Pros, cons of outsourcing lubrication

Noria Corporation

A growing trend in industry is to outsource activities considered non-core to the company’s business. This often includes security, facilities maintenance, sanitation and fluid management. But when it comes to lubrication, is contracting out this non-core function an effective strategy? Done properly, with a carefully crafted game plan, success is possible; but the key is “done properly.”

Advantages of outsourcing include reduced overhead, the ability to right-size staffing levels and increased access to skilled workers. However, the decision to outsource is often based simply on “cost per unit time” (how much does it cost to staff the lubrication program?) rather than “increased precision per unit time” (how can I improve the lubrication program’s effectiveness?). Labor costs can’t be ignored, but the consequences of poorly deployed lubrication practices can dwarf the savings from outsourcing. Particularly where “lowering overhead costs” is the dominant driving factor for outsourcing, there’s a real possibility that the successful contractor may have compromised on technician skill levels in order to present a competitive bid.

Not all outsource contracts are driven by cost alone. Many are founded on the belief that the current program is flawed and that an outsource firm can do the job better and cheaper. However, the reality is that a contract technician in a bad system likely will be no more successful than a company-employed tech. Two examples illustrate this point:

1) A company experienced significant reductions in asset availability due to poor fluid cleanliness. Contaminated oil due to poor storage and handling practices, and poor equipment configuration and design (particularly breathers and filters), led to reduced hydraulic pump and valve life and significant downtime. The company acknowledged poor lubrication as the primary cause of many of the problems and decided to outsource the lube program to correct these issues. But unless a provision is made to correct the root cause (contaminated oil) with better storage and handling, equipment design, etc., there likely won’t be any improvements with contract technicians.

2) A company experienced reduced motor bearing life due to imprecise greasing. It’s aware from reports sent back from the motor rebuild shop that evidence of overgreasing has been found (grease in the windings). Intent on correcting the problem, the company hired contract lube techs to better control the program. But unless the outsource firm hires lubrication engineers to grease bearings so that the correct quantity of grease is calculated each time by applying appropriate lube engineer equations (unlikely due to the desire to minimize cost), nothing will change. The correct fix, with or without outsourcing, is to build precision into the process through detailed job plans and procedures.

Figure 1. The ability to contribute to precision machinery

These examples illustrate the fundamental problems that outsourcing can cause when the decision is based on the belief that this single act will improve the program. While it’s true that the skills and motivation of the lube tech can have a tremendous effect of the efficacy of the lube program, a good lube tech in a bad system is no more likely to add value to the process than a poor lube tech, unless the system in which he or she works is improved (Figure 1). An argument can be made that lubrication – for that matter, all other maintenance activities – shouldn’t be outsourced until the lube process has been properly designed and developed, or addressed in concert with contracting out staffing for the program.

Outsourcing is here to stay. In fact, it’s likely to become the norm rather than the exception. But don’t be fooled; bad lubrication is bad lubrication, whether it’s a result of poor internal practices or an ill-conceived outsourcing contract.

If your company is considering contract lubrication, ask, “Are we focused on a long-term strategic vision for excellence in lubrication or are we just playing a numbers game, where short-term gain will be replaced by long-term pain?”

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