Tomorrow's enterprise would want to limit their efforts, energies and expertise to the areas of their core competency rather than dwelling on non-core areas. When we look at asset intensive organizations, most of these firms would want to stick to their area of expertise i.e. manufacturing/producing products of value. So, these organizations can spend their resources and energies in innovating and manufacturing products and leave the supporting areas to the experts in those areas like how IT implementations are not carried out in house as it is not their core competency.
My area of interest is the outsourcing of Enterprise asset management itself as a function. EAM has wide range of scope viz. Preventive Maintenance, Condition Monitoring, Predictive Maintenance and Shutdown. Today's organizations are outsourcing bits and parts of the maintenance scope, but we are talking about outsourcing asset management as a whole this would be a new high! This would essentially mean there would be a lot of players mushrooming in this space in future, who would specialize in providing all kinds of asset management solutions. This would mean these organizations would get into agreements with asset management organizations to take care of their assets.
Implementation of this model would mean organizations can undo their maintenance team and the maintenance scope would be carried out by EAM partners. This would cut the in-house maintenance cost hugely and reduce the pressure on Plant Manager in procuring skilled labor, etc. Advantages of this model would be hassle free maintenance, transferring of ownership & less liability, adherence to SLA, on time availability of maintenance team, cut-off training cost, no issue with aging workforce, controls maintenance cost and increased return on assets. Outsourcing of EAM could also open door to outsourcing full/partial inventory management & procurement process which would definitely be an added advantage and help in optimizing processes further.
Success of any process couldn't be demonstrated unless it is measured. There is an epigram that 'if you do not measure it, you cannot improve it'. This is also the case when it comes to outsourcing. Continuous improvement can happen only when maintenance data and metrics are captured and this would go a long way in future enhancement and decision-making. This could be measured if the data are collected and reported through a Computerized Maintenance Management System (CMMS).
So, the EAM partner should have the capability to capture maintenance activities through CMMS. Question arises if it is feasible for our partner to implement and maintain a CMMS system? or should we renew the current software package licenses - licenses are not cheap or how is this going to be handled? The EAM partner will have to analyze the viability of buying a licensed software based on many factors like the duration of contract and other contract terms.
A viable solution for such a business model is going to be the subscription way. Some of the major ERP vendors have already introduced subscription models. This model has many advantages as there is no Maintenance cost on server, no implementation cost, flexibility work from anywhere, disaster recovery, no capital investment, automatic software updates and reduces spending on technology.
After successfully outsourcing the EAM model what can a management/company expect from it? The key areas of interest could be on performance of the asset, returns yield, optimization of process, increase in production output and complete statutory compliance.
Today most of the companies are facing difficulties managing thru in-house staff and the managements have started looking for outsourcing opportunities. I wouldn't dare say this is the way forward nevertheless this is one way of many ways for future maintenance but taking this decision in an established organizations is not quite easy.