March 26, 2013 by Kevin Keras
As many of you know, systems can be very expensive so end-users are making critical decisions on behalf of their employers, both on how well their money is being spent and what are reasonable expectations as to when the system will begin to show a return on that investment. There is always concern about that ramp up time and the problems you may encounter along the way, so the question of warranty becomes very important to the lab manager or principal user of the system.
Most system integrators go through a very similar process regardless of who the end user is. It generally all starts with a customer needs assessment, whereby a sales manager (usually accompanied by an Application Scientist) asks a number of questions prior to generating a system concept proposal. While it may seem tedious to the end-user, (I know what I want, why can’t these people just give me their quote?) this is a critical step in ensuring long term success. I have been involved in a number of situations where a customer had budgeted hundreds of thousands of dollars but could not provide a single manual method they wanted to automate. Not good.
Weeks (more like months) after the system is designed/proposed and agreed upon/purchased by the customer, a date is usually scheduled for a FAT (factory acceptance test) whereby the customer visits the integrator and goes through a “buy-off” checklist prior to shipment. This buy-off is best done with the actual customer methods (minus real chemistry) to ensure that the system performs as agreed upon prior to shipment. Remember, shipment means breaking down the system and packaging so that it can be “re-integrated” yet again upon arrival at the customer site whereupon it goes through the SAT (site acceptance test) which is basically the same buy-off as the SAT, albeit with actual chemistry. Once completed, you get a handshake (maybe a hug if it goes really well) and “TA-DA !”you own the system.
Most integrated systems come with a one year warranty. This can mean different things to different integrators but in my experience, entails parts and labor only (travel is not included). It also does not include operator induced failures like crashing a robot into an instrument. In general, most systems include a fair number of third party instruments that the integrator does not manufacture and they don’t make a lot of money providing them. These instruments come with their own warranties (usually 1 yr) and the integrator almost always passes these on to the end-user, acting as the first point of contact if a failure occurs. Since the instruments can often reside at the integration firm for several weeks prior to FAT, it is important for end-users to understand their warranty…’what is covered?’, for how long?’ and ‘when does the clock start ticking (upon shipment, acceptance)?’.
As mentioned in prior posts, an extended warranty for an integrated system can often cost 10-15% of the purchase price of the system. Some integrators offer an incentive (discount) if you purchase such an extension with they system, or prior to expiration of the standard one year warranty. Should you choose that option?
In short, the answer is no and I will tell you why. Let’s assume we are talking about a $350K ELISA system that includes a robot mover, bar code reader, liquid handler, plate washer, ambient storage hotels and plate reader. Those majorcomponents probably account for less than 50% of the price of that system. The remainder is comprised of things that don’t wear or break (system tables, enclosures, scheduling software, PC and …labor). That last one is a biggie. Integration is hard work and proper design, build, programming and testing prior to SAT can include hundreds of person-hours. That is commonly referred to as NRE or non-recurring engineering. A warranty for such a system could cost upwards of $50K, or more (not including travel) but you really should only care about the instruments…not the other stuff.
So, if you are faced with a decision regarding extending the warranty of your integratedsystem…push back. It’s pretty easy to determine the list price for each instrument in a system and request a contract that is based on just those costs. You could also go directly to each manufacturer and request contract pricing on their product only. If that is too time consuming or a management hassle you don’t need, you may want to reach out to one of the major MVS (multi-vendor services) providers (Thermo, PE, Johnson Controls, Agilent, GE) or smaller ISO (independent services organizations) like The LabSquad.
Don’t be nervous about system support…be informed.