We have multiple screw air compressors in our facility and they are all covered under warranty because we use their proprietary oil. We have had to actually use the warranty a few times, and we have saved quite a few pennies because of it.

Then a fellow employee told me that the oil we're using came from the air compressor vendor. I said, great! If they'll warranty our compressors, and replace it if it fails, who wouldn't?

Then I heard the price of the oil:
Compressor vendor's oil cost per 5 gallon pail: $750
Amount of compressor vendor's oil we use annually: 150 - 5 gallon pails.
Total expenditure per annum for compressor vendor's oil: $112,500

Cost for one new screw air compressor: ~$50,000

Are we shooting ourselves in the foot? Should we risk paying for the failure ourselves and change oil vendors to a MUCH cheaper oil? We calculated it and found a very capable equivalent oil would cost around $17,000 per year with the same consumption. Should we move to the cheaper oil?

Don't tell me to move to a centrifigal air compressor . We know that is the obvious thing to do . . I know, stop the leaks. The issue is that they are screw compressors, and they will use a certain amount of oil, regardless. That is the nature of the design.

In the meantime, I know my recommendation. What is yours?

Thanks.

I don't have any recommendation just some rambling observations.

150 5-gallon pails in a year. How many gallons does the compressor crankcase hold? You must be adding frequently.

Requiring you to purchase oil at $150 per gallon as a condition of the warranty is highway robbery.

But the costs to weigh in the decision may not just be cost of oil and the cost for vendor repair. If changing oil decreased reliability or availability, there may be other costs to the plant.

Also one wonders if changing oil would have any effect on the already-severe leakage. I remember either switching to or from synethetic there can be increased leakage at the seals. Something to do with seals soaking up oil or drying out?

I would have a heart to heart talk with the vendor. Why is the oil so expensive? Why is this particular magic oil so important that the warranty cannot be sustained any other way? What does he say will happen if you switch oils(other than losing your warranty).

How many litres in 5 gallon pails?

Does the vendor cover the warranty costs using the proprietary oil sales?

Is the screw compressor really critical ie if it fails, no production at all? If yes, for how long?

Doesn't it have a redundancy?

1 gallon = 3.78 litres so 5 gallons = 18.9 litres.

Why is it so expensive? Well, because. Remember getting those statements from your parents? Just because. Never liked it, but had to live with it.

The compressor OEM requires using their oil to maintain warranty. If we switched to any other brand, we would lose the warranty. By the way, we could buy two new compressors for the amount of oil we use. Also, there are about 9 of these model compressors in the mill.

The oil is not leaking, it is getting used up in the process. It is a screw compressor, and that is its nature to use oil.

Josh: Yes there is redundancy, but why would that matter? We have 9 compressors and maybe we can shut down one or two. The issue is that they still use the oil. My question was what others would do, and have done regarding the vendor's oil and the warranty of the compressor.

Electricpete: Yes, in my humble opinion it is not just highway robbery, it is "legalized" highway robbery. They should be ashamed of themselves.

Shouldn't you really be looking at total cost of ownership over the lifetime of the compressors or lifetime of the plant.

Surely there are other compressors from other vendors that do the job.

You seem to have a failure history for these compressors. It seems easy to forecast the probability of failure with their oil. Assuming there is no alternative vendor, it's the probability of failure cost versus lube cost.

We have faced the same situation. 14 rotary screws is our count. The vendor is very sticky about warrenty and using their oil. In our situation we decided to run the OEM oil for the 1st year while full warrenty is in effect and then change to a major oil company product.

History has shown the OEM varnished the compressor internals and started plugging seperators.

We ran the compressor for 1 week after switching oils. It really cleaned up the slugging and seperators.

On the oil tests the OEM oil TAN numbers increased dramtically over time whereas the new oil has extended our oil changes 1000 hours while slightly elevating the TAN.

I'm not a legal expert, but doesn't Moss-Magnuson act prohibit warranties from specifying a specific brand of oil, unless they provide it for free?

