Appendix Q: Contracting Out Work

Overview

This appendix provides a comprehensive analysis of contracting out work issues. This analysis is necessary because of the major trend of outsourcing, the fear technicians have that planning facilitates contractors, and the controversial nature of contracting disputes.

Bruce Hutchins of Lean SCM LLC (2005) says "For most companies, today's business model is simple: Core processes are retained, and noncore processes are outsourced." Whether or not maintenance is a core process, the fact that many companies do not consider it one is evident from the number of maintenance services they outsource. Just as companies compete to stay in business, maintenance organizations compete as well. They compete for the right to maintain company assets. They compete on the basis of being the best choice for company maintenance services. Contractors who would take over some or even all of the services offer considerable competition. Huge contractors continually approach senior management in large companies offering to perform their entire maintenance functions "better and at a lower cost." Furthermore, if the maintenance organization is competing, its individual employees are competing as well. Therefore, the issues involved in contracting out work are vital to maintenance personnel. Consequently, because maintenance planning plays an integral part in the strategy to make maintenance more effective and efficient ("better and at a lower cost"), this appendix serves an important role to address the interrelationships among maintenance, planning, and contracting out work. The message is clear; a company can make its own maintenance force better or have someone else do...