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The need for a robust equipment and plant maintenance program is a given for manufacturing companies, but it’s less clear whether or not internal or external resources are better suited for the task. While the market for enterprise asset maintenance software is estimated to be about $1.5B, the total amount spent annually on production maintenance dwarfs that figure.
And since there are huge sums spent on labor to perform plant maintenance, companies should ensure they’re investing their dollars efficiently. Just like human resources and finance and accounting are outsourced, manufacturers should look hard at outsourcing maintenance if it’s seen as non-core.
AMR Research recently spoke with a company headquartered out of Peoria, Illinois, called Advanced Technology Services (ATS). Its primary business is providing factory maintenance and support for heavy equipment and component manufacturers. Spun out of the maintenance organization of a giant industrial manufacturer nearly 25 years ago, the company has about 2,000 employees and nearly $200M in annual revenue.
There are some novel aspects to ATS’s licensing and delivery model:
- Having flexibility within contracts in order to cut back on services when shifts and maintenance needs are reduced
- Writing contracts based on firm service-level agreements (SLAs) and guaranteed cost savings (if cost savings aren’t reached, future contracts are credited)
- Providing both factory maintenance services and IT services, such as desktop and server monitoring and maintenance as well as printer and peripheral management (and thus one vendor for your IT and plant equipment monitoring and maintenance)
As companies look to reduce total maintenance costs, improve overall equipment effectiveness (OEE), and proactively manage the issue of the graying workforce, outsourcing maintenance must be an option explored.
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