Maximizing the Value of Your Maintenance Contractor

Choosing the right maintenance partner is one of the most important decisions you can make for the long-term health of your plant. An experienced maintenance contractor brings skilled personnel, subject matter experts on predictive and preventive maintenance, along with tools, systems and industry best practices developed for a broad array of customers and their requirements. 

A wise plant operator will leverage the capabilities of their maintenance contractor to increase the efficiency and reliability of their asset and deliver continuous improvement to their plant’s up-time which focusing their resources on the processes and practice that can make their asset run more efficiently.

Here’s how to develop a mutually beneficial relationship with your contractor that will add predictability to your operations and dollars to your bottom line.

Think long-term. A three-year contract with the potential for a two-year extension based on performance helps the contractor and plant team build a collaborative, win-win relationship and gives the contractor an opportunity to bring value to the plant. At one site where Bilfinger has provided nested maintenance services for over 25 years, our team has become an extension of the owner’s team. We’ve trained and developed our craft to meet their specific requirements and provide complex services that normally would be handled by a third-party contractor, eliminating the cost of mobilization and reducing downtime based on plant knowledge.

Consider a performance-based contract.  If a contractor’s performance does not meet expectations, their fee can be reduced. On the other hand, if the contractor over-performs and delivers cost savings or cost avoidance, it would share in those savings. Performance-based contracts that put margins on the line encourage both the contractor and operator to identify how to leverage synergies to save money, reduce costs and drive innovation, which can leave the operator with more money at the end of the year to invest in their assets.

Develop mutually agreed upon key performance indicators (KPIs).  There’s a saying in the industry that you can only improve a process if you can measure it. KPIs should be challenging, yet achievable, clearly defined and enable an organization to track leading and lagging indicators throughout the entire work delivery process.

In addition, the maintenance contractor should have the ability to capture and self-report KPI data and organize it in a way that drives accountability and continuous improvement. Otherwise the customer is not only investing significant assets in reporting how their maintenance engine is working, but also in managing the work of their maintenance contractor.

Take advantage of available capabilities and technologies. Operators should look for a contractor with a diverse background working for strong performing customers, including the competition, and leverage their experience and capabilities for their benefit. If there’s a technology application an operator needs, I would almost bet the contractor either has it or has seen it and can help build the appropriate solution.  

Emphasize training. A contractor that has established craft progression and craft training programs, including multi-craft training and certification, ensures quality craftsmen who are capable not only of performing quality work in one skill, but also other forms of maintenance throughout the facility while streamlining the scheduling of work. Targeting a mix of 30-40 percent of the workforce to include multi-craft resources has been shown to reduce backlog and overtime by 5 percent and 10 percent, respectively.

Create an executive steering committee. A hands-on executive team of both site and contractor leadership developing a long-term strategic plan and working together on common goals can produce step changes in productivity, reliability and efficiency. The team should meet on a regularly scheduled basis to align on goals, resolve issues, oversee progress and review improvement activities and results.

As the competitive landscape tightens and market volatility continues to erode producers’ margins, a fully engaged maintenance partner can help customers improve their overall equipment efficiency, reduce maintenance costs and increase work productivity. Given the magnitude of spend in the downstream industry, even a few percentages of improvement could deliver greater profitability and industry-leading results.

Keith Hopkins

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