Home  Journals  Economic Analysis: Theory and Practice  2(461) - 2017 February

On efficiency of outsourcing repair work at industrial undertakings

Vol. 16, Iss. 2, FEBRUARY 2017

Article PDF Version

Received: 30 November 2016

Received in revised form: 13 December 2016

Accepted: 27 December 2016

Available online: 27 February 2017

Subject Heading: BUSINESS PERFORMANCE

JEL Classification: L23, L53, M21

Pages: 351-363

https://doi.org/10.24891/ea.16.2.351

Importance The article describes a set of issues related to evaluation of efficiency of customer repair services outsourcing of a large industrial enterprise.
Objectives The aim of the study is to analyze the existing approaches to organization and planning of maintenance and repair of equipment, identify determinants of efficiency of outsourcing these works by the parent company.
Methods The study employs monographic, experimental, and economic and mathematical methods.
Results We reviewed modern approaches to organization and planning of repairs and maintenance of units. The paper offers indicators to assess the efficiency of activities of outsourcing firms furnishing equipment maintenance and repair services for a parent company. They include, along with the cost of works, the indicators of labor cost, production volumes, specific costs of maintenance and repair, repair cost per man-hour.
Conclusions and Relevance Outsourcing maintenance and repairs has a number of benefits for the outsourcing company, i.e. deepening specialization of certain types of repair works; improving work performance; increasing the scope of services. We also revealed negative sides, which lead to a decrease in the number of repairs and an increase in the cost of repairs. It is important to make a preliminary assessment of the efficiency of outsourcing maintenance and repairs. The identified factors will enable the parent company to have economic benefits by reducing the production costs and enhance its competitiveness.

Keywords: outsourcing, equipment, maintenance, repair, efficiency

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