Who takes care of maintenance? 'Make or Buy' considerations and supplier relationships in the Swedish mining sector

Staffan Brege, Sergio Biggemann, Christian Kowalkowski, Jane Maley

Research output: Book chapter/Published conference paperConference paper

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Abstract

The aim of the article is to examine the choice of in-house operations versus buying maintenance in the context of the Swedish mining industry. The operation of maintenance has become a critical strategic business concern. On the one hand, from a customer perspective the costs of maintenance is becoming increasingly more significant and the costs of large production stops that may occur when maintenance fails is indisputably damaging. Consequently, maintenance must be handled with skill and caution. On the other hand, from a supplier perspective maintenance is an important strategic component and is often more profitable and reliable than sales from new business. In an attempt to maintain and increase revenue for maintenance, suppliers are bundling maintenance into integrated solutions by offering different packages of maintenance or widening the offering to include equipment from competitors or even to give performance guarantees for entire production systems We analyze the rational for choice of suppliers, types of relationship and the contractual conditions when settling maintenance deals through a qualitative case study approach. Three theoretical lenses are used to examine the operationalization of maintenance: industrial network theory; resource based view/extended resource based view and transaction cost analysis .The findings reveal that there is a strong tendency to out-source maintenance. Based on the empirical findings, we comment on strength and weaknesses of the different approaches.
Original languageEnglish
Title of host publication60352 30th IMP
Place of PublicationUnited States
PublisherIMP Group
Pages1-23
Number of pages23
Publication statusPublished - 2014
EventIndustrial Marketing and Purchasing Group Conference (IMP) - Bordeaux, France
Duration: 01 Sep 201403 Sep 2014

Conference

ConferenceIndustrial Marketing and Purchasing Group Conference (IMP)
Abbreviated titleResearch in the IMP tradition
CountryFrance
CityBordeaux
Period01/09/1403/09/14

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