Case Study #125 | Preventive Maintenance Only vs Full Service Contract: Schneider Electric
Nationwide Power™ is the leading provider in the critical power supply industry. Our core business is the sales and service of uninterruptible power supplies and UPS batteries, along with supporting other critical power components such as emergency generators, switch gear, and HVAC.
We publish critical power related case studies, highlighting best practices and quality standards. In this case study, we feature a recent scenario where an NP customer moved from a full UPS service contract to a PM only contract in an effort to reduce costs. In the long run, however, the customer’s out-of-pocket expense significantly exceeded the cost to maintain the full UPS service contract.
|Application||Technology Data Center|
|Synopsis||Lack of full UPS service contract cost client roughly $29,000 in ongoing, billable repairs.|
|Preliminary Actions||Ongoing repairs over the course of 6 months.
Customer had placed multiple service calls due to concerns with power quality and issues with their UPS equipment. All calls resulted in billable events. In each event, the required repairs were completed and the UPS was returned to a normal mode.
|Resolution||After approximately $29,000 in out-of-pocket expense, the UPS is back to useful operating condition.
The NP recommendation stands for customer to complete preventive maintenance in a timely fashion and reconsider upgrading to a full UPS service contract where time and materials are covered.
|Root Cause||In a cost cutting effort, the customer opted for a preventive-maintenance-only contract instead of continuing their full UPS service contract. The difference in price between the two contracts is roughly $1,500. Assuming the customer would not experience any issues with their UPS equipment over the contract period, they could potentially save that $1,500 difference. However, due to the age and condition of the equipment, having no billable incidents was very unlikely.
The customer’s total out-of-pocket expense during the contract period was roughly $29,000. Had the customer invested that $1,500 into the full-service contract, 100% of the out-of-pocket expense ($29,000) would have been covered by Nationwide Power.
In addition, customer was unresponsive in scheduling preventive maintenance service calls to keep the equipment in optimal running condition, further putting their equipment at risk.
|Additional Reading||The Importance of UPS Preventive Maintenance
Preventive Maintenance or Full Service Contract?
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