Decision on Maintenance Outsourcing

This chapter presents key aspects of multicriteria (MCDM/A) approaches for decisions on maintenance outsourcing regarding maintenance contract, which includes contract selection (e.g. repair contract) and supplier selection. Contract design is a multi-objective task that leads the maintenance manager (or decision maker - DM) to decide amongst a combination of contracts and suppliers’ bids for the service. Given the multiple objective nature of this kind of problem, this chapter presents models that include maintainability, dependability, quality of repair and other aspects besides cost. The decision models presented consider methods such as Multi-attribute utility theory (MAUT) to address compensatory preferences and ELECTRE for preferences that require an outranking method. The DM’s behavior to risk (prone, neutral and averse) is considered by using Utility Theory and Decision theory foundations in order to include the state of nature in decision models. Thus, most of the problems are related to supplier and contract selection, which may be modeled into a single problem when considering all combinations of contracts and suppliers as alternatives, including the possibility of in-house maintenance being undertaken by a maintenance service supplier. Depending on the organization and in how strategic its maintenance function may be, decisions in maintenance outsourcing may be approached in different stages. Thus, a key performance indicator (KPI) for such problems are defined depending on the type of organization, its capabilities and the number of maintenance activities, while the tradeoff amongst strategic objectives is balanced in order to assure the system’s availability.