
between the distributor and the supplier. The supplier needs to compensate
the distributor for providing the extra service required by natural gas
customers, and we also think the distributor needs to be monitored for
performance.
Finally, the distributor, the sales engineer and the lubrication engineer
should have a close working relationship to make sure you receive the best
advice on storage and handling and the best service in emergency
situations.
The Right Questions
The question you should be asking your lubrication partner is not “What
are you doing?”(What products are you selling, what prices are you
quoting?), but, rather, “How are you helping my people do their jobs
better? How are you helping us do a better job?” and, most important,
“What are you doing to help us save money and be more competitive in the
marketplace?” Your supplier can be working like crazy, but if they’re
not helping improve your operation or saving you money in more ways than
price, they’re doing less than they should be.
The real story behind excellent lubrication is not products—it’s
solutions. Cost-effective lubrication is not about price, but about the
overall cost of doing business. It includes products, people and programs.
P&GJ
(Headquartered in Houston, Equilon Enterprises LLC is a joint venture
between Shell Oil Company and Texaco Inc. The company combines major
elements of Texaco’s and Shell’s western and midwestern U.S. refining
and marketing businesses and their nationwide lubricants and
transportation businesses.)
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