Can outsourcing improve efficiency?

Nov. 15, 2002
Plants outsource non-core competencies to improve and manage processes and implement leading-edge technology.
Changes in market conditions and customer demand have forced many plants to apply lean initiatives and develop more efficient processes. For maintenance managers, the directive is clear: find ways to do more with less.In recent years, managers have focused on reducing costs and shrinking the asset base to include only essential parts and equipment. While this has produced some benefits, the overall results have been mixed. That's because a formal process for assessing, planning, implementing and monitoring maintenance, repairs and operations (MRO) is absent. As a result, it becomes difficult to make continued, substantial gains.

A new perspective on outsourcing

According to a recent survey, limited manpower (53%) and budgetary restraints (47%) are the two biggest barriers in implementing a more comprehensive asset management program. Additionally, the majority of respondents are still doing reactive (40%) or routine/preventive (32%) maintenance activities.In the past, outsourcing has been associated with layoffs and large investments in programs that merely maintained the status quo, with no real improvements in efficiency and little, if any, return on investment. Today, plants across multiple industries are outsourcing non-core competencies to improve and manage processes and implement leading-edge technology.

Single-source solution and accountability

An outsourced MRO program can encompass a range of services, including: repairs, warranty tracking, inventory tracking, tool-crib management, and calibration/metrology tracking of equipment.The first step requires conducting an MRO productivity assessment. It focuses on inventory, repair and maintenance management and procedures. It helps determine the areas that can provide the greatest return on investment.[pullquote]The assessment includes conducting an installed-base MRO inventory. Many times, maintenance departments are shocked by the amount of redundant or obsolete spare parts inventory they carry.Inventory documentation makes it easier for plants to calculate MRO needs and determine corrective actions to improve spare parts inventory procedures and match part supplies and demand better.The next step involves working with outsourcing partners to assess their capabilities and the plant's specific needs to produce an action plan. It details areas requiring improvement and lists the functions best handled internally and those suited for outsourcing. Once finalized, it provides the framework for implementing and monitoring phases an outsourced MRO program.To ensure the program's success, the outsourcing partner should assign an experienced professional to work directly with the plant as an integrated member of the MRO team.The assigned individual serves not only as a dedicated asset, but also as a single point of accountability, which helps ensure that the plant's MRO program produces results and meets expectations.
Steve Stall is business manager of Rockwell Automation Global Manufacturing Solutions. He can be reached at (414) 382-4272.