In-House vs. Outsourced Maintenance: Key Decision Points for Utility Fleets

Among the significant decisions a utility fleet manager may face is whether to outsource vehicle maintenance work or handle it in-house. What do you need to know to make the right choice for your operation? UFP recently interviewed two industry veterans to identify key decision points.

According to Elizabeth Daiber, superintendent of field support and analysis for Ameren Illinois, resource availability is the foremost factor to consider when determining whether to outsource maintenance.

“Technician shortages or a heavy workload in a certain area generally results in outsourcing,” she said.

For Dave Broadwater, fleet management services manager at Holman (www.holman.com), the decision boils down to three factors: capacity, capability and infrastructure.

In terms of capacity, “If you have too few technicians, you’ll likely incur additional downtime as vehicles wait to be serviced,” he said. Conversely, too many technicians could increase labor rates and operating costs.

Fleet managers also must assess whether their technicians have the training and expertise necessary to service each type of vehicle in the fleet, Broadwater advised. As fleets evolve, vehicles are becoming more sophisticated; keeping up with the latest technology can be challenging.

Infrastructure (e.g., facilities, tools) has the potential to be complex – and expensive. “The capital investment required to maintain a fully functioning in-house maintenance facility can be substantial,” said Broadwater, who also noted the significant amount of administrative work that’s needed to manage parts inventories, coordinate schedules and maintain service records.

Outsourcing can ease or eliminate these burdens, allowing fleet managers to – as Broadwater pointed out – “focus on your core business rather than worrying about turning wrenches.”

Keep PM In-House
However, not all maintenance tasks are suitable for outsourcing. Preventive maintenance (PM) work is often best handled internally.

“PMs are a vital part of a fleet maintenance program,” Daiber said. “Keeping PMs in-house allows us to retain more control over this critical function.”

Because PM is required to keep vehicles in good condition and reduce future repair costs, the work demands close oversight. Performing it in-house can benefit utility organizations concerned about fleet uptime.

Outsource Complex, Specialized Tasks
Outsourcing may be the better option for complex and specialized tasks, such as larger engine repairs, body work and extremely labor-intensive jobs, according to Daiber. These projects can take hours or even days to complete; if done in-house, they can pull technicians away from other, more time-sensitive tasks – like PM work.

Broadwater explained that outsourcing can improve asset availability: “Outsourcing larger repairs allows in-house teams to stay focused on PM work, which minimizes downtime for the entire fleet.”

How do fleet managers assess whether outsourcing is cost-effective? Ameren Illinois tracks data to compare costs for various types of outsourced maintenance.

“We compare the cost [per] unit to maintain an asset in a garage that does most of its repairs in-house to one that uses a blended approach and to those that outsource everything,” Daiber said. This approach helps the organization’s fleet managers make informed decisions based on both cost and operational efficiency.

Size, Distribution and Tech Availability
A fleet’s size and distribution plus technician availability should factor into outsourcing decisions.

“If your fleet is large enough in a particular region, you may be able to justify an in-house team to manage the workload,” Broadwater said. “On the other hand, if you’re operating across a broad geographic area, the cost of having dedicated in-house staff everywhere may not make sense.”

Daiber noted that in certain parts of the company’s service territory, Ameren Illinois uses a hybrid maintenance model that enables technicians to perform routine PM work in-house and outsource complex tasks to specialized vendors. “If you’re in an area where skilled technicians are hard to find, outsourcing becomes a viable option.”

Quality Control
Quality control is a major concern when outsourcing maintenance tasks. Fleet managers must ensure that the work performed meets their standards and aligns with organizational goals. To address these requirements, Ameren Illinois has implemented a quality assurance program.

“We’ve audited vendors who perform preventive maintenance and set clear expectations for the quality of work,” Daiber said. “The audits grade vendors, and any issues – whether it’s a communication breakdown or a skills gap – are addressed through training.”

Conclusion
For many fleets, a hybrid approach to maintenance – that is, keeping some work in-house while outsourcing other tasks – is the optimal solution.

“It allows you to scale your resources up or down based on need, while also ensuring that the most critical tasks are handled efficiently,” Broadwater said.

About the Author: Grace Suizo has been covering the automotive fleet industry since 2007. She spent six years as an editor for five fleet publications and has written more than 100 articles geared toward both commercial and public sector fleets.