Truth is in the Details ™

The Case of the Lousy Lube

Synopsis:
Another case of a tiny, untested product change producing disastrous results.

 

 

 

 

 

 

 
Background:
The machine shop in a large manufacturing company saw normally high yield rates drop precipitously over a period of weeks.

 

 

 

 

 

 

Teardowns of a few machines showed lubrication failure but further analysis showed that the lubrication failure resulted from lube oil congealing in oil passages thus blocking the flow of oil to lubrication points.

 

 

 

 

 

 

Assignment:
TI was requested to determine the cause and extent of damage, proper repair procedure, and commercially reasonable cost of repairs or replacement equipment.

Analysis:
TI met with representatives of the machine manufacturers and concluded there was no alternative but to tear down the machines to bare castings so that drilled oil passages in the castings could be physically swabbed to remove the gel. The process took 14 months and $2 million, and TI oversaw the teardown and documented the damage to each of dozens of machines. In order to maintain the owner’s production schedules, $1 million was authorized for rental machinery to stand in for machines in teardown. TI then analyzed hundreds of thousands of lines of the owner’s Excel production data to differentiate background levels of scrap, direct labor inefficiency and indirect labor from incremental increases due to machinery problems resulting from the bad oil. TI arranged for and oversaw appraisal of the involved machines to determine the change in machine value resulting from the teardown and repair project. Then, TI worked with forensic accountants to assist in determining the loss of income resulting from the machine downtime. The cause of the oil degradation was found to be an unauthorized oil additive substitution by the oil formulator and subrogation was pursued.

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