In my trips to various plants over the last year or so, I’ve noticed a silent movement toward contractor-based lubrication. Although not many people are talking about it, I would venture to say that every facility I’ve visited in the last six months has had some form of outsourced labor performing maintenance and lubrication tasks. The motivation behind this movement is somewhat difficult to understand, but perhaps this article will help you determine if the strategy is viable for your organization.
Outsourcing refers to the practice of a business contracting a third-party provider to deliver services that otherwise could be performed by in-house employees. Outsourcing is not new. It has been around for as long as there have been businesses needing specialized work performed. It has just taken a while for lubrication and reliability-centered tasks to be considered “specialized.” I believe this is the reason more and more companies are adopting outsourced lubrication specialists. They are just now realizing the importance of these skilled workers and the value they can bring to an organization.
At first glance, the most appealing thing for companies that are considering outsourcing is the cost. It is the answer I hear most often when asking these companies why they have decided to use an outsourced workforce. Outsourcing typically provides a lower apparent operational and labor cost, but at what price? I say apparent because I believe this small upfront savings may be costing more in the long term. The consequences of a poorly developed and deployed lubrication program will dwarf any savings from outsourcing.
If cost was the driving factor to determine the use of outsourced labor, then it would be safe to say that the job went to bid, and the lowest bid was the one that was accepted. Now think about the life blood of your machines, the foundation of your machine reliability and the ultimate key to your livelihood all resting on the tasks that are now being performed by the lowest bidder. What compromises have been made? Are these technicians highly skilled individuals? Do they really care about and “own” the equipment on which they are working?
If you are considering outsourcing lubrication tasks, make absolutely certain that you are speaking to the right organizations. You want to be working with companies that specialize in lubrication, not those that just provide warm bodies to do the work. You need a firm that can guarantee its laborers have had specific training and hold certifications demonstrating that they possess the skills and knowledge required to perform the tasks at hand.
Another reason frequently given for outsourcing is that the facility recognizes that it is not currently doing a good job with lubrication or reliability and thinks that outsourcing will remedy these shortcomings. However, the reality is that if your program is flawed from the beginning, the workers will fail, no matter how skilled they are.
The Risks of Outsourcing
The results of a recent global study revealed the concerns, effectiveness and best practices in risk management by organizations that outsource projects. Of the 95 percent of organizations that buy, provide or both buy and provide outsourced services and functions, fewer than half are able to effectively manage risk of outsourced projects.
Managing product or service quality is the top outsourcing risk to organizations, identified by 70 percent of those responding to the survey. Survey respondents included contractor managers, subcontractor buyers, project managers, senior executives and key decision-makers in outsourcing from a wide range of industries and governments in North and South America, Europe, Asia, the Middle East and India. The study was conducted by ESI International.
A typical scenario would be that a company begins to experience significant reductions in asset availability due to mechanical failure. It is determined that the failures are caused by a lack of fluid cleanliness. Contaminated oil due to poor storage and handling practices, along with improper equipment configuration and design (particularly breathers and filters), led to reduced hydraulic pump and valve life as well as significant downtime. The company acknowledges the poor lubrication practices and infrastructure (storage room or lack thereof) as the primary root cause of the failures and decides to outsource the lubrication program to remedy the situation. With no revision made to correct the root cause (contaminated oil through storage and handling), there likely will not be any improvements while the contract technicians are at the helm. In this case, the labor is not the problem, and outsourcing is not the solution.
This example illustrates the limitations of outsourcing when the decision is based on the belief that “we can just pay them to do it while we focus on our core competencies.” Although it is true that the skills and motivation of the technician can have a tremendous effect on the success of the program, a great tech in a poor program is still destined to fail. Therefore, I contend that until the lubrication process and program (or any maintenance activities for that matter) have been properly designed and developed, the staffing of these roles should not be outsourced. There must be a plan in place and procedures to follow along with ownership and accountability. Then, and only then, will you have given your program a chance to succeed whether staffed internally or outsourced.
| 40% | of machinerylubrication.com visitors say their plant outsources lubrication or maintenance tasks to contract-based laborers |
Outsourcing is here to stay. It has become the new model. However, it can also have many potential pitfalls. To avoid them, make sure your company and the firm you have chosen have similar goals and values. When what they believe is in perfect alignment with what you believe, the probability for success is much greater. For it to work, top management must be fully onboard and be able to recognize problems early on so they can be corrected with little disruption to the ultimate plan.
Proper machinery lubrication is not something at which you can just throw a warm body. Given the serious reliability implications, the work demands a true lubrication professional with the proper skills to get the job done. Under the right circumstances, when a company outsources lubrication to create value and competitive advantage, not just to cut costs or use as a Band-Aid for failing practices and infrastructure, it can be a winning strategy. It can even help encourage and nurture a best-in-class attitude throughout the company.
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