Keith Glatz, CPPO, is Purchasing Agent for the Village of Skokie, Illinois. He recalls one change he saw when he came to his new position three years ago. �Our equipment maintenance system worked well, but we felt we could do better. We had many different vendors and maintenance schedules requiring extensive paperwork and oversight. The Village wanted better controls and improved savings.�
Earlier this year, Skokie began discussing the outsourcing of their equipment maintenance management with the industry�s leading specialist in such outsourcing, Specialty Underwriters. These discussions led to Skokie�s contracting of Specialty Underwriters� TELESERVE program, beginning in July of this year. Glatz describes some of the benefits of outsourcing: �Our new outsourcing program has helped us consolidate responsibilities so we can work more efficiently. It�s improved controls. It�s helped improve the efficiency of the work we�ve received from some service vendors, and in other cases brought in new vendors. It�s given us a sharper perspective on this major budgetary item, and also helped us obtain cost savings. The savings are significant, but they�re actually not the greatest benefit.�
A more important benefit to Skokie of outsourcing has been its improved flexibility in dealing with service vendors. Says Glatz, �In the past, if we wanted to change or terminate a working relationship with an under-performing service vendor, the system that we -- and most every municipality -- had to go through involved a pretty involved default process. Now I just contact Specialty Underwriters and have them handle it or advise us. Putting service vendors on performance-based contracts has made these relationships more of a partnership, more productive, and more efficient.
�Instead of having to scramble ourselves for savings, we now have someone else do the scrambling for us.�
Woodbury, Minnesota, a suburb of St. Paul, has been the fastest-growing community in Minnesota over the past six years. William Lehner, Woodbury�s Assistant Director of Finance, recalls the challenges faced by his city several years ago: �Rapid growth meant more and more technical and office automation equipment, a tangle of maintenance relationships, and escalating, erratic costs. We would have a relatively �good� maintenance year, then a relatively �bad� one. Woodbury needed improved process controls and cost controls.�
They got it in 1995 from Specialty Underwriters� maintenance insurance program. Lehner describes the two most important benefits of this program: �Suddenly, we could pool equipment maintenance categories to control costs. And we had flexibility in our vendor relationships. If I had a cooperation problem with a vendor, now I could say, �I�m not locked into using you; I can call your competitor.�
The bottom line, says Lehner, is now working to increase the awareness of more departments within the city of equipment maintenance insurance. �We want to identify all the departments and equipment that have maintenance contracts, and work toward including them in the program. It makes sense for the city, and creates real savings for our taxpayers.�
How did Specialty Underwriters stake out its leadership position in equipment maintenance management? Jim Cruse, Specialty Underwriters� Vice President / Sales, recalls that after the company�s founding in 1982, it rapidly established a unique service position. �Over the years, Specialty Underwriters has developed a set of resources that is really exceptional -- our system, personnel, and most of all your equipment repair data base,� says Cruse. �Today all these resources are made available in our TELESERVE program, which consolidates service contracts and provides significant administrative relief. Nobody else provides the efficiency benefits that we do in these areas.
�One of the inherent benefits of TELESERVE is the consolidation of multiple maintenance contracts. Typically, for every maintenance contract a municipality has, it is required to seek three bids and to place an announcement ad. For 50 contracts, that�s 150 bids, a jumble of paperwork, and many hours of employee-time.
�Now, there are some collateral benefits as well.� Adds Cruse. �Broader coverages and a guaranteed annual budget backed by the financial strength of CNA, one of the largest and most solid companies in the business.�
After working with municipalities throughout the country, Cruse has seen different sets of challenges and differently defined goals. Specialty Underwriters provides a product range to meet these different challenges and different goals.
�What all our clients have in common,� observes Cruse, �is a need to operate more efficiently, more effectively, to deliver better value to their constituents. The real �product� we deliver is improved operational efficiency.�
Specialty Underwriters is now an affiliate of CNA Warranty, a strategic business unit of CNA, one of the largest commercial insurance groups in the United States. For Jeff Moon, CNA Warranty�s C.E.O., the decision to add Specialty Underwriters� equipment maintenance management programs to the service offerings of the company was an easy one. �We were impressed by their customer orientation. Many of Specialty Underwriters� strategic focuses, such as municipalities, were ones that CNA had shared. We saw that they had solid technical competency and an outstanding track record in these areas. We like the added value to our customers, and our customers have liked what they�ve delivered.�
Equipment maintenance management programs are fast emerging as a major benefit to municipal managers. As Skokie�s Glatz puts it, �Outsourcing has improved the way our vendors look at us. And it�s improved the way our constituents look at us.