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Transitioning to a New Lube Supplier
Brian G. Thorp, PdM Tech, Seminole Electric Coop
Inc.
We recently had this dilemma when our lube oil contract expired.
Seeing all of the possible impacts that could occur, we took a
proactive approach. We tried to calculate all of the possible
costs of switching products, which would then be added to the
bid price.
The first item we figured is the apparent cost to change oil
brands. We came up with just under $10,000 which included, updating
of the MSDS, MMIS, PMIS, the PdM analysis program, changing oil
lab data base, new oil samples for base line, and equipment labeling.
The next process was to include at the bidders expense the proof
of compatibility of products. This was to include actual lab test
results with the current and proposed products, or previously
documented results. If there was a compatibility issue the bidder
was to provide the procedure for proper flushing of the equipment
to accept the new product. The quantity of lubricants that would
have to be changed, flushing fluids, and labor would have been
calculated and added to the bid price. By adding in all the hidden
costs of changing lubricant suppliers, we felt we were on a level
playing field.
Next we came up with the what if plan. This would involve in
house training as to compatibility issues of products. The small
reservoirs would have to be changed instead of topped up. Major
components we were going to try and maintain some of the old product
for top ups until the unit could be shut down to flush and change
out the lubricant. Another item that was discovered was that while
the lubricants may be compatible, the additive packages of the
new product might not be favorable with the equipment in the long
run.
Our current lube supplier was contacted about compatibility with
other brands. They supplied me with a compatibility study that
their marketing technical support team had conducted. According
to their study most similar products are compatible with each
other. One issue noted was the quality of base oil used. While
some use a group II base stock the others don't.
I believe the best approach is the proactive one. Most people
involved with contracts are only looking at the bottom line not
the big picture. When all of the hidden costs are brought to light
and added into the equation, then you have the true cost of changing
products.
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