Ultrasound / Vibration Analysis

Is maintenance your core competency?

How to determine whether the responsibility for equipment reliability should be in-house or outsourced.

By Mike Bacidore, chief editor

The benefits of reliability-centered maintenance (RCM) are well-documented. Yet, despite the recognized advantages of optimized equipment uptime, many organizations aren’t quite there yet. Some simply don’t have the necessary resources to pull themselves out of firefighting mode long enough to monitor asset conditions and schedule maintenance with equipment health in mind. Some have chosen not to make healthcare of physical assets a core competency. But how does a company or a plant decide whether to contract services from an outside vendor, whether it’s for complete maintenance and reliability or it’s for specific services, such as vibration, thermography, ultrasound, or corrosion monitoring?

“Depending on what part of the maintenance services or organization that is under consideration for contracting, the steps may vary,” explains Stanley T. Grabill, CMRP, principal industry consultant, reliability and maintenance, Honeywell Advanced Solutions. “Based on experience in outsourcing inspection services for corrosion monitoring of vessels and piping systems, much of these activities are consistent through the decision process.”

Complex technologies require expertise and specialization, explains Joe Bruno, director, training and development, SKF USA. “Companies want to focus on what they do and making what they make,” he says. “Doing this in-house usually means asking people to take on responsibility for several technologies without the focus to become proficient in them. Contract MRO services allow companies to outsource these functions to people who specialize in these technologies, people who focus on them as a full-time career. These services are provided by someone who is using these technologies every day, gaining experience, and getting training as a full-time practitioner.”

The decision to outsource needs to start with a hard and honest look at whether your current maintenance program needs improvement, recommends Mark Cox, director of technical training and advanced systems at Advanced Technology Services. “It’s important early on that executive leadership supports the decision to consider exploring or outsourcing maintenance,” he advises. “Without the assurance and support of leadership, things can get derailed easily or often. At the heart of the outsourcing question is always whether maintenance, or specific services, is truly a core competency. A customer of ours says, ‘Nothing in my plant happens without the equipment running.’ If critical machines can’t produce product, business suffers. And this is the very reason outsourcing makes sense. ‘Important’ no longer means doing it internally. If maintenance is getting enough attention to sustain best practices and it’s recognized as being extremely important, then outsourcing must be considered.”

Mike Bacidore is chief editor of Plant Services and has been an integral part of the Putman Media editorial team since 2007, when he was managing editor of Control Design magazine. Previously, he was editorial director at Hughes Communications and a portfolio manager of the human resources and labor law areas at Wolters Kluwer. Bacidore holds a BA from the University of Illinois and an MBA from Lake Forest Graduate School of Management. He is an award-winning columnist, earning a Gold Regional Award and a Silver National Award from the American Society of Business Publication Editors. He may be reached at 630-467-1300 ext. 444 or mbacidore@putman.net or check out his .

An organization needs to collect the appropriate stakeholders and then identify and agree upon exactly what benefits they are expecting by contracting out maintenance services, says Andy Ginder, principal, Allied Reliability Group. “Are they looking for the vendor to provide them with lower costs, higher quality services resulting in better equipment OEE, or reduced labor relations issues?” he asks. “Identifying these items in advance helps establish criteria against which competing vendors can be evaluated and also creates a performance baseline.”

Sanjay Karve, director of innovation and transformation group, manufacturing, Tata Consultancy Services, recommends performing a risk analysis of the equipment. “At one end of the spectrum, where the equipment or process is unstable and the service providers in the market do not have the capability to service end-to-end, an organization should not source out the entire maintenance,” he cautions. “Rather, discrete services such as vibration or thermography, which are required to ensure continuous operation, should be procured. At the other end of the spectrum, under circumstances where equipment is stable and provides commodity services, and the capabilities of the service providers are very mature, the organization should consider contracting entire MRO services. Between these two extremes, the decision is driven more by internal core competencies and differentiation criteria. An organization should start by doing a comprehensive risk analysis to understand applicability of a strategy to an equipment or group of equipment. Once this is decided, standard procurement practices can be leveraged to contract the relevant services.”

