Development of a relationship management framework and related performance matrics for outsourced aircraft maintenance

Abstract

Driven by an intensely competitive world, the use of outsourcing is extensive and growing especially in the service business area. Outsourcing provides companies with benefits such as cost reduction and performance enhancement. Despite these advantages, companies need to be aware that successful outsourcing requires an appropriate long term strategy in managing the relationships with their providers. In turn, the providers have to develop collaborative relationships with their customers in order to improve customer satisfaction. Although relationship management of relevance to outsourcing is recognised as an important concept, it has not received attention from both practitioners and researchers, especially with regard to aircraft maintenance outsourcing which is considered to be critical outsourcing associated with high financial and strategic risks. Therefore, the aim of this research study is “to improve aircraft maintenance outsourcing through relationship management”. This research has been divided into three stages to achieve the research aim. The first stage related to an exploration of the key factors for the management of outsourcing relationship, starting with a review of the relevant literature. A multiple case study was then selected to investigate today’s practices of the management of the IT outsourcing relationship, which has similar characteristics to aircraft maintenance outsourcing. A questionnaire survey was also conducted to explore key factors of relationship management for aircraft maintenance outsourcing. With these three sources of evidence, a conclusive finding is that relationship management of relevance to outsourcing comprises six key factors which are clearly defined requirements, agreement, delivery governance, service delivery, performance evaluation and inter-organisational coordination. The second stage focused on exploring how the relationship between an aircraft maintenance provider and an aircraft maintenance customer is managed. The three cases study relationships featuring the four case companies were selected to carry out an in-depth investigation of relationship management for aircraft maintenance outsourcing. The researcher used interview, observation and documentation to collect data from these four case companies. The findings showed that the six key factors identified in the first stage influence the establishment and development of the relationship between the aircraft maintenance provider and customer. Moreover, external factors also have an impact on the way that both parties manage their relationship. The third stage was to develop a proposed approach to performance measurement which is viewed as a key factor of the management of the relationship between an aircraft maintenance provider and an aircraft maintenance customer. The researcher conducted an action research in cooperation with the main subject of this research. The study discovered that the gap model is applicable for performance measurement in aircraft maintenance outsourcing. The improved version of performance measurement model includes new performance metrics that are essential for monitoring the gaps between the provider and customer.