Efficient Plant June 2020 - 24

department | on the floor
Answers to questions
facing today's reliability
& maintenance
professionals

Outsource? Q
Internalize? A
It Depends.

Is it better to outsource
or internalize maintenance
functions?

Dr. Klaus M. Blache
and Dr. F. H. (Skipper) Yocum
Univ. of Tennessee Reliability and
Maintainability Center (RMC)

24

| EFFICIENTPLANTMAG.COM	

Why outsource? The plants of the
first company are located in industrial regions where many skilled workers
are available. The company's maintenance
structure is a maintenance manager with
planners and subject-matter experts
(SMEs). They determine routine- and
corrective-maintenance requirements.
Planners and SMEs develop detailed work
plans, including skilled labor, tool, and
parts requirements. The planners work
with operations and the contractor to
schedule the work.
SMEs are available to support the contractor, if needed. The contractor provides
the maintenance crew, a combination of
regular/reactive/additional workforce, as
required according to the schedule. The
contractor must meet performance KPIs
and follow the company's safety procedures. The contract is bid annually to
keep cost competitive. Benefits given for
this approach were: contractors provide
the skilled workforce, safety and skills
training, and human-resources function,
all of which reduce the company's burden.
In addition, the contractor can share these
costs over several companies.
The second company is a global steel
company, headquartered in Latin America.
They have a similar maintenance approach
(maintenance leader, planners, and SMEs
supporting outsourced labor). They also
benefit from advantages provided by the

country's labor laws and union requirements. Both companies are pleased with
the outsourced approach and have good
maintenance performance. These companies believe the advantages outweigh
paying a higher hourly maintenance rate.
The other extreme is to internalize all
maintenance functions and skills. This
approach is typically used for proprietary
reasons, primarily keeping equipment and
process knowledge confidential to maintain competitive advantage. One chemical
company used all internal maintenance
on a new process and contractors needed
non-disclosure agreements, were highly
supervised, and limited to specific equipment or applications.
Approximately 80% of companies use
a combination of internal and external
resources, with criteria such as:
	 Is the work or application routine
enough to justify the investment in the
skills and equipment, compared with the
cost for outsourcing?
	 Do regulatory requirements dictate an
external licensed contractor?
	 Is an OEM or licensed contractor
needed to perform work to maintain
warranties?
In recent years, as vibration analysis,
thermography, ultrasound, and motorcircuit analysis became proven approaches
to predicting failures, companies tended to
contract the maintenance work. The cost to
buy the monitoring equipment, train
employees to properly use it, and analyze the data was too high. Too often the
reasoning was, "Why train our technicians

JUNE 2020


http://www.EFFICIENTPLANTMAG.COM

Efficient Plant June 2020

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