In a mechanical process, parts move against each other or through the air. Friction between moving parts, and air resistance on a moving object, mean that work has to be done against these forces. This work does not make the object go faster. Instead it causes a rise in temperature, so the energy is dissipated by heating the surroundings.
This makes mechanical processes wasteful. For example, when a brake pad rubs on a wheel, the temperature of the brake rises. When a bicycle chain turns on its gears, they warm up slightly. In both cases some of the energy supplied is wasted as thermal energy in the surroundings.
We can reduce this waste. A lubricant such as oil between moving parts reduces friction, so less energy is dissipated as thermal energy. For any machine, the total energy supplied equals the useful energy plus the wasted energy. If a machine takes in 500 J and transfers 400 J usefully, then 100 J is dissipated as heat.