Effective lubrication management ensures that machinery and equipment are properly lubricated to reduce wear and tear and high risks of unexpected failure. However, how do organizations know if their lubrication management is effective, and how can they improve and maximize its positive effects?
This is where KPIs or Key Performance Indicators come into play. KPIs provide valuable insights into how well lubrication management programs are performing. By leveraging these KPIs, maintenance teams can optimize lubrication schedules, reduce costs, and ultimately achieve the bottom line: equipment reliability.
This post will explore the essential KPIs for lubrication management, their importance, and how they help achieve the bottom line.
What are Key Performance Indicators (KPIs)?
But first, a brief definition of KPIs. A key performance indicator is any measurable value that tracks the effectiveness and efficiency of any lubrication practice. KPIs help identify areas of improvement that will ensure smooth machinery operation, minimize downtime, and reduce maintenance costs.
Types of KPIs for Lubrication Management
Different KPIs can be tailored to track different areas in lubrication management. The following are the different types of KPIs contrasted together to illustrate their varying purposes and specific uses:
Lagging vs. Leading KPIs
Lagging KPIs measure the outcome of events after they have occurred, while leading KPIs track events that are expected to impact future outcomes. A lagging KPI can be measuring the downtime after a failure occurs.
A leading KPI can be monitoring preventive maintenance compliance to predict and prevent future failures.
Quantitative vs. Qualitative KPIs
Quantitative KPIs can be easily measured and are objective, while qualitative KPIs focus more on quality and are subjective. An example of a quantitative KPI is the percentage of lubrication tasks completed over time.
Alternatively, an example of a qualitative KPI is the result of surveys or feedback on the lubrication training programs.
Input vs. Output KPIs
Input KPIs measure the resources used to achieve the desired results, while output KPIs measure the results of a process or program. For example, an input KPI can be the tracking of the total amount of lubricant used over a specific period.
An output KPI can involve tracking the reduction of lubrication-related equipment failures.
Operational vs. Strategic KPIs
Operational KPIs measure the day-to-day performance of operations, while strategic KPIs measure long-term goals and overall business health. An operational KPI example is monitoring lubrication inventory turnover rates.
An example of a strategic KPI is measuring the overall reduction of downtime in 7 years after improving lubrication practices.
Financial vs. Non-Financial KPIs
Financial KPIs focus on financial performance related to profitability, return on investment, etc. On the other hand, non-financial KPIs focus on other non-financial aspects of a business. A financial KPI can be the cost savings resulting from lubrication-related activities.
A non-financial KPI can be the percentage of certified lubrication technicians.
Internal vs. External KPIs
Internal KPIs measure performance within the company, while external KPIs measure lubrication performance based on related external factors. An example of an internal KPI is the frequency of lubrication audits conducted by a team of key employees.
An example of an external KPI is measuring lubricant contamination levels against industry standards.
The Essential KPIs for Measuring Lube Management Success
When evaluating the success of lubrication management strategies, consider the following essential KPIs:
1. Mean Time Between Lubrication-Related Failures (MTBLF)
This is defined as the average time between lubrication-related equipment failures. This KPI assesses the effectiveness of lubrication practices and whether they are sustained over time.
To calculate the MTBLF, you take the total operating time over a specific period and divide it by the number of lubrication-related failures within that period.
2. Compliance Rate of Lubrication Preventive Maintenance (LPM)
This KPI is defined as the percentage of completed preventive maintenance (PM) tasks completed on time. It ensures that preventive lubrication measures are being implemented according to schedule.
This KPI is calculated by dividing the number of completed lubrication PMs by the number of scheduled lubrication PMs and multiplying the answer by 100.
3. Lubrication-Related Equipment Downtime
This is the total downtime associated with lubrication-related failures such as under or over-lubrication, contamination, etc. It measures the effectiveness of lubrication practices in preventing equipment failures.
To calculate this KPI, you simply take the sum of all the downtime hours of the failures caused by lubrication-related issues.
4. Lubrication-Related Maintenance Cost
This is defined as the total costs of lubrication, including labor, materials, and parts. This KPI can also be expressed as a percentage of the total maintenance cost and of the total operating cost.
This KPI tracks the financial impact of lubrication practices and helps in identifying cost-saving opportunities.
To calculate, take the sum of all costs related to lubrication-related maintenance activities. To express as a percentage of the total maintenance cost, divide this sum by the sum of all maintenance expenses, then multiply by 100.
Similarly, to get the lubrication-related maintenance cost as a percentage of the total operating cost, divide this sum by the sum of all operating expenses, then multiply by 100.
5. Oil or Grease Consumption
This KPI measures the amount of oil or grease consumed over a specific time to track the lubrication usage efficiency and identify potential under or over-lubrication.
Calculate this KPI by measuring the volume of oil or grease used over a period, which can be every month or year.
To incorporate sustainability into lubrication practices, you can also measure the amount of recycled oil or grease consumed and express it as a percentage of the total lubricant consumption.
To calculate, take the volume of recycled lubricant used, divide it by the total lubricant used, and multiply by 100.
6. Lubrication Contamination Levels
This KPI tracks the level of contamination in lubricants to monitor lubricant cleanliness over time. Lubrication cleanliness is one of the indicators of equipment performance and longevity. Track lubrication contamination levels using the results of periodic oil analysis.
7. Lubrication Inventory Turnover Rate
This KPI is one of the most essential inventory KPIs for maintenance. It is the frequency at which lubrication inventory is used and replaced over a specific period.
This KPI tracks the efficiency of inventory management to avoid excess stock or shortages, which is a critical aspect of effective lubrication management.
Calculate this rate by dividing the total lubricant used by the average inventory level for a specific period.
8. Training and Lubrication Certification Rates
This KPI measures the percentage of lubrication technicians or personnel who are trained and certified in lubrication best practices.
By measuring this KPI, you ensure that your lubrication activities are being conducted by individuals who are properly equipped with the knowledge and skills to do their tasks effectively.
To calculate, count the number of trained and certified personnel, divide this by the total number of lubrication personnel, and multiply by 100.
9. Lubrication Audit Frequency
This KPI is simply the number of lubrication audits conducted over a specific period. Regular lubrication audits help show inefficiencies, potential failures, and areas for improvement in lubrication management.
Measuring the frequency of these regular audits helps you determine if you need to increase or decrease the number based on current lubrication performance.
To calculate this KPI, count the number of audits conducted per month, quarter, year, etc.
Keeping Up with KPIs Through Redlist
The above KPIs are only some of the most commonly used in the industrial setting. Your organization may need to measure more depending on the type of machinery, operational requirements, environmental conditions, and other factors.
If keeping up with an overwhelming number of complex KPIs is becoming more and more impossible, you can turn to Redlist’s powerful Lubrication Management Software.
Redlist makes data collection reliable through digitized forms, an easy-to-use platform, and mobile access. Data sharing and communication are also faster and less error-prone through secure cloud-based storage and real-time updates.
Best of all, Redlist is equipped with state-of-the-art analytics, providing you with easy calculations of KPIs, leading to clearer insights and faster decision-making.
Keep up with the demands of KPI calculation and lubrication management analysis. Contact our lubrication experts for a free demo today!
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