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Non-core activities can be simplified and improved with outsourcing

Feb. 18, 2003
Can outsourcing simplify and improve non-core paint shop and chemical management activities?

For a manufacturing facility to stay ahead of its competition, it must focus resources and employees on making high-quality goods and services the market wants. In many cases, non-core paint shop and chemical management activities, important support activities not directly involved in production, often are viewed as a headache, fall by the wayside or are performed at below optimum levels.

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Because so much attention is focused on manufacturing, often there's little time to attend to non-production activities. However, they are a critical part of a plant's assembly line and have the power to slow down and even stop production.

The trend of outsourcing these activities which provides numerous financial and environmental benefits is becoming increasingly popular within automotive manufacturing and is spreading into a variety of other industries.

Savings realized by customers that have implemented an outsourcing program for paint line cleaning.

Is outsourcing worth it?

A successful outsourcing program revolves around a plant's specific needs. Outsourcing activities, such as paint detackification, water treatment, spray booth balance, paint system cleaning, logistics and warehousing, offer a competitive advantage by enabling the plant to focus on its core competencies, in turn, improving quality and throughput and reducing total cost.

Depending on the program's scope of work, outsourcing many paint shop tasks can generate other important benefits, including a cleaner environment; a single point of contact for manufacturing, accounting and purchasing; and continuous process improvements. Most plants begin witnessing these benefits almost immediately after implementing their paint shop program. Aside from these benefits, an established outsourcing program allocates adequate resources to paint shop practices that may not have been optimized before.

Although outsourcing these activities might seem a bit overwhelming at first, it's a manageable concept. An experienced outsourcing service company will guide you through every step of the process to ensure a smooth transition of the paint shop responsibilities and ensure the program provides your plant with the greatest benefits.

Taking the first step

When a manufacturing facility decides to outsource its paint shop activities, it must identify areas that outsourcing would improve. Managing paint shop processes, chemical management, securing paint shop maintenance supplies, water treatment, general cleaning and filter management are among the activities often considered for outsourcing.

Whether these or other activities come to mind, there is time-consuming, inconvenient, costly work inside every manufacturing facility's paint shop, characteristics that make the tasks prime outsourcing candidates. To help determine which activities are best to outsource, the services company should conduct an audit of the current paint-related processes and apply its expertise and experience to predict savings. This formula identifies the greatest potential for improvement. The audit's complexity depends on the number of candidate tasks chosen for evaluation. While audit details are usually considered proprietary, an audit aims to evaluate the potential for total cost savings by performing a detailed cost analysis of a plant's existing processes.

A typical audit requires participation from the manufacturing facility and its employees to help the service provider understand the plant's background; the material, manpower and equipment used in current procedures; the processes in place; and associated costs. Supplying this information helps the service provider identify the best course of action for the plant.

Outsourcing certain services can help plant employees who must deal with many non-core activities and suppliers.

Making the transition

After the service company analyzes the data, it should be able to compare the total cost to outsource the activities to the plant's current total costwhich reinforces the benefits of outsourcing the chosen tasks. The services company, together with plant personnel, then can define the program scope.

The next step is to produce responsibility charts that define tasks for each area. These documents state clearly which workers are responsible for which tasks during each program phase.

After the manufacturing facility finalizes the job specifications, a transition period is required before implementing the program. This varies with the size and complexity of the program. Regardless of the time the transition takes, it is critical it be seamless to prevent interrupting production.

During the transition period, the service company recruits and trains qualified personnel. They, along with an experienced engineering and management staff, remain on site to carry out the program. The transition also provides workers the opportunity to familiarize themselves with the plant and its operations.

Of course, the manufacturing facility has final approval over the service provider's team members. Once approved, the team participates in training sessions on safe equipment and chemical handling associated with maintaining an effective paint shop. The workers also team up with plant personnel and tier-two suppliers to ensure adherence to proper operating practices and to resolve any other concerns.

Outsourcing paint shop activities simplifies manufacturing processes and provides a single point of contact for manufacturing, accounting and purchasing.

Avoiding surprises

As with any transition, one should expect the unexpected. The best way to implement a paint shop outsourcing program, while minimizing production line disruption, is to structure a program that:

  • Details the program activities the service company is expected to perform.
  • Identifies each transition step from the time of program award to the service implementation.
  • Determines the expected duration of each transition activity.
  • Forms the service company personnel and plant employees who play a key role in the transition into a functional team.
  • Assigns each worker specific responsibilities to be managed once on-site.

This format keeps everyone coordinated and aids in implementing best practices that improve safety, quality and economic performance, while installing mechanisms for continuous improvement.

Continued maintenance is key

Once past the transition period, the service provider turns its attention to improving the program. The service company personnel are trained to look for ways to enhance the plant's paint shop operations and processes.

By measuring the program's success on a continuous basis, they can determine if the program is benefiting the plant as originally predicted. To do this, the plant's past history, current performance and best practices are compared to monitor the program's performance and to pinpoint processes that need to be improved.

Besides determining the program's performance level, the service company also provides additional training courses for employees in the event the plant changes its paint shop products or processes. This ensures employees are using the correct product and most efficient processes.

The future of outsourcing

Paint shop activities are just as important as the numerous other jobs involved in manufacturing saleable products. But, without enough manpower and expertise focused on these activities, a plant could spend countless hours on costly re-work.

Every manufacturing plant has unique needs and can enjoy the benefits of outsourcing paint shop activities. However, such programs shouldn't be designed using a one-size-fits-all approach. For this reason, it's important to work closely with the service provider to develop a custom program.

Establishing an outsourcing program requires time and dedication. But once it's running smoothly, employees can concentrate on building better products, enabling a plant to remain ahead of whatever competition remains.

Scott Follett is Global Director, Total Service Solutions at PPG Industries, Inc., Troy, Mich. He can be reached at [email protected].

Figures: PPG Industries, Inc.

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