Contract Maintenance

One of the many well-worn avenues toward improvement and cost-reduction in the maintenance area is to use "contract labor." This allows the owner much greater flexibility, both in day-to-day operation and in the size and composition of the crews being used. Selecting a contractor and writing a contract, however, requires evaluating many factors.

To see how attitudes have changed, take a backward glance to the 1920s. Then, several of the major machinery manufacturers supplying the clothing businesses even had workshops dedicated to making their own special oil cans for internal use. In that environment, using internal labor was a valid solution. Today’s revalidated viewpoint appears to be that we should concentrate on our core products and skills; i.e., everything deemed peripheral that can be outsourced should be.

A second and less obvious reason put forward is that in a rapidly fluctuating market place, a manufacturing unit needs the flexibility to radically raise and lower its level of maintenance expenditure. This is true despite the fact that some senior executives are aware of, and accept the premise that, "a minor repair ignored today will eventually cost seven times more to fix later." Handling today’s cost-cutting problem takes priority.

Many of the comments made in this article might appear to be negative toward use of contract labor, but this is not the case. Our experience has been that well-managed contract labor forces have a flexibility that owner organizations cannot match, as well as—in most cases—a higher productivity with correspondingly lower costs.