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Article | August 31, 1998
What packagers want in turnkey projects (sidebar)
Outsourcing not always 'in'
Although 75% of the survey respondents say they outsource at least some turnkey projects the 25% who don't weighed in very vocally with their opinions.
"We don't think it's possible to do a true turnkey" says a senior engineer for a pharmaceutical manufacturer. "No one coming in can really know enough about internal company nuances. They can do a building just fine but not a sophisticated packaging line. That's why Coca-Cola and Anheuser-Busch each have their own fully staffed engineering groups. Outsourcing is just not worth it. You end up paying for the engineering twice by the time you explain it all."
A mechanical engineer for a major national drug company agrees. "We've never outsourced a turnkey project. Corporate-wide we have had modestly disastrous experiences" he reports. "When you say 'turnkey' here people get hives and break out in a rash. I don't ever expect to do one."
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Others have had negative experiences. "We think we are more responsible than a vendor is. The vendor doesn't know and in most cases doesn't care about our needs" says a project engineer for a national personal care product manufacturer. "The larger the vendor the worse they are to deal with. I've seen some real fiascos like when a major Northeast dairy spent millions on a turnkey project and then had to bring in another company to straighten it out."
Other participants had very specific reasons to keep these projects in-house. "If a project has to interface with our systems we like to do it in-house" states a major brewer's plant engineer. "Sometimes turnkey providers don't see the project's long-term view. They want to get done and get gone."
Still this engineer does see some advantages in outsourcing. "Especially for a union plant outsourcing usually means the project is done on time and at an agreed-upon price. When it's done at plant level it's hard to keep to the budget. Add-ons add up."
Plant conditions can be a factor says an engineer at a Midwest food plant. "We have a tough work environment that outside vendors rarely can fully understand. When we do a project in-house we retain familiarity with the equipment and are more aware of the stresses on our equipment."
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