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TLM: A tool to cut lube & maintenance costs

Published

6 years ago

January 7, 2019

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Lubrication is generally taken for granted and little do O&M people realise that lubrication planning starts right from the arrival of lubricants in the main stores.

Industry today is operating under severe competitive Global Business Environment. In order to be compete with global players, it is of paramount importance to seriously practice all-out cost reduction and manufacturing inputs conservation techniques. Any reduction in their costs, contributes directly towards profitability to the organisation.

Industry professionals generally focus their attention on areas of their core competence and achieving their day to day objectives. In doing so, other vital supporting functions like "scientific lubrication" of plant and machinery do not get the desired attention, since functional managers engage themselves only on day to day activities. Lubricants and lubrication is generally taken for granted and little do operating and maintenance people realise that lubrication planning starts right from the arrival of lubricants in the main stores. Therefore, storage, handling, dispensing lubricants assume a very important step towards feeding contamination-free lubricating oil or greases to the machine.

This is vital for reducing the maintenance costs – which at times goes unnoticed, because of basic thrust being on production only.

It is also disappointing to observe the lack of awareness of the fact that various high performance lubricants, manufactured under stringent quality control to meet required quality standards, can give expected results ONLY when they are used in the machinery in the same uncontaminated condition, under which they are manufactured, tested, packed and transported to the user industry.

This is usually not being done because of lack of adequate awareness, systems and concern for quality of lubricants, particularly at the operating level in the industry, and its impact on maintenance costs, which remains hidden in overall manufacturing costs.

Oil companies invest large amounts of money and efforts on research and development activity in developing and producing high performance lubricants and all such efforts and expenditure will be wasted and the industrial consumers shall also incur heavy losses, if such lubricants are allowed to get contaminated before fed to machines.

This lack of concern for quality of lubricants definitely leads to increased maintenance costs, costs due to machinery breakdown and loss of production and many hidden costs including cost of manpower involved.

Industry must appreciate that "Oil in Machine is like Blood in Human Body" As long as we can maintain lubricant clean and on-spec in a machine, the lubricant is fit for further usage. Therefore, Lubricant has to be kept free of contamination. Water, dirt, suspended impurities and air mixed in Lube oil are the worst enemy of lubricant in service. If these contaminants are not removed timely from lube oil, they can even result in stoppage of the machine resulting in loss of production and leading to unwarranted expenditure to the Industry.

Keeping above factors in view, we have developed the concept of Total Lubrication Management (TLM), a positive and definite step towards achieving improved maintenance, and a tool for cost reduction in manufacturing.

An eye opener
The "Jost report" funded by the British Government in 1966 to study the effects of tribology (a Science of friction which particularly collaborates with lubrication of the machines) on the country’s Gross National Product (GNP), revealed the following startling facts:
When applied to a company’s spreadsheet, they suddenly turn into a substantial profit picture.

Excerpts from expert studies
* "80% of mechanical failures relate to poor or improper lubricating practices"
IMECHE (UK)
* Prof. E. Rabinovicz USA writes in his report:
"67% of GNP (USA) is required to fix the damage caused by mechanical wear"
* "Contamination is the number one cause of bearing damage that leads to premature removal"

-TRW BEARING DIVISION, US.

* "Dirt & contamination are by far the number one cause of hydraulic system failures"

CATERPILLAR – USA

* When fluid is maintained 10 times cleaner, hydraulic pumps life can be extended by 50 times.
-OKLAHAMA STATE UNIVERSITY

TLM emphasises on the following:
Awareness and training to management staff, engineers and operating and maintenance personnel in the industry on lubricants and correct methods for lubrication, effect of lubrication on maintenance costs etc. All positive manufacturing activities in any industry start with Awareness, training and good housekeeping. Most of the industrial oils (other than engine oils) are rejected from the service only because of contamination by dust, dirt, water or wear metal particles. If these particles are removed regularly, from the Lubricating Oil and tested for further use, the machine life and oil life can be extended manifold. This is a sound step towards not only conservation of lubricants, but also reduced maintenance costs drastically.

Introducing systems in the industry for repetitive actions of correct suggested methods. Without systems monitoring and auditing, there can be deviations in repetitive action over a period of time. Introducing colour coding for various grades of lubricants and use of dust-free containers, record-keeping of lubricants and lubrication, is also part of system improvements.

Establishing condition monitoring of lubricating oil in service, i.e. accepting or rejecting the oil in service based on the condition of oil, machine wear debris analysis etc., before rejecting or removing oil or filling new oil ? this step shall lead to optimum utilization of lubricants. This is an integral part of Total Lubrication Management (TLM). The oil condition monitoring is highly recommended to the industry as it not only provides the condition of oil but also of machines.

