Service agreements

High-end automation may still include service as part of the installation, but increasingly, past initial purchase (and perhaps, installation), a service agreement may be needed with an automation vendor to ensure efficiency and return on investment. After all, the very word investment implies return; otherwise it's called cost.

07/01/2005



Related reading

High-end automation may still include service as part of the installation, but increasingly, past initial purchase (and perhaps, installation), a service agreement may be needed with an automation vendor to ensure efficiency and return on investment. After all, the very word investment implies return; otherwise it's called cost.

Support services for automation include phone support, on-site support services (project design, engineering, integration, installation, startup, maintenance, optimization, field repair, retrofits, modernization, and more), along with spare parts services, and training. ARC Advisory Group says the global market for supplier-provided automation services is growing more than 9% a year. If you're spending more on services, are you reaping the harvest?

To establish the required return for a support program, companies should assess current manufacturing costs and production output against defined goals and customer demand. That's among recommendations from Tom Greene, director, field support services, Rockwell Automation. "Goal is to fully understand priorities and expectations to define a support program that will provide the best return on investment (ROI)." To best quantify ROI for service agreements, Greene says, manufacturers should link program results to specific metrics, such as cost/downtime reduction and throughput/quality improvement. These metrics often are calculated using two key performance indicators (KPIs): return on net assets (RONA) and overall equipment efficiency (OEE).

Claire Cerrato, manager, GlobalCare, GE Fanuc Automation, says tools related to service agreements are improving. "In recent years we have seen changes in multiple areas: increased demand for and acceptance of electronic tools, including online case management and easy-to-use self-service tools; simplified contract management across products; and an expectation of increased service value," Cerrato says. For GE Fanuc that includes using remote access and advanced troubleshooting tools to solve customers' issues, and tighter integration of hardware and software. "As enhancements are made to controls and instrumentation, programming software also is enhanced, and customers benefit from cost-effective access to the software upgrades."

Skipping a service agreement can result in paying emergency repair rates and dealing with the unexpected downtime of a catastrophic failure, says David Wampfler, Bosch Rexroth, national sales manager for service products. "Many service providers are flexible when it comes to payment and can offer reduced rates in exchange for a long-term commitment. It's an obvious point," Wampfler says, "but rates for mature or legacy machinery will be higher than rates for more current hardware. Replacement parts may also be harder to obtain."

Greene adds that the key to success is careful planning and clearly defined goals and responsibilities; a well-designed support agreement can pay for itself quickly in hard dollars and in such areas as improved customer service, better product quality, and greater peace of mind.

For more on these companies, visit www.boschrexroth.com , www.gefanuc.com , and www.rockwellautomation.com , or find products and services at www.cesuppliersearch.com .


Online Extra Reading

Three contributors to this piece offered extensive advice on automation services for this Control Engineering “Back to Basics” page. Here are links to their unabridged views.

  • Minimize risk in selecting an automation support services provider
    &ADD LINK to item in July 7 System Integration beat news (CC part) >

  • How to get the most from your service agreements and providers
    &ADD LINK to item in July 7 System Integration beat news (CC part) >

  • Get answers to questions on services for automation
    &ADD LINK to item in July 7 System Integration beat news (CC part) >



Ask a potential service provider these questions

Options for support services should match lean initiatives, productivity goals, engineering capabilities, and budgets, suggests Rockwell Automation. Ask if your potential service provider:

Offers sufficiently qualified staff and the financial resources to deliver timely, reliable support;

Has a thorough understanding of your plant-floor assets and your manufacturing environment;

Understands your automation technology;

Demonstrates proof of expertise in your industry and the standards/regulations governing it;

Measures the commitment to success of your operation;

Defines methodology for calculating and reporting financial and production improvements resulting from delivery of services within an agreed-upon payback period; and

Identifies and addresses problems and causes of equipment failure across multiple plants or processes, if needed.



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