This link is from an Amsoil site, as opposed to an unbiased legal opinion, but does anyone know the real ruling on this? Magnuson-Moss Act

Gee, thanks, Rich! This is really good. I clicked on the link, and it did apply to this case, and I found another "summary" of the act.
This page goes through the details in layman's terms:
Understanding the Magnuson-Moss Warranty Act

It highlights this fact about "Tie-In Sales" Provisions:

quote:

Generally, tie-in sales provisions are not allowed. Such a provision would require a purchaser of the warranted product to buy an item or service from a particular company to use with the warranted product in order to be eligible to receive a remedy under the warranty. The following are examples of prohibited tie-in sales provisions.

Example 1: In order to keep your new Plenum Brand Vacuum Cleaner warranty in effect, you must use genuine Plenum Brand Filter Bags. Failure to have scheduled maintenance performed, at your expense, by the Great American Maintenance Company, Inc., voids this warranty.

While you cannot use a tie-in sales provision, your warranty need not cover use of replacement parts, repairs, or maintenance that is inappropriate for your product. The following is an example of a permissible provision that excludes coverage of such things.

Example 2: While necessary maintenance or repairs on your AudioMundo Stereo System can be performed by any company, we recommend that you use only authorized AudioMundo dealers. Improper or incorrectly performed maintenance or repair voids this warranty.

Although tie-in sales provisions generally are not allowed, you can include such a provision in your warranty if you can demonstrate to the satisfaction of the FTC that your product will not work properly without a specified item or service. If you believe that this is the case, you should contact the warranty staff of the FTC's Bureau of Consumer Protection for information on how to apply for a waiver of the tie-in sales prohibition.

We may have opened a huge kettle of fish if no one else has looked into this already. Has anyone that you know of? If so, what was their result if they challenged this requirement? Did they demonstrate to the FTC that their product was specifically required to meet the demands (in this case the oil)?

This is good!

James,

I'm glad that looks like it will help. Please share with us how it goes for you.

The first time I heard this it was from Drew Troyer of Noria when we worked together on some lubrication consulting work. Drew might be a good resource on any success stories, but you won't likely find him commenting on this message board.

Rich Wurzbach
MRG Power Labs
rwurzbach@mrgcorp.comMRG Power Labs

James,
Ask the compressor manufacturer to put something in writing. My guess is that they won't do it. These companies are well aware of the Moss-Magnuson Act. They huff and puff and talk about warranty this and warranty that, but in the end, the Moss-Magnuson Act wins out.

quote:

Originally posted by Joe Petersen:

You seem to have a failure history for these compressors. It seems easy to forecast the probability of failure with their oil.

Joe,

How one can reliably model probability of a compressor failure based on, likely, a small sample size obtained while operating in a single plant. Isn't this vendors' responsibility (or just a good practice) to supply equipment reliability data to their customers at the time of purchase?

Dave

dave

If there is redundancy, the course of action is clearer.

Why the oil is proprietary, couldn't you find equivalent oil?

Btw, what is the allowed oil content in % in the compressed air?

Wasn't this warranty issue considered during the purchase?

I am not aware of an air compressor manufacturer that fabricates his own oil. Didn't see any compressor called esso, texaco or shell lately Even Caterpillar don't assemble their own batteries or filters.

Probably the "warranty conditions" are written by their beanies. Does the warranty covers that they are responsible for the maintenance/operation of your compressor? If I could outsource all the headache to the vendor, I wouldn't even care if they put water to lubricate it. In this case I would lease the compressor from the OEM

quote:

Originally posted by Hans:
James,
Ask the compressor manufacturer to put something in writing. My guess is that they won't do it. These companies are well aware of the Moss-Magnuson Act. They huff and puff and talk about warranty this and warranty that, but in the end, the Moss-Magnuson Act wins out.

Hans:

I think I will do that. I'm going to see about contacting our compressor vendor rep and see if he can produce anything for me.

Josh:
I would like to see any plant or mill with air compressors that are not needed, or running. The fact is that that situation just doesn't exist. Over the course of time, air is a more needed utility. If an air compressor is not needed, it is shut down for brief periods of time, and then later that day, a different shift uses more air, or for blowdowns, or cleanup, etc. Air is the most expensive utility, and having air available is considered mission critical. All are running, all the time.

