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

Driven by an intensely competitive world, the use of outsourcing is extensive andgrowing especially in the service business area. Outsourcing provides companieswith benefits such as cost reduction and performance enhancement. Despite theseadvantages, companies need to be aware that successful outsourcing requires anappropriate long term strategy in managing the relationships with their providers. Inturn, the providers have to develop collaborative relationships with their customers inorder to improve customer satisfaction.Although relationship management of relevance to outsourcing is recognised as animportant concept, it has not received attention from both practitioners andresearchers, especially with regard to aircraft maintenance outsourcing which isconsidered to be critical outsourcing associated with high financial and strategic risks.Therefore, the aim of this research study is “to improve aircraft maintenanceoutsourcing through relationship management”. This research has been divided intothree stages to achieve the research aim.The first stage related to an exploration of the key factors for the management ofoutsourcing relationship, starting with a review of the relevant literature. A multiplecase study was then selected to investigate today’s practices of the management of theIT outsourcing relationship, which has similar characteristics to aircraft maintenanceoutsourcing. A questionnaire survey was also conducted to explore key factors ofrelationship management for aircraft maintenance outsourcing. With these threesources of evidence, a conclusive finding is that relationship management ofrelevance to outsourcing comprises six key factors which are clearly definedrequirements, agreement, delivery governance, service delivery, performanceevaluation and inter-organisational coordination.The second stage focused on exploring how the relationship between an aircraftmaintenance provider and an aircraft maintenance customer is managed. The threecases study relationships featuring the four case companies were selected to carry outan in-depth investigation of relationship management for aircraft maintenanceoutsourcing. The researcher used interview, observation and documentation to collectdata from these four case companies. The findings showed that the six key factors identified in the first stage influence the establishment and development of therelationship between the aircraft maintenance provider and customer. Moreover,external factors also have an impact on the way that both parties manage theirrelationship.The third stage was to develop a proposed approach to performance measurementwhich is viewed as a key factor of the management of the relationship between anaircraft maintenance provider and an aircraft maintenance customer. The researcherconducted an action research in cooperation with the main subject of this research.The study discovered that the gap model is applicable for performance measurementin aircraft maintenance outsourcing. The improved version of performancemeasurement model includes new performance metrics that are essential formonitoring the gaps between the provider and customer.