Outsourcing maintenance opens up plant availability for Tier 1 auto supplier

The decision for Griffin, Ga.-based Nacom Corp., an electronic assembly supplier to automotive OEMs, to relocate to Mexico wasn't an easy one. The most pressing priority leading up to the move was building sufficient stock inventory to meet customers' requirements during the transition—even though the plant was closing.

05/01/2008


The decision for Griffin, Ga.-based Nacom Corp. , an electronic assembly supplier to automotive OEMs, to relocate to Mexico wasn't an easy one. The most pressing priority leading up to the move was building sufficient stock inventory to meet customers' requirements during the transition—even though the plant was closing.

“We supply the Big Three and other automakers like Toyota and Nissan, and we knew we had to build several months of bank stock before moving the facility so it wouldn't affect our customers' JIT production, says Tom Clark, Nacom's director of operations and engineering. “We needed to increase production to meet that goal, which [puts more] emphasis on preventive maintenance and machine uptime. At the same time, we were prepared for 50 percent to 60 percent of our maintenance associates to leave the company because they knew the plant was closing.”

That's why Nacom decided to outsource maintenance to Advanced Technology Services (ATS) , which supplies managed production equipment maintenance, industrial parts repair, and IT solutions.

ATS, already known for its staff of 2,000 people, is making a name for itself for the same reasons companies in the IT outsourcing business succeed, says Houghton Leroy, research director for enterprise asset management with Dedham, Mass.-based ARC Advisory Group . Namely, there's growing demand for such services.

“First, the skilled maintenance labor pool is rapidly shrinking as more employees retire,” says Leroy. “Second, the complexity of assets has changed, and it costs even more to maintain them. Finally, the cost of spare parts is rising, and many companies don't want the cost of carrying spare parts anyway. These are all compelling reasons to outsource maintenance to a company like ATS.”

In the case of Nacom, the decision to outsource maintenance proved to be sound.

“We are a lean company, so we don't carry buffer inventory. That means we need to focus on production and let ATS do what they do best: maintenance to ensure production uptime,” Clark says. “ROI has been significant in a short time. We've seen a 45-percent improvement in plant availability, and a 30-percent reduction in maintenance overtime.” Clark adds that ATS took over Nacom's maintenance staff, so no jobs were actually lost.





No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
Each year, a panel of Control Engineering editors and industry expert judges select the System Integrator of the Year Award winners.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Learn how to create value with re-use; gain productivity with lean automation and connectivity, and optimize panel design and construction.
Go deep: Automation tackles offshore oil challenges; Ethernet advice; Wireless robotics; Product exclusives; Digital edition exclusives
Lost in the gray scale? How to get effective HMIs; Best practices: Integrate old and new wireless systems; Smart software, networks; Service provider certifications
Fixing PID: Part 2: Tweaking controller strategy; Machine safety networks; Salary survey and career advice; Smart I/O architecture; Product exclusives
The Ask Control Engineering blog covers all aspects of automation, including motors, drives, sensors, motion control, machine control, and embedded systems.
Look at the basics of industrial wireless technologies, wireless concepts, wireless standards, and wireless best practices with Daniel E. Capano of Diversified Technical Services Inc.
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
This is a blog from the trenches – written by engineers who are implementing and upgrading control systems every day across every industry.
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Control Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.