15/12/2020 How to Negotiate a Lubricant Supplier Agreement





Published by 

Like 8 Shar Tweet  Print

How to Negotiate a Lubricant Supplier

Agreement
Noria Corporation

https://www.machinerylubrication.com/Read/2313/lube-supplier-contracts 1/9
15/12/2020 How to Negotiate a Lubricant Supplier Agreement

In this competitive economy, we are all doing what we can to reduce costs, improve uptime and
maintain reliability. One of the ways that industrial facilities are coping with the economic meltdown is
to negotiate new contracts with new lubricant suppliers in hopes that the new deals will have more
savings built into them.

Often, the name of the game when sourcing new lubricant suppliers and writing new contracts is
leverage. What's your annual lube consumption? Is this a corporate contract or is it applicable to one
plant? Buying power always comes when negotiating large volumes. The more demand for product on
one contract, the more leverage you'll have overall.

Size Matters
Obviously, the most maneuverable contract is the corporate contract. If all of your plants in all
divisions have lubrication needs that can be covered by a single supplier, that supplier is likely to offer
deep discounts based on the total annual consumption as a sum of all the plants. Your buying and
negotiating power is the strongest in this situation.

If there are divisional needs to seek a new lubricant supplier, this also can prove to be a powerful
negotiating tool depending on annual need and the number of facilities involved. It's important to seek
a supplier that can provide you with as close to 100 percent of your lubricant needs as possible.
Committing to a single supplier not only helps when negotiating contracts but also aids with inventory
and procurement.

Local contracts have the least negotiating power in most situations. Unlike the other two scenarios, in
this case, your facility would likely deal directly with the local supplier to arrange the best deal for a
single plant. The other scenarios would see your company's corporate procurement team deal directly
with the corporate sales team of the lubricant manufacturer.

Separate and Not Equal

Price and delivery expectations aside, the most important thing to remember is that the reliability of
your equipment is paramount, and the need to ensure that the appropriate product gets into the

https://www.machinerylubrication.com/Read/2313/lube-supplier-contracts 2/9
15/12/2020 How to Negotiate a Lubricant Supplier Agreement

machine cannot be overstated. After the deal is done, either corporately or locally, you need to begin
swapping your current lubrication products for the new supplier's products. When changing lubricant
suppliers, it is important to recognize three categories of product equivalents.

Equivalent products are considered equal in the areas of lubricant type (anti-wear, extreme
pressure, compounded, etc.), ISO Viscosity Grade (viscosity at 40 degrees Celsius), base oil type
(synthetic, petroleum, semi-synthetic), additive package and other special properties, if
applicable.

Crossover products are not considered to be equal in all areas, but they will do the job if one or
more compromises can be made. One or more of the areas of lubricant type, ISO VG, base oil
type, additive package and other special properties, if applicable, may not be the same. In many
cases, the crossover lubricant will meet the criteria and lubricant requirements of speci c
components, but it should not be used as a plant-wide global change. Crossovers are typically
recommended as a result of the new supplier not having a truly equivalent product available.
Synthetic upgrades will also fall into this category by de nition.

Not-equivalent products are not equal and should be considered miscalculations from the new
lubricant supplier representative or whoever was providing information on product selection.
Further consideration is required for lubricants that fall into this category.

Is It a Match or Not?
The challenge with changing from one supplier's product to another is being con dent that the correct
products are currently in place. If you have systems currently using inappropriate products, the
supplier switch will only perpetuate the use of an incorrect product.

To help ensure that you have the correct product in place, it is always recommended that as products
are gradually transitioned from one supplier to the next, you reference your Lubrication Process Design
database to clarify the speci c product requirements vs. the general requirements of one product to
another product. If a current lubrication database does not exist, you must systematically work
through each component in the plant and determine the correct lubricant for the application.

When selecting component-speci c lubricants, it's important to adjust for operating temperature,
ambient temperature, humidity and contamination, vibration, and duty cycle, trying not to generalize
lubricant speci cations for component categories.

It is also very important to consider the compatibility of the current product and the replacement
product. Although replacement products may share similar attributes, they may not be compatible.
https://www.machinerylubrication.com/Read/2313/lube-supplier-contracts 3/9
15/12/2020 How to Negotiate a Lubricant Supplier Agreement

Flush and Fill

When changing lubricants from one product to another, it is a good idea to consider them less than
fully compatible, though the supplier may consider them compatible based on past experience.
Without proper compatibility data, it is not recommended to use one product on top of another. At a
minimum, armed with compatibility data from the lubricant supplier, a complete drain is required on all
uid systems. For grease systems, a complete purge is recommended for housings that are equipped
with vent or relief plugs. For grease systems that do not have appropriate venting or relieving plugs, a
manual removal of grease is recommended before the new product is used.

Lubricants considered to be crossovers require a little more attention than a simple drain and ll.
When product upgrades from mineral-based to synthetic products are recommended, a system ush
using the new product is required. The system should be drained of the original product, lled with the
new product, operated under normal operating conditions for 12 to 24 hours, drained and lled again.
Oil analysis should be done after the last ll to compare against a new oil baseline.

When changing current products to competitive products known to be incompatible, it is

recommended that a complete drain and ll with a system ush be performed, using the supplier's
recommended cleaning solvent, to minimize the risk of cross-contamination.

Notes and Reminders

Generally speaking, it's always best to request compatibility data from the lubricant supplier
when that supplier claims two products are "compatible" or "fully compatible".

Compatibility data for greases should conform to ASTM D6185 and include test results on
product mixtures for consistency, dropping point and shear stability. Compatibility data for oils
mixed at 50/50, 90/10 and 10/90 should include test results for demulsibility, foaming tendency
and stability.

Approach all product crossovers as not fully compatible. Using one lubricant manufacturer's
product on top of a competitive product is never recommended. In most cases, a complete
lubricant drain is required at a minimum. In critical cases, such as compressors, a ush also is
recommended.

Follow the recommendations found in your Lubrication Process Design database for component
speci c lubrication requirements when changing lubricants to ensure the appropriate product is
put into service.

Also, for critical and questionable lubricant changeouts, con rm everything with oil analysis.

https://www.machinerylubrication.com/Read/2313/lube-supplier-contracts 4/9