The warranty issue was a consideration, but the cost of the oil probably wasn't. The life cycle cost of the equipment did not have the oil cost factored into it - I would imagine. I wasn't there when all this started, but by all indications in 20 years our oil costs would be (for just the air compressors) is $2,225,000 Anyone want to tackle that in your plant? I call it low hanging fruit.

By the way, the compressors have been in the mill for over 20 years, just new models purchased and added to the mill when additional air was needed.

James,

Compressor manufacturers don't manufacture lubricants. They also typically don't use the big boys (exxonmobil, chevron, etc) for "their" oil. They typically contract small companies that you've never heard about which exclusively manufacture high-end oils for specialty (such as compressor, vacuum pumps, etc) applications, which are all re-labelled by the equipment OEMs. That's why you haven't heard of them, some don't even retail, they exclusively contract with the OEMs. I would contact several lubricant suppliers with a generic specification, and let them compete to show you 1) how their proposed product will technically meet the equipment, environment and application requirements for your compressors (or even exceed), and 2) the best lifecycle costs for this requirement. When you let them know how much you are consuming, they can price accordingly to the anticipated sales.

I have provided generic specifications for companies as a consultant in the past. It typically requires looking closely at the vendor manual, and doing a little research to boot to ensure that all design considerations will be covered in the chosen lubricant. You can also shortcut that process by just telling the lubricant suppliers what equipment you have and letting them recommend one of their products, but you typically don't have as much leverage in product selection and price negotiation.

The other consideration in the cost of running a compressed air system is waste. Have you performed an ultrasonic inspection to identify and correct system leaks? The average plant wastes 20-40% of their compressed air through leaks until they agressively adopt a leak identification and correction program. Also, if your compressors aren't calibrated properly (valve adjustment for proper modulation) or worn, further waste exists. I would also suggest regular oil analysis to be sure the compressors are not wearing abnormally, and getting a handle on oil condition. Good luck.

Rich Wurzbach
MRG Power Labs
rwurzbach@mrgcorp.com

James,
To further Rich's comment about paying attention to the other costs of an air system (namely leaks), here is a link to an article called "Stop the Bleeding", which was the cover story of the May 2006 issue of Plant Services magazine. http://www.plantservices.com/articles/2006/132.html

I know that most of the small oil vendors can give a different (better) service then some of the big boys (especially for a small consumer), we had that discussion in another thread

I think of it this way: would you submit yourself to robbery if it was the oil of your own car, and you were paying the bill?
It is an insult to the statement "the customer is always right"

Jim, my comment was based on there was redundancy either standby compressor or excesss capacity of compressed air. It looks like you want all of them to run simultanously.

Normally the air compressors do not specify any lubricant, just the specs given to be met by the customers.

James F.
Seems to me that these air compressors are using too much oil. Because you are purchasing from the same vendor that carries the warranty would they care how much leakage the compressors would have. Seems like a conflict of interest. Just my opinion!

The oil is being pushed out in the system? I coordinated the PM program for some units a few years ago. At this plant we had 2-200 HP and 1-250 HP air compressors and can't remember ever using that much oil. Some usage is expected but that just seems a little heavy.

If my numbers are coming up right, (150-5gal pails...$750x150=$112,500.... 150x5=750 gal...750 gal/9 units = 83.33 gallons of oil per year per compressor. WOW! I had to check this several times. Depending on the size of these units that could be an oil change every year without draining and refilling? This does not sound right? Who is doing the PM on the units and are all the PM items being taken care of during the PM's?

OK. Now the question is, 9 air compressors? Are these units process specific? Was air compressors added without new processes being brought on line? Not knowing your situation makes me ask if your systems get air leak surveys periodically. Typically air systems will have somewhere around 25 to 30 percent leaks (industry number) without the survey and some places will continue to add air compressors to compensate. Not knowing I had to ask. If this was the case then sealing up these leaks could allow the shutdown of a compressor or two. Thought I would bring this up as this has happened many times before.

I would look into the PM steps and make sure the separators and all controls are functioning properly. If oil usage could be reduced then stay with the same oil. If not consider changing to less expensive oil. The math tells the story. It would seem you are just paying for the cost of new compressors over a longer period of time without getting the new air compressors? At some point you will still have to purchase a new air end.

Just my 2 cents. Good Luck!
Don