Maintaining Your Equipment Without Breaking Your
Transcription
Maintaining Your Equipment Without Breaking Your
Maintaining Your Equipment Without Breaking Your Budget ABRF 2015 Annual Meeting St. Louis, Missouri March 28th-31st, 2015 Joanne Lannigan, M.S. Flow Cytometry Core University of Virginia SOM [email protected] Background Capital equipment investments in SRLs are in the $100s of thousands to millions Limited availability of funding for replacements Equipment Maintenance & Repair is often the second largest expense in a SRL budget Instrument downtime or poor performance impacts revenue generation Proper management of this expense can provide an overall cost savings for a SRL Multiple Approaches OEM service contract Full vs. limited (PM only; parts only, etc.) Third party company Asset Management Company Manages all equipment In-house and subcontracting service contract Full vs. limited (PM only; In-house/self repair parts only, deductible etc.) Time & Material OEM 3rd party Self Insurance Pros & Cons OEM contracts Pros Cons Parts availability Expensive Guarantee response Limited plan time Manufacturer trained Software revisions/upgrades flexibility Pros & Cons Third Party Contracts Pros Cons More cost effective Parts availability Flexible plans No Software Guaranteed response time Less bureaucratic revisions/upgrades Pros & Cons Time & Material Pros Can be cost effective over time Paying only for services/parts used Cons Delayed response time No Software revisions No technical support No PM included Pros & Cons Asset Management Companies Pros Can be cost effective over time No need for multiple contracts Cons Delayed response time No technical support Lack expertise in highly complex equipment Pros & Cons Self Insurance Pros Can be cost effective over time Only pay for what you actually need Risk is spread over multiple instruments (departments) Cons Delayed response time No technical support May take a few years to be cost effective Which Approach is Best for You? Factors to Consider Age of equipment Frequency of use Repair/downtime Revenue generation history Complexity of technology Redundancy Criticalness to operation Local expertise Current maintenance costs Satisfaction with current service provider Other Factors to Consider T&M costs (travel/labor/minimum) Cost/availability of replacement parts Response time required Need for telephone support Self-insurance mechanism available Cost to replace Impact of downtime beyond revenue Preventive Maintenance?? Flexible contract options This Means You Need DATA!! Instrument data tracking Purchase date/warranty expiration Service history Contract, warranty, T&M Downtime/revenue lost Maintenance Costs Contract, T&M, Parts, PM Utilization information Revenue produced Scenario #1 T&M vs. OEM Service Contract Instrument X is 5 years old Average revenue/yr. over 5 years $46.4K OEM service contract Years 2-4 (year 1 warranty) No third party service available Two backup instruments available Some in-house expertise Parts not readily available for purchase T&M vs. OEM Service Contract Year Year 1 Service contract price # calls Warranty Year 2 Net contract Net T&M Year 3 Net contract Net T&M Year 4 Net contract Net T&M Year 5 Net contract Net T&M $25,000.00 Total Net contract Net T&M $110,000.00 Estimated Labor/Travel 3 NA 1 Estimated Parts NA $2,500.00 Downtime 5 days $500.00 20 days 40 days $35,000.00 $9,720.00 $31,440.00 $44,000.00 $15,796.00 $31,092.00 $57,000.00 $26,948.00 $36,896.00 $64,000.00 $29,380.00 $31,380.00 $5,120.00 $10,240.00 40 days 80 days $232,000.00 $107,132.00 $157,688.00 $14,868.00 $16,312.00 2 days 4 days $27,500.00 3 $7,500.00 $4,000.00 4 days 8 days $28,000.00 5 $12,500.00 $3,500.00 9 days 18 days $29,500.00 5 17 $12,500.00 $35,000.00 Revenue Generated Revenue Lost $32,000.00 $640.00 $15,000.00 $23,000.00 Savings over 5 years = $50,556 $280.00 $560.00 $704.00 $1,408.00 $2,052.00 $4,104.00 Things to Consider T&M vs. OEM Service Contract No PMs Delayed response times Additional loss of revenue Catastrophic failures No telephone support Scenario #2 T&M vs. Third Party Service Contract Instrument X is 5 years old Average revenue/yr. over 5 years $46.4K Service contract Years 2-4 (year 1 warranty) Third party service available