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Service provider and lab manager negotiate a contract

Optimizing Service Contracts for Laboratories

A comprehensive guide for decision-makers

Ted Palashis

Ted Palashis is president and founder of Overbrook Support Services. He has presented and published nationally on a variety of topics related to the industry, including the history and growth...

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In the intricate world of laboratories, the sounds of instrumentation go beyond ambient hums and represent a symphony of scientific exploration and accomplishment. Each piece of equipment, with its unique function and purpose, is indispensable in the extensive spectrum of discovery and analysis. However, these instruments' longevity and optimal functionality rely on their innate quality and connection to maintaining them. Laboratories consist of three areas of value: their people, their intellectual property (what they do to fulfill their scientific mission), and the tools of their trade. 

A house cannot be built without the appropriate tools, regardless of how talented the carpenter is or how well-designed the plans are. An appropriately determined service approach, through a contractual commitment by a qualified service provider, will optimize the utilization of a laboratory's instrumentation to enable it to fulfill its mission. Whether backed by the original equipment manufacturer (OEM) or independent service providers (ISPs), these contracts become the backbone of maintaining and optimizing these instruments and their value. Service contracts represent a laboratory's dedication to maintaining consistent operations, ensuring reliability, and safeguarding the quality of research and production results. These contracts bridge the gap between equipment maintenance and the promise of ongoing, reliable performance. More than just addressing equipment care, these service contracts reflect a lab's ambition to achieve peak operational efficiency.

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Factors that contribute to optimizing service contracts

There are multiple factors that contribute to optimizing services contracts for the lab. The factor that is most often at the top of the list is cost. 

Contract costs play a significant role in the decision-making process. While initial contract costs may or may not be appealing, labs must delve deeper into the actual service requirements of the instrumentation and their role in the laboratory. Doing so determines what the contract deliverables should be in relation to what’s needed. Often, it is not simply the discounted cost of a muti-year contract or engaging an ISP at a lesser expense, but other factors that contribute to determining the best approach in optimizing a service contract.

Understanding the functions of the instrumentation and maintenance environment of the instrumentation in the laboratory is a critical factor in this optimization. As many laboratories use a range of instrumentation across different functions, such as production, research, walk-up, and mission-critical instruments, the instruments can be categorized based on their complexity and cross utilization. Each category may demand varying levels of maintenance and attention. An instrument's specific function and its complexity often determines the best service contract approach.

A less highlighted yet important component of service contract quality and optimization is training.

Different levels of contractual service exist: full comprehensive services, which include all parts and labor with periodic maintenance bundled into the contract, to scheduled periodic maintenance and calibrations providing regular upkeep. Outside of contractual service arrangements are time and material services, preferred by labs that want to be billed based on the service time and parts used as service issues arise.  Response times can be considerable based on the service provider’s availability. Each has its advantages, and applicability should be determined by the operational requirements of the lab.

Determining service requirements involves a good understanding of equipment functional priorities and inherent service challenges: age of the instrumentation, service dispatch distances, lack of instrument redundancy, service provider response times, etc.  

Clear performance measures should also be regularly monitored to see whether service contracts provide optimal coverage. These include downtime between repairs, user issues versus maintenance fixes, and reasons for downtime issues that affect instrument performance. This information helps confirm the effectiveness of the contract and can be vital when discussing changes or renewals.

Matching the operational requirements of the instrumentation with a service provider that can deliver on those requirements should be the primary focus of contract optimization.

Choosing between OEMs and ISPs

OEMs typically offer service contracts that promise genuine parts and a deep understanding of the equipment. By default, it is assumed that they have the expertise to ensure the highest level of care for the instruments they manufacture. On the other hand, ISPs might offer flexible solutions that meet or exceed the care standards provided by OEMs. These solutions can be more cost effective and offer quicker response times.

Deciding to transition from one service provider to another may become necessary if a lab finds its existing provider’s service subpar or realizes another provider offers better response times, terms, or is more cost effective. It is important to consider the implications of changing service providers by understanding contract exit clauses, any penalties, and the transition process to a new provider to ensure smooth transitions so as not to interrupt project management, service, and qualification schedules. It is also important to realize that the grass may not always be greener. Thus, the importance of truly understanding the factors that contribute to the decision.

A collaborative approach

Regular evaluations, informed by user feedback and equipment performance metrics, can offer insights into the quality of the service deliverables and required contract adjustments. This iterative process ensures that the quality of the contract is maintained with the changing needs of the lab.

A less highlighted yet important component of service contract quality and optimization is training. Just as owning a car requires a minimal of routine ownership responsibility such as maintaining air in the tires or keeping the windshield washer fluid filled, lab personnel should be trained to troubleshoot minor issues that do not require service engineer involvement. There is undeniable merit in bench-level personnel being trained in routine ownership maintenance and predictable equipment issues that often arise due to deferred attention. This enables lab personnel to address issues preemptively, avoiding the requirement of service personnel to engage in a remedial service call, affecting instrument uptime. 

User training can also help in the diagnostic of mechanical versus operational issues. By being able to determine the difference between an operational and a mechanical issue and by understanding their equipment better, lab personnel can preempt potential issues, optimize equipment use, and ensure smoother operations. It's an exercise in minimizing downtime, maximizing output, and is important in developing a good working relationship with the service provider.

Laboratories are centers of innovation and discovery, and a service provider’s mission should be to support its clients to successfully fulfill their mission to find cures for diseases, make the planet cleaner and safer, provide enough food and clean water, and create products and technology that improve the human experience.

Instrumentation in the lab is essential in these endeavors, and service contracts backed by qualified service providers are essential in keeping instruments running. For those in charge of labs, these contracts are more than just paperwork—they offer peace of mind and the focus to fulfill their mission.