Effective equipment maintenance helps manufacturers strengthen their competitive position, but it’s not a core business function. Time spent caring for assets is time that could be spent growing the business. That’s why increased focus is one of the top reasons for outsourcing maintenance.
Outsourcing refers to having a third-party provider manage plant maintenance operations. Beyond the strategic benefit, other reasons for outsourcing are to reduce costs, gain access to specialist expertise and technologies, combat labor shortages and improve service performance.
What sets maintenance apart from other business process outsourcing is how deeply asset care is integrated with operational performance. Asset knowledge is a core aspect of effective maintenance, making knowledge transfer one of the biggest concerns to address when moving to outsourced maintenance services.
This blog explains how manufacturers approach the transition to outsourced maintenance. While covering benefits and the importance of finding the right outsourcing partner, it emphasizes the planning and management required for a successful transition. On completion, the reader will know more about in-house vs. outsourced maintenance.
Assessing internal maintenance capabilities
If maintenance is hindering the achievement of business goals, it’s a problem that should be addressed. Particular pain points to look for are:
- Poor operational efficiency, as evidenced by subpar OEE numbers
- Rising maintenance costs
- High maintenance team turnover and problems filling open positions
- Lack of expertise with new manufacturing equipment and maintenance technologies (especially IoT/Industry 4.0 advances like condition monitoring and predictive maintenance)
Having recognized the opportunity for improvement, take a closer look at current capabilities. Do this with an internal audit, ideally while considering long-term business goals.
The internal audit should gather data on maintenance performance. Important aspects are asset health, team capabilities, the size of any maintenance backlog and maintenance KPIs such as Mean Time to Repair (MTTR).
Maintenance-related business goals include available capacity and digital transformation in manufacturing. For the former, lower downtime can reduce the need for capital expenditure. With the latter, maintenance must be ready to support the digital transformation technologies many businesses view as being core to their manufacturing strategies.
Selecting the right maintenance partner
The types of manufacturing equipment used are closely tied to specific products and processes. Thus, while prospective partners with facilities management expertise will understand general maintenance goals and challenges, they may lack the specialized knowledge required. Therefore, the primary consideration when evaluating potential maintenance partners is relevant industrial experience. Additional criteria against which to evaluate potential maintenance partners are:
- Understanding of compliance issues in your industry: Knowledge of licensing, certification and Good Manufacturing Practice (GMP) are all essential.
- Track record of performance improvement: They should be able to identify cases where they raised availability, reduced costs and cut spare inventory.
- Scalable capabilities: You need a partner to grow with you.
- Understanding of your approach to Lean, Six Sigma, TPM, and digital initiatives: You want to avoid misalignment on the plant floor.
- Culture and operational alignment: Their style, attitudes and ways of working should not clash with yours.
Comparing potential partners requires work. Request and follow up on references, and speak with both current and former clients. Visit their facilities to observe how outsourced maintenance is embedded into daily operations and learn how they handle change management. Consider starting with a pilot project, allowing for a quick exit with minimal consequences if the partnership doesn’t work out.
Planning the transition strategy
Thorough and detailed planning is essential for a successful transition. This should cover activities prior to the transition, the transition itself and follow-up or post-transition activities.
Pre-transition planning starts with establishing the objectives and scope. Will all maintenance activities be outsourced, or is there a desire to retain some functions or support some departments in-house? Will there be a pilot study to identify potential challenges and develop solutions without putting operations at risk?
Many manufacturers include establishing a Service Level Agreement (SLA) with the vendor as part of pre-transition planning. These typically include KPIs against which performance will be measured. Other elements of pre-transition planning are:
- Establish a timeline and milestones: A phased approach is often preferred.
- Define roles and responsibilities: This includes Maintenance Managers and Planners as well as those directly involved in maintenance tasks.
- Plan and initiate training: Members of the maintenance service provider team need to know about the equipment for which they will be taking over responsibility.
- Risk identification and planning: Develop plans for protecting operations against any problems or glitches.
- Develop a communications strategy: Outsourcing can be a difficult experience for company employees, but honest and open communication helps prevent unnecessary stress or confusion.
As the transition gets underway, communication becomes even more important. Responsibilities will gradually shift, with new personnel taking over established processes.
Monitoring and follow-up should form the core of the post-transition plan. This is to verify the expected benefits are being realized, and to identify and address any problems emerging during the process.
Onboarding and implementation
These two activities are at the heart of the transition process. Onboarding refers to bringing in new maintenance technicians or transferring existing technicians to the service provider. Along with training delivery, documentation not in the CMMS will also be transferred.
Implementing the transition entails site walkthroughs, asset tagging, system audits and instruction in preventive maintenance schedules.
During the weeks following the transition, performance should be closely monitored and any problems identified quickly. Transparency is essential, and solutions should be addressed collaboratively by both the provider and the client.
Benefits realized over time
The work needed in the days following a transition can obscure recognition of the benefits. Over time though, and as the new team and any revised processes bed-in, they will become clear. These include:
- Improved uptime and lower levels of unplanned downtime: Savings are often seen in overtime working, along with deferring capital expenditure planned for capacity expansion.
- Tighter cost control: The provider’s focus on maintenance expenses and potential savings in purchasing typically leads to significant overall cost reductions.
- Adoption of Industry 4.0 technologies: These include condition monitoring and a predictive maintenance strategy designed to reduce downtime and improve operational efficiency.
- Extended equipment life: Increased service flexibility helps deal with peaks in workload and avoids deferral or omission of preventive maintenance tasks.
During this post-transition phase, both parties should monitor results and identify any problems and opportunities to improve. As the new team becomes familiar with the equipment, their ability to support it will grow and overall maintenance maturity will rise.
Above all, both the client and the service provider should remain committed to continuous improvement and maintaining a partnership mindset. on with existing control systems, current transformers or PLCs. Complex integration can lead to missed data, which may put operations at risk.
Ensure a smooth transition to outsourced maintenance
As many manufacturers have already discovered, outsourcing maintenance operations is a way of upgrading asset management practices and improving operational efficiency while freeing resources to focus on core business activities. However, this approach requires careful planning and preparation before implementation.
Transitioning to outsourced maintenance should be seen as a strategic investment in uptime, performance and workforce support. With the right planning and by selecting a suitable provider, companies have been shown to experience a seamless shift and long-term operational gains.
ATS has over four decades of experience in industrial maintenance management and works with process industry and discrete manufacturing clients in industries from aerospace to tire and rubber. If you’re looking for outsourced maintenance support, contact us to learn more.
