More efficient co-operation leads to a reduction of 10% in maintenance costs

The main objective was to reduce fixed maintenance costs by 10%. Not simply by drastically forcing down contractors’ rates but by working together in a more efficient way or professionalising the outsourcing policy. In close collaboration with PDM, Huntsman developed a new incentive-driven co-operation model. Hans Schellekens, Maintenance and Project Group Manager at Huntsman, explains.

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Challenge

Huntsman Holland BV, a subsidiary of the American chemicals concern Huntsman Corporation of Salt Lake City, supplies semi-manufactured goods to healthcare, the chemical industry, and the plastics and automotive industries, as well as to the cleaning agents, textile and packaging industries. Worldwide, the Huntsman corporation employs no less than 11,300 people and has an annual turnover of 11.5 billion dollars. With more than 400 employees and ve factories, the site in Rozenburg is the biggest production complex of Huntsman Polyurethanes in Europe. Of the five factories, two produce customer-specific polyurethane applications and one factory makes polyols. Together, the total capacity of all the factories is more than 300,000 tonnes on a yearly basis.

Hans Schellekens
Maintenance and Project Group Manager, Huntsman

At any rate, it is clear that we’re on the right path, thanks to the help of PDM.

80/20 rule

The sub-project described here was part of a larger 2-year cost-saving project that involved all departments. The aim of the project was to reduce the xed costs of this production site by 10 to 15%. In spite of the fact that Huntsman has about 60 maintenance contracts with various external parties, it appeared that the five biggest contractors – active in piping, mechanical and electrical plants, cleaning, scaffolding, and insulation and instrumentation – were responsible for 80 to 90% of the outsourced maintenance.

Approach

"So we decided to simply confront these five biggest contractors with our objectives and then give them a choice of either creating a price war or creating a win-win situation with us by working together more efficiently,” says Schellekens. “This latter point meant that double work would have to be eliminated, that even smarter working methods would have to be used and that we would have to turn the hours-worked- invoice mentality into an efficiency-driven approach. In order to achieve this, we made the contractors mutually responsible for each other’s performance. This meant that people became critical of each other, which created a drive to improve performance jointly.”

Co-operation model

“To get this closer co-operation on the right path, PDM defined the framework of the new outsourcing policy and established the co-operation model needed for the future. In this way, Huntsman’s policy points were translated pragmatically into a blueprint for the future working method. At the same time, a co-operation model was developed with the contractors, including a clearly worded description of responsibilities, the method of co-operation, the reporting structure and the commercial conditions. The incentives incorporated in the model would have to lead to a win-win situation for both Huntsman and the contractors,” explains PDM.

Implementation

To implement the co-operation model, PDM designed a new department in which both contractors and Huntsman employees are active. At an executive, tactical and strategic level, platforms were established for progress monitoring and achieving the results. Thanks to this working method, pragmatic, workshop-orientated efficiency improvements can be achieved and smooth co-operation is guaranteed.

Hans Schellekens
Maintenance and Project Group Manager, Huntsman

In the beginning, our contractors were very wary, as were our own employees. However, the employees realised immediately after the start that they would have to change on a number of points. So when they got a more active role in all of this, they became critical but constructive.

Result

At the moment, we’ve been operating in this way for more than a year and although we have not yet reached our objective, it is now clear that the entire process has been changed, optimised and adjusted by our contractors and certainly our own people too. At any rate, it is clear that we’re on the right path, thanks to the help of PDM."


Hans Schellekens
Maintenance and Project Group Manager, Huntsman

This latter point meant that double-work would have to be eliminated, that even smarter working methods would have to be used and that we would have to turn the hours-worked-invoice mentality into an efficiency-driven approach.


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