Maintenance Outsourcing: Benefits and Risks

Is it worthwhile to perform maintenance activities by your own team or are there strategic reasons to outsource maintenance activities?

There are certainly reasons for both.

Looking at the Brazilian industry, ABRAMAN’s 2017 National Document brings a brushstroke of what may be part of the reality:

• On average, 33% of the maintenance teams are outsourced;
• 19% of maintenance costs are allocated to outsourced labor;
• 59% of the maintenance workforce has a high school education (they are technical workers).

From these three indicators, one can infer that one third of the maintenance activities in Brazil, for the scope analyzed, are outsourced. That, on average, the costs of outsourced labor are lower than their own labor. And that most of these maintenance workers have a technical profile.

SOME OF THE REASONS TO OUTSOURCE MAINTENANCE ACTIVITIES

An industry may have different approaches to outsourcing a service. These include:

• Desire to structure or review maintenance practices through a proven expert;
• Change the maintenance level, that is, add preventive and predictive techniques when the focus is on corrective maintenance;
• Specialized services whose qualification does not make sense to be available in the company’s framework;
• Perform predictive techniques such as oil analysis, vibration analysis, thermography, among others;
• Large scale demands, such as a general stoppage;
• The unavailability of skilled labor;
• Training of own menpower.

The industry can choose to maintain an internal maintenance team and partner with an outsourced company to perform specific activities. Depending on the size and maintenance strategy adopted by the industry, hiring third parties can solve specific issues, such as controlling costs and providing flexibility in sizing the team for the work to be performed.

However, one must always pay attention and take care when choosing and hiring outsourced services. Without it, the benefits in terms of quality and costs can be easily lost.

When hiring an outsourced service, the criteria for quality (for the contracted activity), price, experience and competence, technology used, and deadline for execution must be evaluated. In addition, it is worth checking its structure and suitability as a guarantee of its capacity to fulfill the contract.

SOME ADVANTAGES AND CAUTIONS WITH OUTSOURCING

Besides the already mentioned advantages, such as potential cost reduction, hiring specialists and flexibility in team dimensioning, we can also list other advantages of outsourcing maintenance:

• The opportunity to focus on the organization’s core business;
• Increase in the quality of the service performed and the reliability of the machinery;
• Exposure and insertion of new technologies;
• Managers and employees potential time optimization (with the reduction of work overload);
• Counting on more experienced teams, with specific technical knowledge;
• Extra help in developing internal competencies.

Before outsourcing, it is important to analyze some of the potential risks and cautions:

• Find service providers with proven training for the activity to be performed;
• Establish a good contract, with objectives, specific responsibilities, and expected results;
• Define whether and under what conditions the third party allows the subcontracting of service providers;
• Does the relationship to be established provide an environment of mutual collaboration?
• Is the contractor thinking about a long-term relationship?
• Qualify the degree of dependency that will eventually be generated, including analysis of risks arising from it.

In both situations, in which the activity is performed by an in-house or outsourced team, it is necessary to have comparison parameters. Without knowing the rework and accident rates, for example, there is no way to know if outsourcing has generated the expected benefits.

Based on these considerations, it is suggested that industrial companies have their own managers who know the best maintenance practices, who maintain, in addition to indicators, a sharp critical sense.

The maintenance manager must keep up with the latest or relevant technologies and understanding of the application in his environment to extract the best benefits for the organization.

Predictive maintenance, according to ABRAMAN data, still has very limited application in Brazil (only 14%), and when applied it is managed by third parties. The Dynamox Solution opens the possibility for the industry to apply continuous monitoring of assets, through its own team or with the help of a third party.