To study the implications of maintenance outsourcing on customer service quality, safety and cost efficiency in MTR Corporation Operations Engineering Department

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To study the implications of maintenance outsourcing on customer service quality, safety and cost efficiency in MTR Corporation Operations Engineering Department

 

Author: Manho, John William
Title: To study the implications of maintenance outsourcing on customer service quality, safety and cost efficiency in MTR Corporation Operations Engineering Department
Year: 1999
Subject: Mass Transit Railway Corporation. Operations Engineering Dept
Mass Transit Railway Corporation -- Customer services -- Quality control
Mass Transit Railway Corporation -- Management
Contracting out -- China -- Hong Kong
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Dept. of Management
Pages: vii, 151 leaves : ill. (some col.) ; 31 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1488511
URI: http://theses.lib.polyu.edu.hk/handle/200/1912
Abstract: In line with the adoption of outsourcing maintenance in MTR Corporation OED maintenance sections, this project has been undertaken to examine, review and recommend on past and present outsourced maintenance activities aiming for a better procedure and process for the management to evaluate outsourcing proposals, assessing the competency of potential tenderers and to help monitoring their service provision. The project began in September 1998 with a review of relevant documents. This was followed by information collection via the Operations Railway EIS and by questionnaire survey and discussion with respective maintenance managers. The information gathered in this way was then analysed carefully, leading to preparation of feasible guidelines and procedures in recommending OED maintenance sections to implement. Use of maintenance contracts are considered within both economic and safety reasons, where financially justified, for low skill tasks that are identified as non-safety critical and where service recoverability will not be affected. Outsourcing maintenance has also been utilised for specialised equipment where stringent statutory requirements are to be met and for equipment which requires highly specialised skills that are not readily available in-house. The detail figures of outsourcing works in this paper have been collected for the years 1995 to 2001 from Civil Works, C&CS, E&M, Works, Depots, Electronic Workshop, Quality & Standards, Design Sections and LAR. The outsourcing works in OED consist of the maintenance works from frontline and workshop maintenance sections, the support services and project works from non-maintenance sections. This project study was, however, confined to OED maintenance activities. The total value of work outsourced in 1998 was HK$2.8 billion of which maintenance works occupied merely 6.7% (HK$188 million). This figure represents 20% of total OED annual expenditure on maintenance. Excluding support services and project works, the equivalent manpower cast saved by outsourcing maintenance was $55M (23% that of in-house) in 1998 and was estimated the same for year 2001. It is anticipated that outsourcing maintenance will be significantly increased with the opening of TKE in 2002. Despite the advantages of outsourcing in labour cost reduction and access to special skills, there are increasing concerns from staff on their job security, degrade of equipment performance, reduced work quality, control of contractor's performance, and etc. Management must ensure the Corporation obtains work of sufficient standard and will need to be very sensitive to outsourcing in the present economic climate. Recommended approaches such as the development of computerised MIS module for maintenance contract management, are included for management's consideration. It is recommended that a long term partnership between the Corporation and contractors with a good performance be further developed so that the supervision resources from OED can be further reduced and the benefit of outsourcing increased. Whilst OED managers focus their attention on the potential for more outsourcing, it is suggested that the mix of in-house work and outsourcing work be regularly reviewed to give the optimum combination of utilizing the internal and external resources. In summary, this report presents a review of the effectiveness of outsourced maintenance activities together with recommended guidelines and improvement initiatives for the OED's adoption of sound outsourcing management policies and procedures. The overall findings is that there are many opportunities for OED to benefit through the implementation of the report's recommendations.

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