“More Than List Price” How Evaluating Synthetic vs. Conventional Oil Can Add – or Subtract – From Your Bottom Line
By: Chris Fisk, Vice President, Acculube
For Trans Alliance, (Greenville, OH) switching from an inexpensive conventional oil to a synthetic oil for its vehicle fleet saved them $51,000 in cash in the first year. The savings wasn't derived from the price of the oil itself: synthetics can cost $25 to $50 a gallon compared to $5 to $18 a gallon for conventional.
The savings came from what are called the “intangibles,” the benefits that come from the characteristics of synthetic oil: less oil consumption, less maintenance time, additional availability of vehicles, and direct fuel savings. For example, Trans Alliance spent $400 each time a truck didn't crank in cold weather and required road-side service. Synthetics eliminated that expense.
These “intangibles” aren't unique to fleets. Industry's use of synthetics can improve safety and reduce machine downtime, which saves money in repairs and lost production.
Many purchasing agents, however, are unaware of the savings potential of synthetic oils. If they have researched the issue, that research is often negated when they speak to their sales representative.
The Sales Rep: Interested in your Business – But Not Always Your Best Interests
If a sales rep sells you synthetic oil, you may save more long-term, but he may not benefit as much. In industrial applications, conventional oil is usually changed annually. Synthetics, however, can last three to five years. In transportation, conventional oil is changed every 15,000 miles, while synthetics can last 80,000 to 90,000 miles with appropriate analysis.
Fewer oil change-outs lead to fewer opportunities for the sale rep to sell oil. This doesn't necessarily mean if he sells you conventional oil, he's leading you down the wrong path; there are applications where synthetics are not appropriate and conventional is a better choice.
In most situations, however, the sales rep either doesn't understand the value of a synthetic, or doesn’t understand your equipment and process. In their defense, most sales people are not engineers. They are expert at building relationships, but are rarely trained to understand the engineering necessary to maintain today's industrial machines and vehicles.
Effects of improper oil
Here's what can happen when the wrong oil is used in a machine or vehicle:
Machine downtime increases
We are asking more from machines in a factory environment. We want them small to increase productivity per square foot, yet we expect higher outputs. That's a lot of stress. Lubricants help lessen the stress, but conventional oils weren't designed for that level of stress.
Expensive machine parts are replaced more frequently
One of the most common examples of why it’s important to choose the correct oil involves servo valves. Servo valves are used in modern industrial machines to control how hydraulic fluid is ported to an actuator. Servo valves are very accurate, but work with extremely tight tolerances. Consequently, they are also susceptible to debris and varnish, a byproduct of low-quality oil.
Over time, debris and varnish will destroy the servo valve. A new servo valve costs $5,000 to $15,000, not including the costs of machine downtime or lost production. In some industries, downtime is the biggest cost of the failure. Synthetic oils prevent varnish and the consequent debris, extending the life of the equipment and preventing downtime.
More maintenance costs
Extended downtime and increased part replacement means higher overall maintenance costs. The average industrial machinery mechanic earns a little over $21 an hour in the United States. This is just $4 less than a single gallon of synthetic oil, which can easily last for 10,000 serviceable hours.
Fewer vehicles sitting idle
In transportation, the type of oil you put in your vehicle impacts how well it works in extreme weather conditions. Freezing temps make batteries weaker, oils colder, and engines harder to start. It’s not uncommon for conventional oils to thicken in the cold. This is why many still believe you have to warm up your car before you can drive it. Sitting idle warms up the thick conventional oil so it can flow. Synthetics, on the other hand, have a better viscosity index; they flow in subzero temperatures.
Less vehicle component wear
The majority of engine wear occurs at start-up. Once you start your car, the moving parts of your engine require the flow of oil to function properly. If you’re using conventional oils, the lubrication may not reach the moving parts until the engine is warm. Synthetic oils, on the other hand, get to loaded surfaces faster, resulting in reduced component wear and longer engine life.
While conventional oils have their purpose, most industrial machine and fleet transportation applications can benefit from synthetic oils. Synthetics extend machine and vehicle life, and lower costs from maintenance and machine downtime. This is a lesson Trans Alliance and others have learned, and used to their advantage.
Trans Alliance LLC is a freight carrier and logistics company with a diversified fleet that includes Volvo and Kenworth Power Units, Air-ride Dry Vans, Hopper Bottom Trailers, Dry Van/Hopper Conversion Trailers, Feed Trailers, Fuel Tankers, Drop Decks, Fertilizer Tankers, and Seed Tenders.
ABOUT THE AUTHOR: Chris Fisk is Vice President of Acculube, a Dayton-Ohio based supplier of metalworking and manufacturing fluids to American manufacturers, machine shops and vehicle fleets.
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