Viewpoint: Maintenance Outsourcing – New Beginning Or Nightmare?

EP Editorial Staff | July 1, 2006


Stephen Rahr, Vice President, Service Processes, ABB Process Automation

The story goes that outsourcing began when a farmer’s ox ended up in a ditch on the way to market. Hopelessly stuck and exhausted from trying other alternatives, the farmer had no choice but to hire someone else to get his produce to market.

Once looked upon solely as an “ox in the ditch” option for companies in trouble, outsourcing of services has matured into a strategic tool for strong companies looking to become even better. As outsourcing has proven successful in non-core functions such as food services and facilities management, confidence has grown and business leaders are increasingly ready to entrust third parties with mission critical functions including IT, logistics, manufacturing and R&D.

Facing global competition, aging assets and a skills shortage, it’s no surprise that companies also are looking seriously at maintenance as a candidate for outsourcing. Indeed, the potential benefits are attractive: increased reliability, reduced inventories, access to resources, improved safety, higher OEE and lower costs. The value proposition to executives is compelling.


Knowing that maintenance outsourcing may be coming soon to a facility near you, the question becomes: “What do you do when you suddenly find yourself at ground zero in an outsourcing deal?” The answer? “Don’t panic!”

Outsourcing arrangements come in all shapes and sizes.

At the consulting end of the spectrum, a company determines that maintenance is a core competency and invests in consulting to further develop in-house capabilities. For a maintenance professional, this is good news. Aside from the disruption of meeting with outside consultants, it’s business as usual, with the upside benefit of improving the effectiveness of your maintenance programs.

Equipment management contracts represent the middle ground in maintenance outsourcing. In this case, an expert, often from the OEM, is hired for the unique knowledge, specialized equipment or economies of scale required to keep specific types of equipment operating safely, reliably and cost effectively. Properly executed, these contracts link the supplier to equipment performance and free in-house resources for other assignments. Again, a good thing.

Now for the nightmare–the one where you come to work and find your employer plans to outsource the maintenance function. It’s natural to dwell on the uncertainty, but focusing on what you know puts things back in perspective. You know that maintenance is still a critical function, you know the process and equipment better than any outsider, and you know maintenance and reliability skills are in short supply.

Without question, an incoming maintenance company is going to need skilled people to meet their performance commitments. So, even in the most feared scenario, the likely outcome is a new employer; one that is committed to maintenance and reliability as a core competency. With this commitment come investments in tools, training and advancement opportunities.

The degree of change and the impact on the individuals vary with the scope of the outsourcing agreement. In every case, for those willing to look, there is opportunity and a new beginning to be found. MT

E-mail: Stephen.Rahr@us.abb.com

The opinions expressed in this VIEWPOINT section are those of the author, and don’t necessarily reflect those of the staff and managment of MAINTENANCE TECHNOLOGY magazine.




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