Mhlnews 1295 Maintenance Outsourcing

Automation: The Move to Maintenance Outsourcing

March 1, 2009
As uptime, cost control and equipment utilization make their way up the corporate agenda, resident maintenance programs are moving into the spotlight.

By Jim McMahon

Change is afoot in the way high-throughput distribution centers (DCs) manage their maintenance functions. Traditionally, automated DCs hire contractors or temporary employees to carry out equipment maintenance procedures.

Today, however, an increasing number of DCs are moving toward long-term outsourcing agreements known as resident maintenance programs. These programs provide on-site technicians who perform preventive, corrective and emergency maintenance as well as operational assistance to ensure material handling systems function at optimum efficiency.

Explaining the Shift
There are several factors influencing the move to resident maintenance programs. The most critical one is the desire to optimize system uptime, which requires a more comprehensive and systematized approach to maintenance.

Secondly, as equipment becomes more automated and sophisticated, the need for more technically specialized personnel increases. Ten years ago, material handling systems in DCs were mostly mechanical. Today’s high-speed, automated systems are much more dependent on controls and software. DCs run at high levels of precision and complexity, requiring software and technicians with more diverse skill sets. Even non-specialized personnel require more training on highly controlled equipment such as automated storage and retrieval systems.

This has ushered in a new set of staffing problems for automated DCs. According to the consulting firm Rider and Associates, a typical automated DC will experience employee turnover rates between 50% and 60% per year.

Making matters worse, if an automated system was installed more than three years ago, there is a high probability that no personnel remain from the initial equipment training.

The primary reason to perform maintenance is to prevent costly, unplanned shutdowns while maximizing equipment life. The cost of repairing equipment is marginal compared to the loss of throughput, which could be as high as 200,000 cases per day.

That’s why leading-edge companies are viewing DC operations from a performance standpoint rather than focusing on cost alone. Establishing and monitoring key performance indicators for maintenance, safety and system uptime has taken on a whole new perspective, with an eye toward maximum output, optimum equipment utilization and system longevity.

Optimizing utilization depends on pinpointing problems ahead of time, uncovering inefficiencies that could lead to reduced performance and scheduling preventive maintenance routines. As speed increases, so does the force on mechanical structures. These wearing forces can go unrecognized by operations staff until the system’s throughput slows or begins to break down.

Extending Uptime
One example of an outsourced maintenance relationship is Dematic’s resident maintenance program, which, according to Dematic, includes a protocol for continuous improvement, a predictive maintenance regimen, analysis of failure effects and troubleshooting procedures. Recognizing that each DC has unique needs, Dematic says it can develop custom resident maintenance programs that can be used with equipment from any supplier.

Exel Inc. has tapped Dematic’s resident maintenance program to improve system uptime and extend equipment life in its high-speed DC in Groveport, Ohio.

“Our goal of 98% uptime is a high standard from an engineering standpoint,” says Steve Nissen, director of operations for the Exel facility. “Dematic’s resident maintenance crew concentrates on maximizing our system’s uptime, which is running very high, in the 99.4% to 99.8% range. The program is very focused on preventive maintenance.

“Exel looks at a company’s ability to work with different types of technologies and solutions,” continues Nissen. “When you get to the much more integrated technology solutions, where there is a heavy amount of automation, you really want to be sure the people you have on staff, or those that you contract with, are completely capable of troubleshooting and servicing that equipment.”

“Some clients run 20 hours per day, seven days a week; others run one shift five days a week,” adds Steven Brandt, Dematic’s business development manager for resident maintenance programs. “It can be customized to focus just on the maintenance of the material handling system, or it may include DC management.”

Regardless of the specific focus, a well structured resident maintenance program allows for flexible staffing, optimizes uptime and achieves cost reductions through increased productivity and decreased overall maintenance costs. It also reduces the need for emergency repairs and preserves the all-important equipment investment.

Jim McMahon is a technical writer who specializes in logistics automation.