Sub-contractor Management

Optimize subcontracting decisions and management

Subcontracting in all its forms is very common in maintenance operations. This is primarily due to the technicalities of the equipment requiring maintenance or the technical or human resources required to guarantee the best availability at the best price.

Context and challenges

Subcontracting is used to classify certain costs as variable or compensate for lacking skills. Maintenance may even be fully outsourced under an availability-type contract such as a global in-service support agreement.

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The degree of outsourcing is a strategic decision for maintenance that must take several factors into account: economic and technical considerations, operational security, management of workforce and skills, and sensitivity or criticality of the equipment maintained. As with all decisions to outsource work, it is also essential to consider the sustainability of internal expertise.

Major savings can be made but this also requires careful consideration of the procurement process and subcontracting management. Additionally, it means ensuring the effectiveness and efficiency of the subcontracted maintenance.

It also involves the implementation of collaborative practices. For example, informing the service provider (works or repairs) of planned maintenance so that it can implement the most appropriate industrial and logistics response.

How can Argon Consulting help you?

  • Analyzing maintenance activities and whether they are suitable for subcontracting, based on several criteria, including: internal and external compared cost volumes, whether it is critical to master the skills internally, availability of resources internally or externally
  • Identifying a target level of subcontracting that is compatible with business targets: deciding whether to “do it or get it done”, existence of reliable subcontractors capable of taking on work in the long term, procurement and subcontracting management processes, characteristics of the contract and reciprocal undertakings (flat-rate, cost plus, purchase contract), bonus-malus clauses and criteria, etc.
  • Defining the business case, to objectify the savings to be expected from the initiative
  • Assessing the impact of the target on processes and internal skill requirements: including managing works, defining the works to be carried out (this must be suitably specific, both from a technical and from a contractual point of view), the signing of contracts/procurement/acceptance of works process
  • Supporting implementation: involvement in drafting specifications and contract clauses, coaching the procurement functions and managing subcontracting during the implementation of new processes
  • Monitoring quantitative and qualitative gains by setting up a performance evolution dashboard for the key aims of the process
  • Transferring skills to client teams