Reliability has long been recognised as an essential contributor to profitability. Nonetheless, technologies that support reliability have been seen as optional rather than an essential component of business operations.
Recent events have begun to change that viewpoint. The effects of the Covid pandemic, disruptions to the global supply chain, and an increasingly dislocated labor pool have altered perceptions of what reliability means and why it is important.
It has always been understood that reliability is the differentiator between a profitable enterprise and one that loses money, but the recent combination of disruptions has driven the message home more strongly than ever. And the technologies that support reliability are starting to be seen not as options, but rather as key mandated solutions.
However, with the increasing focus on corporate sustainability, it is becoming clear that there are wider benefits to improving the reliability of your equipment, above and beyond the cost-saving impact.
The Rising Importance of Sustainability
The industrial sector accounts for a significant proportion of greenhouse gas emissions, and so organizations operating in that sector have, accordingly, come under increasing global pressure to reduce their carbon footprint in the near-term and meet sustainability targets.
Glasgow’s COP26 climate change summit in 2021 accelerated this activity, with many companies signing up to the pledge to meet greener corporate goals. Every Fortune 500 company around the world has begun to appoint personnel whose job it is to improve sustainability initiatives.
To help measure their sustainability progress, these companies have developed Environmental, Social, and Governance (ESG) policies to provide the strategic framework for identifying, assessing, and addressing their objectives and activities.
ESG policies cover a diverse range of issues, from an organization’s carbon footprint, through labor practices, to ethical trading and corruption. The key areas of focus vary throughout different sectors and, unsurprisingly, environmental concerns are very important for many industries such as oil and gas.
A clear ESG policy helps meet the demand from consumers for businesses to ensure they provide high standards of sustainability and quality of employment. This, in turn, can generate more brand loyalty and repeat business, and has a positive impact on share prices. Regulators and policymakers also see ESG as an area where the corporate sector is helping them to solve social problems such as environmental pollution and workplace diversity.
Additionally, more than 2,000 academic studies have been carried out on the effects of ESG, with approximately 70% of them finding a positive relationship between ESG scores and financial returns, whether this is measured by equity returns, profitability, or valuation multiples.
Another important element is the cost of capital. According to the global management company McKinsey and Co., evidence is emerging that a better ESG score translates to about a 10% lower cost of capital. This is because the risks that affect your business, in terms of its license to operate, are reduced if you have a strong ESG proposition. This increased focus on sustainability can be a cause of conflict within organizations, as departments clash over resources to improve profitability or sustainability.
For example, an operator needs to run a machine to obtain production goals and meet desired profitability, while a maintenance engineer or technician wants to perform needed preventative or corrective work to ensure or re-establish the equipment's most efficient state. Both actions are necessary for an organization to be efficient, profitable, and sustainable.
However, improving reliability means not having to make a choice between these two goals. It is not just a key factor in meeting the desired profitability. It also helps companies to achieve their green targets and is one of the fastest ways to reach this goal.
In many ways, reliability equals sustainability.
Why Reliability Is Important
On one level, the importance of reliability is obvious: unreliable equipment, whether it is plant machinery or vehicles, can lead to unplanned repairs or downtime. This can create costs as much as 10-times higher than if this maintenance was planned and scheduled.
Additionally, unplanned downtime is disruptive, affects productivity, and can be a risk to other equipment or even personnel.
Understanding reliability requires an understanding of why the equipment itself fails: why the components fail, likely failure mechanisms, and the factors that cause or accelerate these mechanisms.
For example, abrasion, adhesion, fatigue, electric discharge, corrosion, and deposition have been identified as common failure mechanisms in industrial operations, and each has its own unique contributing factors. In addition, failure mechanisms progress in stages from incipient to catastrophic, providing opportunities to detect and correct this deterioration.
With this in mind, we can determine the best ways to mitigate these failure mechanisms or avoid them altogether. It also allows the development of predictive condition-monitoring methods which can measure failure progression before it reaches catastrophic levels.
The relationship to sustainability should be clear: reliable machinery does not require frequent replacement or repair and operates in a more efficient way that consumes fewer resources.
The Role of Oil Analysis in Reliability
Improving maintenance planning and scheduling can yield huge efficiency improvements while avoiding unnecessary production downtime and excessive costs.
It is also the case that the industrial sector accounts for a significant proportion of greenhouse gas emissions, and in most of these industries, oils and lubricants are used for machinery, vehicles, and other plant equipment.
Lubrication can significantly impact the overall efficiency of a machine if the right lubricant is being used while performing its function of reducing the coefficient of friction. The lubricant can also affect the energy efficiency of the equipment and considerably reduce the amount of power consumed.
Not only that, it is estimated that for every tone of lubrication saved through increased efficiency, three tons of CO2 are saved from the production process.
As a result, oil analysis solutions can help organizations to achieve their reliability goals, meeting all related KPIs.
They can achieve this by helping to extend drain intervals, avoid equipment failure at the wrong time — and the additional costs involved with that — reducing pressure on supply chains, and reducing the burden of trying to find the right labor at the right time.
Oil analysis often provides cost savings along with quantifiable environmental benefits using Life Cycle Assessment (LCA). LCA is a well-documented practice, defined in ISO 14040, but there are still areas of interpretation in performing LCAs on lubricants.
To provide additional clarity, the American Petroleum Institute (API) has published a draft technical report entitled, “Lubricants Life Cycle Assessment and Carbon Footprinting – Methodology and Best Practice”, aimed at improving the accuracy and consistency of performing LCAs on lubricants.
Activities involved in oil analysis include sampling in-service lubricants and testing those samples to evaluate fluid chemistry, system contamination, and machinery wear. Taking a proactive approach to monitoring fluid condition and system contamination supports precision lubrication practices.
In order to identify failure mechanisms, evaluate severity and schedule planned maintenance, predictive monitoring for ferrous and non-ferrous wear debris, together with particle-shape classification, is extremely useful.
Using instruments designed for the accurate analysis of oil and other lubricating fluids, critical data can be obtained about an engine’s condition, providing an early warning of engine failure. Capturing, analyzing, and trending this data enables maintenance to be scheduled before a failure occurs and avoids the expense of unnecessary maintenance and the disruption of taking an engine out of service before it needs to be.
The result is higher equipment availability, greater productivity, lower maintenance costs, lower total cost of ownership, fewer outages, optimal equipment performance, and greener operation — all key elements of any sustainability goals.
Reliability is no longer an option for organizations — it is an essential requirement for attaining their profitability and environmental targets.
It allows companies to unlock funds that were allocated for ESG initiatives — these initiatives may be long-term projects, such as switching to alternative fuels or renewable energy supplies. They may be several years away from making a tangible difference, whereas improving reliability makes a far more immediate impact.
By ensuring the equipment used in any production setting is reliable, the costs involved can be minimized or avoided, while the demands on industrial manufacturing for materials, labor time, and other overheads can be reduced. This, in turn, contributes significantly towards your organization’s global sustainability goals.