RMGT Seek to Establish True Cost of Service Contracts

In Offset Presses on September 7, 2017 at 7:47 am

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Japanese offset press manufacturer RMGT is launching a new initiative aimed at compiling a comprehensive understanding of the cost, benefits, and value of service contracts for litho presses, as often favoured and promoted by European equipment manufacturers. The survey being compiled will be supported by Surrey based MPL, RMGT’s European Technical Support Centre.

The survey will cover the full range of sheet fed printers from large international multi-site groups to small local print shops. Many of the target businesses have already volunteered to take part in the research.

The survey has been launched in an effort to gain a clearer understanding of why printers pay large sums for service contracts, particularly on new or nearly new equipment.

Mark Stribley, Joint Managing Director of MPL, (pictured above, right) explained further: “Service contracts seem to take a variety of forms – RMGT is keen to understand the differences and the costs involved. Printers that we have spoken to only recently are confused with regard to what is included and what is excluded from the contract.

“The RMGT mentality says “if our equipment breaks down, we re-design elements of that equipment so that it doesn’t”. RMGT reflect this in the printing equipment that they manufacture. It is very rare that a component fails, and even rarer that an RMGT press actually stops printing because of it. The development of the service contract has been heavily influenced by European manufacturers – RMGT feel the need to understand this part of the product package.”

The survey will seek to understand what printers want from a service contract, as well as how the pricing for such an element is calculated, and how printers measure the value of having a contract in place. “It is assumed that the price is created by the supplier multiplying the number of times that a machine will break down by the typical service call charge – but this would also depend, of course, if the cost of spare parts was included in the contract,” said Mark Stribley.

Questions posed within the survey focus on cost, understanding of what the contract covers, and whether the printer has a mechanism designed to measure the value of the service contract for a given piece of equipment.

“The service contracts provided by many press manufacturers have become an increasingly expensive addition to the cost of the machine. We view these as an expensive luxury for RMGT presses, but other suppliers seem to focus on the “benefits” that these offer the buyer of a new press. We know our own breakdown record and in our opinion RMGT users simply can’t justify a service contract to cover the rare occurrence of malfunctions.

“In these days of fine margins, printers have to examine the total cost of machine ownership, and that includes the true cost of a breakdown. It’s not just the annual cost of a service contract, or the price of an ad hoc visit from an engineer, plus the cost of any parts needed. It has to also include the costs involved in not being able to produce for a given period of time – the hourly rate, multiplied by the amount of hours that the press was not able to print – plus any overtime hours that need to be paid to get production back on track. You might argue that there could also be a sum added in for the potential of not being able to deliver a job on time, or even for losing a customer, but that is all rather difficult to quantify.”

About M Partners

In 2010 M Partners took on the management of both sales and service for RMGT Litho Presses in the UK and Ireland. This relationship has since grown to encompass responsibility for technical service across the whole of Europe for the now re-named RMGT business. M Partners also manage spare parts storage and distribution for the former Mitsubishi branded machines across Europe.

This representation joins established products such as GUK folding and inserting equipment, primarily focused towards the pharmaceutical packaging sector. More recently the business has expanded into the digital market place following an announcement regarding exclusive distribution of large format printing equipment from Korean manufacturer DGI, and an agreement to re-sell Canon equipment, with a special focus on the unique proofing capabilities of those products.

M Partners offers manufacturers considerable marketing and business expertise across both the printing and packaging sectors and provides high-quality national coverage for sales, support and technical service.

The Joint Managing Directors established M Partners Ltd in 2006 after gaining many years of industry experience in senior management roles at a major press manufacturer and used equipment dealer. They were responsible for corporate and product marketing for pre-press, press, post-press and service, plus operational control for digital, consumables and used equipment divisions.



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