at 20% below OEM Two backup instruments available Some in-house expertise Most parts available for purchase outside OEM T&M vs. Third Party Service Contract Year Year 1 Service contract price Warranty Year 2 Net contract Net T&M Year 3 Net contract Net T&M Year 4 Net contract Net T&M Year 5 Net contract Net T&M $20,000.00 Total Net contract Net T&M $88,000.00 # calls Estimated Labor/Travel 3 NA 1 Estimated Parts NA $2,000.00 Downtime 5 days $400.00 2 days 3 days $22,000.00 3 $4,800.00 $3,200.00 4 days 6 days $22,400.00 5 $6,000.00 $2,800.00 9 days 12 days $23,600.00 5 $10,000.00 $12,000.00 20 days 25 days 17 $22,800.00 $18,400.00 40 days Revenue Generated Revenue Lost $32,000.00 $640.00 $35,000.00 $14,720.00 $32,320.00 $44,000.00 $21,296.00 $35,296.00 $57,000.00 $32,548.00 $46,148.00 $64,000.00 $35,280.00 $36,880.00 $232,000.00 $135,204.00 $179,548.00 Savings over 5 years = $44,344 $280.00 $420.00 $704.00 $1,056.00 $2,052.00 $2,736.00 $5,120.00 $6,400.00 $8,796.00 $11,252.00 Things to Consider T&M vs. Third Party Service Contract No PMs Delayed response times Catastrophic failures Proprietary parts availability No software upgrades Scenario #3 OEM vs. Third Party Service Contract Instrument X is 5 years old Average revenue/yr. over 5 years $498K Service contract Years 2-4 (year 1 warranty) Third party service available at 20% below OEM No backup instruments available No in-house expertise Most parts are readily available outside OEM Service Contract: OEM vs.Third Party Year Year 1 Year 2 OEM contract 3rd Party Year 3 OEM contract 3rd Party Year 4 OEM contract 3rd Party Year 5 OEM contract 3rd Party Total OEM contract 3rd Party Service contract price # calls Warranty Downtime 3 5 days 1 2 days $200,000.00 $160,000.00 3 4 days $220,000.00 $176,000.00 5 9 days $224,000.00 $179,200.00 5 20 days $236,000.00 $188,800.00 17 40 days $880,000.00 $704,000.00 Revenue Generated Revenue Lost $450,000.00 $9,000.00 $517,000.00 $312,864.00 $352,864.00 $546,000.00 $317,264.00 $361,264.00 $498,000.00 $256,072.00 $300,872.00 $479,000.00 $204,680.00 $251,880.00 $2,490,000.00 $1,540,880.00 $1,716,880.00 $4,136.00 $8,736.00 $17,928.00 $38,320.00 $78,120.00 Savings over 5 years = $176,000 Things to Consider OEM vs. Third Party Service Contract OEM known failures/fixes Proprietary parts availability Expertise of third party Proprietary issues Availability of less than full service contract plans Technical phone support Scenario #4 Self Insurance vs. OEM Service Contract Instrument X is 5 years old Average revenue/yr. over 5 years $498K Service contract Years 2-4 (year 1 warranty) Budget 50% of OEM contract, risk pool carryover No backup instruments available No in-house expertise Some parts readily available outside OEM Scenario #4 Self Insurance vs. OEM Contract Year Year 1 Year 2 OEM contract Self insured Year 3 OEM contract Self insured Year 4 OEM contract Self insured Year 5 OEM contract Self insured Total OEM contract Self insured Service contract price Warranty Carryover Actual # calls Downtime 3 5 days Estimated Labor/Travel Estimated Parts NA NA Annual Net 1 2 days $200,000.00 $100,000.00 $0.00 $200,000.00 $100,000.00 $2,700.00 $6,000.00 $91,300.00 $4,800.00 $75,000.00 $30,200.00 $6,000.00 $125,000.00 -$19,000.00 $10,000.00 $35,000.00 $73,000.00 $0.00 $23,500.00 $0.00 $241,000.00 3 4 days $220,000.00 $110,000.00 $91,300.00 $220,000.00 $18,700.00 5 9 days $224,000.00 $112,000.00 $30,200.00 $224,000.00 $81,800.00 5 20 days $236,000.00 $118,000.00 -$19,000.00 $236,000.00 $137,000.00 17 40 days $880,000.00 $440,000.00 $880,000.00 $337,500.00 Savings over 5 years = $542,500 Things to Consider Self-insurance vs. OEM Service Contract Delayed Service Response Loss of revenue Long term vs. short term Catastrophic years Technical phone support Larger the risk pool the better Bottom Line You need good historical data to make good decisions!! No one option fits all equipment or core environments Weed through the threats and promises Ask the tough questions: Guarantee response times Available technical support Parts availability Alternate service plan options PM included Expertise of service personnel Understand the basics of your instruments and perform regular routine maintenance Be prepared for catastrophic failures