Installing in-house oil regeneration system and a programme by GLOBETECH MS-V Filtration system. This is a methodology to regenerate the contaminated used lubricating oils. Do the Laboratory testing for main characteristics of the oil, e.g. Viscosity @ 40oC or 100oC, TBN, TAN, Flash point, water content, unsolubles for contamination etc., of the regenerated lube oil and then decide for further use in the machines. This will reduce cost of buying new lubricating oils and affect Lube oil conservation. This is a tangible oil conservation parameter to the industry.

It is astonishing to note that Japanese who have done enormous work in quality Management and led the industry to adopt TPM (Total Preventive Maintenance) have just overlooked lubrication as a maintenance related major issue.

TPM cannot be achieved in true sense without Total Lubrication Management. Total Lubrication Management is the key to achieve major cost reduction in any manufacturing industry.

About the author
KB Mathur, a mechanical engineer, is having over 40 years of experience with the petroleum industry.

He has worked in major oil companies in India at senior positions. In 1999, he founded Global Technical Services, a leading consulting firm and service provider in India and is associated with large cross section of Indian cement industry. Email: kbmathur@gtsindia.com

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Price hikes, drop in input costs help cement industry to post positive margins: Care Ratings

Published

3 years ago

October 21, 2021

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Region-wise,the southern region comprises 35% of the total cement capacity, followed by thenorthern, eastern, western and central region comprising 20%, 18%, 14% and 13%of the capacity, respectively.

The cement industry is expected to post positive margins on decent price hikes over the months, falling raw material prices and marked drop in overall production costs, said an analysis of Care Ratings.

Wholesale and retail prices of cement have increased 11.9% and 12.4%, respectively, in the current financial year. As whole prices have remained elevated in most of the markets in the months of FY20, against the corresponding period of the previous year.

Similarly, electricity and fuel cost have declined 11.9% during 9M FY20 due to drop in crude oil prices. Logistics costs, the biggest cost for cement industry, has also dropped 7.7% (selling and distribution) as the Railways extended the benefit of exemption from busy season surcharge. Moreover, the cost of raw materials, too, declined 5.1% given the price of limestone had fallen 11.3% in the same aforementioned period, the analysis said.

According to Care Ratings, though the overall sales revenue has increased only 1.3%, against 16% growth in the year-ago period, the overall expenditure has declined 3.2% which has benefited the industry largely given the moderation in sales.

Even though FY20 has been subdued in terms of production and demand, the fall in cost of production has still supported the cement industry by clocking in positive margins, the rating agency said.

Cement demand is closely linked to the overall economic growth, particularly the housing and infrastructure sector. The cement sector will be seeing a sharp growth in volumes mainly due to increasing demand from affordable housing and other government infrastructure projects like roads, metros, airports, irrigation.

The government’s newly introduced National Infrastructure Pipeline (NIP), with its target of becoming a $5-trillion economy by 2025, is a detailed road map focused on economic revival through infrastructure development.

The NIP covers a gamut of sectors; rural and urban infrastructure and entails investments of Rs.102 lakh crore to be undertaken by the central government, state governments and the private sector. Of the total projects of the NIP, 42% are under implementation while 19% are under development, 31% are at the conceptual stage and 8% are yet to be classified.

The sectors that will be of focus will be roads, railways, power (renewable and conventional), irrigation and urban infrastructure. These sectors together account for 79% of the proposed investments in six years to 2025. Given the government’s thrust on infrastructure creation, it is likely to benefit the cement industry going forward.

Similarly, the Pradhan Mantri Awaas Yojana, aimed at providing affordable housing, will be a strong driver to lift cement demand. Prices have started correcting Q4 FY20 onwards due to revival in demand of the commodity, the agency said in its analysis.

Industry’s sales revenue has grown at a CAGR of 7.3% during FY15-19 but has grown only 1.3% in the current financial year. Tepid demand throughout the country in the first half of the year has led to the contraction of sales revenue. Fall in the total expenditure of cement firms had aided in improving the operating profit and net profit margins of the industry (OPM was 15.2 during 9M FY19 and NPM was 3.1 during 9M FY19). Interest coverage ratio, too, has improved on an overall basis (ICR was 3.3 during 9M FY19).

According to Cement Manufacturers Association, India accounts for over 8% of the overall global installed capacity. Region-wise, the southern region comprises 35% of the total cement capacity, followed by the northern, eastern, western and central region comprising 20%, 18%, 14% and 13% of the capacity, respectively.

Installed capacity of domestic cement makers has increased at a CAGR of 4.9% during FY16-20. Manufacturers have been able to maintain a capacity utilisation rate above 65% in the past quinquennium. In the current financial year due to the prolonged rains in many parts of the country, the capacity utilisation rate has fallen from 70% during FY19 to 66% currently (YTD).

Source:moneycontrol.com

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Wonder Cement shows journey of cement with new campaign

Published

3 years ago

October 21, 2021

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The campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV…

ETBrandEquity

Cement manufacturing company Wonder Cement, has announced the launch of a digital campaign ‘Har Raah Mein Wonder Hai’. The campaign has been designed specifically to run on platforms such as Instagram, Facebook and YouTube.

