How to choose between in-house and outsourced maintenance

By intouch posted 13 days ago

  
By Ross Moody, Director IPWEA FLEET

If your organisation is considering outsourcing fleet services or equipment, it is important that decisions are not simply based on upfront costs.

Outsource--In-House-sign-688744936_1258x838.jpegIt is essential that the fleet manager undertakes a comprehensive process to ensure they are making informed decisions. To complete this process, you must:

  1. Define the problem. 
  2. Identify limiting factors. 
  3. Consider the alternatives.
  4. Analyse the alternatives.
  5. Select the best alternative.
  6. Implement the decision.
  7. Monitor and evaluate the results.

Overall, the decision-making process is completely dependent upon the right information being available to the right people, at the right time.

For example, applying this process in a mechanical workshop would involve first conducting a skills and equipment audit of the existing workshop and identifying any shortfalls.

Next, to identify the limiting factors, the workshop would have to ascertain the needs of the end user for after-hours servicing and repairs, the impact, if any, of in-house servicing on warranty and resale values, the requirements of maintenance chain of responsibility on mechanical services, and finally the availability of contractors.

The fleet manager would then have to consider and analyse the alternatives; either keeping the work in-house or outsourcing to a contractor. This can be done with a best value assessment.

A best value assessment involves a weighted analysis of all the factors that have been assessed, to determine which are the most important. For instance, criteria such as total annual costs, staff numbers and skills, facilities, operational convenience, and after-hours response can all be ranked according to their importance.

With these weightings, it is possible to obtain a total score for keeping services in house or outsourcing to a contractor.

Once the best value alternative is selected, a method of implementing and monitoring the choice should be used.

A Service Level Agreement is good way of doing this. It provides an agreed service specification to enable the end user to get the level and standard of service required and enable both the service provider and end users to be clear on performance standards. It will increase accountability, improve customer service and assist in managing costs.

About the 2018 Plant and Vehicle Management Workshops, 12-29 November 
The IPWEA Plant and Vehicle Management Workshops have been providing continuing professional development and networking for people working with fleet for more than 15 years. Providing a mix of training and technical sessions, the workshops are a roadshow that is delivered to eight locations around Australia, enabling attendance by people who would not be able to attend a national event. Register now. 
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