Equipment criticality is the deciding factor, agrees Kevin Starr, research and development manager for process automation lifecycle services, ABB. “Automation systems are growing in complexity,” he says. “Investing in knowledge that is in-house may not be the best use of long-term maintenance dollars. Contracting with companies that have a proven track record for delivering service should be considered.”

Rick Devoe, director, services portfolio, Invensys, says expertise is at a premium. “It is harder for individual plants to find that talent,” he warns. “Relying on automation suppliers makes sense given their in-house technical expertise. Plant engineering should not have to worry about different types of maintenance or engineering functions. Their engineering efforts should be geared toward maximizing production.”

By the numbers

Several industry experts offered lists to help plants figure out whether to develop in-house maintenance expertise, to outsource certain functions, or to outsource the function entirely.

lead stan grabillStanley T. Grabill, Honeywell Advanced Solutions
7 Steps to Decide Who Does Equipment Maintenance

  • Step 1. What is core to the success of operations? Decide if the service is core or non-core to the success of the overall operation, both from production and HSE risk viewpoints.
  • Step 2. Engage your internal experts to be involved. Ensure there is an subject matter expert (SME)/highly competent plant staff member, or several, depending on scope, who clearly knows the specific subject area. These professionals must act as the quality assurance marshals on behalf of the company. Ultimately, the company SME is accountable for the contractor’s quality, performance, effectiveness, cost controls, and overall project management tasks.
  • Step 3. Gain buy-in from a cross-functional team. Prepare the arguments, not always financial, and socialize the HSE team, procurement team, and plant staff. Gain buy-in to proceed with preparing a scope of work by the SME and issuing requests for quotation (RFQs).
  • Step 4. Seek qualified contractors and requests for informations (RFIs). Assuming buy-in, the next most critical activity is finding qualified contractors. Assuming there are no time constraints, it’s wise to prepare an RFI before issuing an RFQ. Working with procurement, the RFI will enable a thorough examination of, say, four to six contractors to ensure their capabilities and personnel qualifications up and down the chain of command, including field techs, quality assurance program, management/coordination standards and safety records.
  • Step 5. Review RFIs and narrow down the selection. From RFI study, select at least three, but no more than five, potential bidders and issue the RFQ.
  • Step 6. Issue the RFQ. Partner with procurement to ensure quality and delivery standards are met.
  • Step 7. Summarize the bids and present to company stakeholders Your stakeholders can include the plant manager, maintenance manager, HSE manager, operations manager, human resources, and procurement. During the bidding process, some contractors have creative ideas to better suit the client’s expectations. Be sure to take time to exploit these in the evaluation process. Decision factors need to be articulated; financial/commercial is only one. Compare and contrast to current services in-house. Get feedback from stakeholders and continue until all decision factors are satisfied by the stakeholders.

lead max coxMark Cox, Advanced Technology Services
6 Questions About the Need for Maintenance Improvement

  1. How long would it take me to make the improvement?
  2. How much money and resources would it take?
  3. What is my ROI on the investments?
  4. Does this solution offer me flexibility?
  5. What is the likelihood of success from this effort?
  6. In doing all this myself, is it sustainable?

lead sanjay karveSanjay Karve, Tata Consultancy Services
3 Considerations When Deciding to Outsource All Maintenance or Certain Components

  1. How critical is that equipment from a perspective of competitiveness of the organization? Is the capability represented by the equipment creating a differentiation for the organization?
  2. How complex are the requirements for ensuring the required capability? What is the maturity of the capability that exists in the market to provide the required levels of service for the complete maintenance vis-a-vis internal competencies?
  3. How stable is the performance of the equipment or process? Does it require frequent attention or frequent adjustment?