#HarRaahMeinWonderHai is a one-minute video, designed and conceptualised by its digital media partner Triature Digital Marketing and Technologies Pvt Ltd. The entire journey of the cement brand from leaving the factory, going through various weather conditions and witnessing the beauty of nature and wonders through the way until it reaches the destination i.e., to the consumer is very intriguing and the brand has tried to showcase the same with the film.

Sanjay Joshi, executive director, Wonder Cement, said, "Cement as a product poses a unique marketing challenge. Most consumers will build their homes once and therefore buy cement once in a lifetime. It is critical for a cement company to connect with their consumers emotionally. As a part of our communication strategy, it is our endeavor to reach out to a large audience of this country through digital. Wonder Cement always a pioneer in digital, with the launch of our IGTV campaign #HarRahMeinWonderHai, is the first brand in the cement category to venture into this space. Through this campaign, we have captured the emotional journey of a cement bag through its own perspective and depicted what it takes to lay the foundation of one’s dreams and turn them into reality."

The story begins with a family performing the bhoomi poojan of their new plot. It is the place where they are investing their life-long earnings; and planning to build a dream house for the family and children. The family believes in the tradition of having a ‘perfect shuruaat’ (perfect beginning) for their future dream house. The video later highlights the process of construction and in sequence it is emphasising the value of ‘Perfect Shuruaat’ through the eyes of a cement bag.

Tarun Singh Chauhan, management advisor and brand consultant, Wonder Cement, said, "Our objective with this campaign was to show that the cement produced at the Wonder Cement plant speaks for itself, its quality, trust and most of all perfection. The only way this was possible was to take the perspective of a cement bag and showing its journey of perfection from beginning till the end."

According to the company, the campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV. No other brand in this category has created content specific to the platform.

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In spite of company’s optimism, demand weakness in cement is seen in the 4% y-o-y drop in sales volume. (Reuters)

Published

3 years ago

October 21, 2021

admin

Cost cuts and better realizations save? the ?day ?for ?UltraTech Cement, Updated: 27 Jan 2020, Vatsala Kamat from Live Mint

Lower cost of energy and logistics helped Ebitda per tonne rise by about 29% in Q3
Premiumization of acquired brands, synergistic?operations hold promise for future profit growth Topics

UltraTech Cement
India’s largest cement producer UltraTech Cement Ltd turned out a bittersweet show in the December quarter. A sharp drop in fuel costs and higher realizations helped drive profit growth. But the inherent demand weakness was evident in the sales volumes drop during the quarter.

Better realizations during the December quarter, in spite of the 4% year-on-year volume decline, minimized the pain. Net stand-alone revenue fell by 2.6% to ?9,981.8 crore.

But as pointed out earlier, lower costs on most fronts helped profitability. The chart alongside shows the sharp drop in energy costs led by lower petcoke prices, lower fuel consumption and higher use of green power. Logistics costs, too, fell due to lower railway freight charges and synergies from the acquired assets. These savings helped offset the increase in raw material costs.

The upshot: Q3 Ebitda (earnings before interest, tax, depreciation and amortization) of about ?990 per tonne was 29% higher from a year ago. The jump in profit on a per tonne basis was more or less along expected lines, given the increase in realizations. "Besides, the reduction in net debt by about ?2,000 crore is a key positive," said Binod Modi, analyst at Reliance Securities Ltd.

Graphic by Santosh Sharma/Mint
What also impressed analysts is the nimble-footed integration of the recently merged cement assets of Nathdwara and Century, which was a concern on the Street.

Kunal Shah, analyst (institutional equities) at Yes Securities (India) Ltd, said: "The company has proved its ability of asset integration. Century’s cement assets were ramped up to 79% capacity utilization in December, even as they operated Nathdwara generating an Ebitda of ?1,500 per tonne."

Looks like the demand weakness mirrored in weak sales during the quarter was masked by the deft integration and synergies derived from these acquired assets. This drove UltraTech’s stock up by 2.6% to ?4,643 after the Q3 results were declared on Friday.

Brand transition from Century to UltraTech, which is 55% complete, is likely to touch 80% by September 2020. A report by Jefferies India Pvt. Ltd highlights that the Ebitda per tonne for premium brands is about ?5-10 higher per bag than the average (A cement bag weighs 50kg). Of course, with competition increasing in the arena, it remains to be seen how brand premiumization in the cement industry will pan out. UltraTech Cement scores well among peers here.

However, there are road bumps ahead for the cement sector and for UltraTech. Falling gross domestic product growth, fiscal slippages and lower budgetary allocation to infrastructure sector are making industry houses jittery on growth. Although UltraTech’s management is confident that cement demand is looking up, sustainability and pricing power remains a worry for the near term.