What is the best way to justify "in-house" PdM techniques versus outsourcing to contractors? I am constantly being bombarded by upper-management to go this route, although I don't believe it would be best for the facility. We currently have vibration monitoring and a small amount of IR, with plans in the works to add ultrasound and oil analysis. Any thoughts or experiences with this issue would be greatly appreciated.

As any "make vs buy" or "in house vs subcontract" multiple alternatives descision making, you have to make your case. For each alternative describe scope, identify costs and benefits, translate it to dollars and cents, discuss other applicable considerations, present them vis a vis, make your recommendation and submit it to the appropriate management level for final blessing.
Alternative A:
You already have something running in house, how much it is costing you?
* Labor costs
*** Direct Labor Hours
*** Benefits costs
* Training
* Testing Equipment / tools costs
*** PM / Calibration for testing equipment, Recertification?
*** Software
*** Supplies
*** Equipment/tools replacement?
* Overhead costs
* Other costs ...
Alternative B: Subcontract
* What will you pay to the contractor for the same work you are doing in house?
* Will you invest time of your crew in alternative B? For examples:
*** to escort subcontractor to job area? add this cost.
*** Will you keep doing some internal besides what the contractor will do? Then, add these costs here.

The cost comparison is definitely important, but don't forget to find a meaningful way to communicate the more intangible benefits of in-house PdM. A few things that come to mind are:

• Ownership of equipment & program
  
• Accountability
  
• Integration of the different technologies
  
• Improved Relationships between engineers, technologists, and craftsmen
  
• Skill enhancement
  
• Ownership of the data
  
• Building of a reliability-focused culture
  

All of these benefits will pay off in areas you can never achieve with a contractor-based PdM program.

Of course, if some specialized technologies will only be used sporadically, they may be candidates for outsourcing. Be prepared to show management exactly what the upfront investment is (equipment, software & training) for each technology, an estimate of the engineering and craft resources needed, and a plan for how the technologies and data will be integrated to maximize the understanding of equipment condition.

Depending on your plant size and resource pool, I believe you can make a good case for growing your in-house program instead of contracting the whole thing. My personal experience is that you need to show the numbers but also go beyond the numbers when justifying to management.

Good luck!
Shelley

This is not easily answered.

We, at Alert, have been both in-house and contractor.

To me, the in-house is by far the better way to go. This statement might seem strange coming from a contractor, but we had rather train plants to do their own, so they can have better, daily coverage of the equipment.

The people of an in-house program take ownership of the equipment so as to do their very best to keep it running with the least amount of unscheduled downtime. That is if the "correct" people are chosen to fill the jobs. Not to say a contractor does not take "some ownership" but an on-site person is always at hand to check and double check and daily watch each piece of equipment if the need be. Unless the contractor is working full time at your plant, this is one lost advantage a plant has without an in-house program.

Labor cost and analyzing equipment purchasing are other factors which "regulates" the choice of in-house vs contractor. The initial cost of transferring from contractor to in-house might be a little steep, but in the long run, the results make up the difference.

VENDOR WARNING:
I won't get into a VENDOR discussion here on this thread, but you can look at our web page at www.alertanalytical.com and see what we offer for on-site training for "new" programs as well as existing ones.

It has to make sense and be cost justifible. In all probability the outside source is cheapest and should have the expertise. However, both, if good programs will provide a good payback. So, what do you want; it's not which is cheapest if both provide substantial savings and put money in your pocket. It's your particular situation: what's the size of your facility and resources available and what job functions will the PdM Div do - alignments, balancing, lubrication, etc......

But the bottom line is: numbers on paper w/$$$$$ amounts clearly defined.

You say that you are constantly bombarded by management on this topic. Why? Do they think it will be less expensive or are there quality concerns (knowledge in applying and diagnosing problems) or are your PDM guys pulled off to do other "more important" tasks making their quality and efficiency less or is your site looking at outsourcing all maintenance?

I think Shelley made a good point. The hard-dollar costs are the easiest to quantify, so those are the ones that may receive the most weight during evaluation of alternatives.

The effectiveness is a lot tougher to quantify but is just as important (or more important) as the cost.

I'll talk about vibration analysis for example.

Will the contractor know the history of the machines? Is the plant willing to throw that historical knowledge of the current pdm folks away?

Will the contractor know who to talk to in order to investigate further (operations and maintenance) once he notices something abnormal on a machine?

Will he be effective in communicating results to all stakeholders? Will he be available to discuss the results with stakeholders that are seeking to understand them and prioritize/plan repairs.

Will he be available on a moments notice to assist troubleshooting? Possibly during off-hours?

Will he stop by during repair of an identified problem to see what was found?

Will he be an effective advocate to help maintenance realize they need to change their practices, when they think they are doing it right?

I think the preference to outsource would come in part from a preconception that predictive maintenance is a very narrowly-focused job which begins by walking out in the field for a survey and ends with sending out a report. Once it is understood that it is a much broader job, integrated with many other parts of the organization, the argument for outsourcing is not as strong.

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