On The Floor: Discussing Contract Services — Supply-Side Views

Contractors have definitely found their place in plants. Some facilities, in fact, seem to be using them for work that in-house maintenance teams don’t want to do.

W e recently encouraged EP Reader Panelists to discuss the topic of outside-service providers in industry (including use of both contractors and consultants). What an onslaught of replies that brought! Interestingly, a number of service providers happen to be members of our panel. With so many responses, we chose to divide them into demand- and supply-side views, and publish them in two separate installments. Last month, we shared end-user perspectives. This month, we present those of suppliers.

Here, again, are the questions we asked, followed by a number of responses (edited, as always, for brevity and clarity):

— Did their organizations (or, if they were consultants or other suppliers to industry, did their clients/customers) use contractors or contract service providers in the areas of reliability, maintenance, and/or operations?

— What specific types of work were these contract service providers doing, and could it be improved?

— What benefits or payback were being realized from the use of the contractors or contract service providers?

Retired Plant Manager and Consultant, Canada…

Plants that I managed and, later, my clients’ plants, used contractors extensively for a variety of reasons. A major problem, in some cases, was the lack of documentation, by the plant or by the contractor.

For example, electrical contractors would withhold circuit diagrams, preventing the plant from using another contractor, or paying a new one to cover ground already worked on. Other contractors would supply their own non-OEM materials or spares, leading to minor changes that made future servicing almost dependent on using those contractors again for what should have been simple stuff. Another difficulty resulted from the lack of continuity when contractors hired techs for specific plants, then let them go when those sites’ needs dried up. This was a significant problem when work involved a steep learning curve.

Most sites [in my opinion] benefit from external technical contractors when the need is occasional, and where a fine level of trust has developed between the client and service provider. If that trust is misused, however, plant performance can suffer in a big way. As any smart purchaser remembers, Caveat Emptor!

Maintenance & Reliability Specialist, Engineering Services, South…

Our organization has been growing as an asset-management provider and as such supplies services for reliability, maintenance, and operations. From my perspective in the trenches, and primarily on government contracts, it appears that service contracts can be more cost effective than maintaining the overhead costs associated with [totally] in-house workforces. I think one of the things driving end users to our company is our ability to share knowledge and skills across the enterprise. I have seen numerous examples wherein one of our contracts receives assistance from another of our contracts, which eliminates the need for the client to make a short-term hire or sub out the work.

Industry Consultant, International…

I am one of those contractors. Most of my assignments are sporadic. My clients simply don’t have the equipment-maintenance and -repair experience to solve basic problems, and besides, maintenance tends to be a stepchild to production management.

[As I see it], many contractors don’t follow up on the results [of their projects], nor interact with top management in the early stages. Senior management needs to be on board first for programs to really be accepted. While maintenance personnel are usually positive, they often use bad practices or have bad habits that need to be corrected to enhance project success.

The benefits of contractors in areas such as special repair techniques, lubrication, cost/benefit analysis, etc. are legion. Given the need to streamline operations and control costs, it’s not practical for facilities to have too many specialists on staff. Today’s technologies are too fluid to not use contractors and outside experts. For maximum efficiency, [it’s my belief that] more contract maintenance can be anticipated.

Industry Consultant, West…

All of my clients are using contractors to augment maintenance activities. I’ve seen this use increase quite a bit in the past five years. Some larger plants have contractors with a full-time, on-site presence. For smaller plants, the contractors come and go as the need arises. It’s been interesting to watch the transition from full in-house maintenance to a merged in-house/contractor paradigm.

Some operations are using contractors as an extension of their maintenance teams. At one location, contractors were paired with in-house personnel to ensure familiarity with the plant without increasing head count. Other plants only utilize contractors for more-technical work, such as code-vessel repairs or certified welding jobs. It also seems that some larger facilities are using contractors for work their in-house maintenance groups don’t want to do. 

One of most frequently mentioned benefits of contractors I hear is that a plant’s workforce can expand and contract on a moment’s notice, and do so without affecting the in-house maintenance teams. Retaining long-term employees and keeping the workforce size constant helps generate loyalty among in-house personnel, which is no easy task these days. 

When I still worked maintenance [in a plant], we resisted bringing in contractors, seeing them as a threat to our job security.  Today, that feeling doesn’t seem to exist. Contractors have definitely found their place in plants.

Industry Consultant, Northeast…

From what I’ve seen regarding contract-service providers, it’s a mixed bag with respect to reliability and maintenance. (I don’t know of any plant that has contract operations personnel.) 

Most big plants/companies have strong in-house PdM (predictive maintenance) training programs across the board, along with their own personnel to do reliability work. I do have one client who has partnered with a service provider to perform predictive monitoring and interpretation, but that’s because the site really doesn’t have anyone functioning as a reliability specialist. The smaller regional companies are about evenly split between doing their own PdM and having contractors conduct their inspections.

Since I don’t get deep enough into my clients’ corporate finances to understand their cost/benefit analyses, I can’t comment intelligently on the benefits they’re seeing from contractors. However, it seems that few of these sites are seriously looking at the cost of failures and outages. As a result, I think the use of contractors offers a significant potential for improving reliability at facilities.

Industry Supplier, Midwest…

We are a supplier of products and services to industrial customers. Some of our strategic partners do more on the service side and are seeing huge growth in the market, i.e., on-site filtration, dehydration, flushing, and the like. There’s a big demand for these services, as fluids are offering extended life-cycles based on technology, and end-user sites have limited experienced personnel, lack people to do these jobs, or don’t have the required equipment.

[As to the benefits from the use of contractors] it depends on whom you’re asking. As an industry supplier, however, we’re dealing with the same issues as end users: Do we hire lots of workers to have ready for the call, then hit a slow time, or do we wait for orders to come in and hire to meet demand? It’s a roll of the dice to be prepared. 

About the EP Reader Panel

The Efficient Plant Reader Panel includes approximately 100 working industrial-maintenance practitioners and consultants who have volunteered to answer monthly questions prepared by our editorial staff. Panelist identities are not revealed and their responses are not necessarily projectable. Note that our panel welcomes new members. To be considered, email your name and contact information to jalexander@efficientplantmag with “Reader Panel” in the subject line. All panelists are automatically included in an annual cash-prize drawing after one year of active participation.