1 MAINTENANCE EFFICIENCY THROUGH DIRECT LABOR OR MAINTENANCE CONTRACTS BY Al-Hammad, A., and Al-Otaibi, G. College of Environmental Design King Fahd University of Petroleum and Minerals Dhahran – Saudi Arabia

2 CONTENTS INTRODUCTIONOBJECTIVESMETHODOLOGY DIRECT LABOR CONTRACT FACTORS INFLUNENCING CHOICE STUDY SURVEY RESULTS OF THE STUDY CONCLUSIONS

3 INTRODUCTION  Nowadays, many maintenance managers are challenged to manage their maintenance activities with limited resources including direct labor.  Under certain conditions maintenance managers may choice to hire a maintenance contractor.  Based on their experience, maintenance managers do differ in their policy of when and at what level they recruit maintenance contractors

4 INTRODUCTION (continued)  In order to make a proper decision in making a chose between direct labor or a contract, the advantages and disadvantages as well as the factors influencing the chose between the two options must be identified and assessed.  Literature has identified these issues but none indicated their assessment and ranking.

5 OBJECTIVES OF THE STUDY To assess, from the view points of the maintenance managers, the advantages and disadvantages of direct labor versus maintenance contractors and the criteria that are needed to make a choice between the two options or combined.

6 RESEARCH METHODOLOGY The study was carried out in two phases: The first phase included a literature search and interviews. It help in the identification of the factors In the second phase a questionnaire was developed using the aforementioned factors and then a survey was conducted to assess the relative importance of those factors. The data gathered from the survey was analyzed statistically.

7 Direct Labor Based on a literature review and a pilot study of interviews with maintenance managers, the advantages and disadvantages of direct labor can be outlined as follows: (a)Advantages of Direct Labor 1.Full Control of the Allocation of Work 2.Direct Labor Familiar with Work 3.Better Cost Control 4. Better Control of Quality 5. No Delay in Execution 5. More Control on Security Risk

8 Direct Labor ( Continued) (b)Disadvantages of Direct Labor 1.Lack of Skilled Labor 2.It is More Expensive 3.Hard to Recall People in Emergency Case

9 CONTRACT Based on a literature review and a pilot study of interviews with maintenance managers, the advantages and disadvantages of the contract can be summarized as follows: (a)Contract Advantages 1.Providing Skilled Labor 2.Increasing Productivity of Maintenance 3.Less Investment in support Equipment 4.Less Management Problems 5.Choice of Changing Contractor 6.Control Manpower

10 CONTRACT ( Continued ) (b)Contract Disadvantages 1.It is Expensive 2.More Supervision required 3.Tendering Procedures Delay Work

11 Factors Influencing Choice The factors, which influence the choice between direct labor and contractor, may be identified as follows: 1. Nature of Work 2. Volume of Work 2. Response time Emergency work Urgent work Normal work 4.Location 4.Location 5.Quality 5.Quality 6.Market conditions

12 STUDY SURVEY Considering the above mentioned factors, a survey of a randomly selected sample of 30 professional maintenance managers in Saudi Arabia was carried out to measure their assessment of the relative importance of each of the above factors.

13 RESULTS OF THE SURVEY Based on the response of the survey, an importance index was calculated to reflect the level of importance of these factors. This index was calculated as follows: Importance Index (i)= Importance Index (i)=

14 ANALYSIS OF DATA Tables 1,2, and 3 show the importance index of all factors related to direct labor or a contract as well as the factors influencing the chose according to the evaluation of the professional maintenance managers. The importance indices were grouped to reflect the respondents rating as follows: Extremely important80 < I < 100 Important40 < I < 60 Somewhat important20 < I < 40 Not applicable0 < I < 20

15 Table 1: Result of the survey for Director Labor

16 Table 2: Result of the survey for Contracts

17 Table 3: Result of the survey for Factors Influencing Chose

18 CONCLUSIONS Based on the result of this study and as shown in Tables 1,2, and 3, the following can be concluded: The major advantages of direct labor were evaluated as follows: 1. Providing full control of work 2. Providing better cost control 3. Providing more control on security risk 4. Providing better control of quality 5. Direct labor familiar with work

19 CONCLUSIONS (continued ) The major disadvantages of direct labor were evaluated as follows: 1. Lack of skilled labor 2. It is more expensive 3. Hard to recall people in emergency cases

20 CONCLUSIONS (continued ) The major advantages of contract were evaluated as follows: 1. Availability of skilled labor 2. It increases the productivity 3. Flexibility in controlling manpower 4. less management problems 5. Choice of change contractor 6. Less investment in support equipment

21 CONCLUSIONS (continued ) The major disadvantages of contract were evaluated as follows: 1. It is expensive 2. Required more supervision 3. Tendering procedures will delay work 4. Quality is not easy to control 4. Quality is not easy to control

22 CONCLUSIONS (continued ) The major factors influencing choice were evaluated as follows: 1. Work requires conventional craft skills in joined with direct labor 2.Direct labor will be joined to high standard of maintenance 3. Market condition effect 4. Specialist work 5. Peak work loads 6. In emergency cases, contractor will respond better

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