1. Fans & Heaters technical seminar
Long-Term Service Agreements
Jad Yassine

2. Long-Term Service Agreements
Agenda
What is an LTSA and what does it include
How do LTSAs benefit our customers

3. What is an LTSA and what does it include?

4. Howden Aftermarket Strategy
Local Service
Infrastructure
CBS
“Speed & Cost“
KAM &
LTSA
DDA & IIoT
Performance
Upgrades /
Retrofits
Extended
Services
(Turnkey)
This is the aftermarket roadmap with the key message on the vertical axis
To develop the aftermarket business (better: customer services) we need to increase the customer value offered to our customers
Transform from mainly offering product-related services (warranty, parts, incidental services) as a vendor to more-and-more offering solutions (retrofits, turnkey projects) as a solution provider and subsequently offering even more value as a trusted advisor (engineering studies, large revamps, performance maintenance management).
The good news: we already do it, albeit not in a standardized basis. We cannot copy-paste the solutions we are offering in some business units to any other. We excel in pockets ……That is why we need to address all phases and positions, need to improve and develop our proposition as a vendor (OTD, lead time), preferred supplier (LTSA’s), solution provider (turnkey) and trusted advisor (revamp engineering and maintenance partner)
Why is this so important? Well, vendors compete on price and make low margins. For preferred suppliers there is a premium…. But Solution Providers and even more Trusted advisors compete on customer value offered and make higher margins (that is where value selling starts)…..
We need to transform our culture from product-focused to customer focused
Shifting from service supporting the product to service supporting customer’s business
It is about customer’s business and customer’s success

5. What is a LTSA
Definition
A firm agreement to provide services to improve availability, reliability and/or efficiency over a defined number of years
Our LTSA concept is based on a portfolio of standardized service modules - typical services offered. By combining these service modules as LTSA building blocks, we are allowing every customer to design a package that meets their own needs.

6. Long-Term Service Level Agreements
Our approach to LTSA’s
Typical Services
24/7 help desk
Call-out service
Customer stock management
Customer training
Health checks
Howden Interactive Virtual Engineer (HIVE)
Maintenance management
On-line customer portal
Performance upgrade studies
Priority access to spare parts
Remote monitoring
Currently we have service modules available
Spare parts price agreement
Howden offers a range of service modules that can be configured to specific customer needs
OEM maintenance service
Spare part kits
Service exchange parts

7. Call-Out Service
As an example, through a call out service, we can guarantee you that an engineer can reach your site whenever is needed within a minimum period of time.
Includes:
Instant access to Howden engineer in case of planned maintenance or unexpected breakdown
An expert engineer providing you with confidence in their recommendations.
Field report on findings and recommendations
Howden offers an emergency call-out service from a trained service engineer to your site within a pre-defined timeframe

8. Early diagnosis is key to operational security
Health Checks
Early diagnosis
is key to
operational security
Includes:
Condition assessment during site inspection
On site review meeting with relevant plant engineers
A full appraisal of your spare parts inventory and the condition of spare parts held on-site.
The ability to make the right decisions based on accurate information.
A full report detailing findings and recommendations.
Health checks is having technical specialist inspecting your equipments during your outage on frequent basis. He can inspect not only the status of the equipment, but also spares parts to be replaced, available spare parts on stock and see if anything is missing in order to make sure that in your next outage you have all spare parts needed and you don’t have to order any on urgency where lead time can become an issue. He also issues a comprehensive reports based on our findings and after discussing this with the engineers on site .

9. Expert advice, instantly
24/7 help desk
24/7 is important because it gives you an access to a experienced engineer available 365 days. You can discuss with these engineers everything you need related to the equipment. Not only this but they will issue a quarterly or 6 month report based on topics discussed and issues faced. Based on nature of discussions or issues raised, through these reports if they see there is a specific trend then maybe more detailed discussion and different solution is needed which can be approached as a team between the plant and Howden engineers.
Expert advice, instantly
What you get
Immediate access to an experienced engineering team
Available 24 hours a day, 365 days a year
Fast and effective troubleshooting
Agreement on amount of engineering hours available to support customer
Quarterly reports on calls and issues, findings and recommendations

10. Performance upgrade studies
Maximising the advantages of innovation
What we provide
Methodical performance improvement assessment by an experienced Howden engineer
Reliable capital costs and savings projections to support budgeting.
Maximised return on your original investment
Access to knowledge about the most recent developments
These performance studies where we do an evaluation on your equipments based on data provided, a detailed report is discussed with you and then once agreed on we can proceed with the solution. Usually, through these studies we dive to root cause of the problem instead of dealing only with the symptoms, you get the pay back or LOI, an idea of the budget needed and usually solutions generated from these reports lead to saving in operation or maintenance cost. Not only this but Howden is also very active on innovating so it is a way to get the latest technology which is available in the market.

11. Customer stock management
What you get
Confidence that essential spare parts are on hand for all scheduled maintenance
Experts removing the uncertainty and time consuming responsibility of inventory management
Reduced capital outlay with a minimised risk of unscheduled downtime
Storage space can become optimal to site conditions, freeing up space for other necessities
It is simply reviewing your stock and making sure you have the minimum spare parts needed in case of emergency or spare parts needed for next outage. Avoid lead time issues or unavailability of needed stock in case of unplanned outage. So it is about having the right stock nothing more nothing less.
Optimising the balance between cost and benefit

12. Maintenance management
What you get
Expert, systematic analysis of the data generated by your equipment
Advice, based on hard data, about potential process improvements
Appropriate and timely maintenance solutions
Avoidance of unplanned downtime arising from unpredicted conditions
Improving maintenance management by utilising operational data

13. Long-Term Service Level Agreements
Howden Care© Maintenance Service Packages
So in the end what you get is a list from which you can chose and where you have different packages under Howden Care: preventive, predictive, proactive and extended warranty. It is like checklist.

14. Customer value during product life
Performance Management Packages
Extended Warranty Package
Preventative &
Predictive
Management
Packages

15. “How to bend the line”
How do LTSAs benefit our customers

16. Why we developed the Howden Care Program
Product operating costs – hidden costs related to O&M
Maintenance costs
Energy
Mobilisation Costs (last minute)
Time Delays (wrong/missing/expired parts)
Overtime (to catch up on delays)
Unbudgeted Costs (overhauls)
Production Loss …
Hidden Costs ?

17. Total Costs of Ownership$
Time
Manufacturing
Installation & Commissioning
Total
Cost of
Ownership
Operation & Maintenance
Cost for Installation & commissioning
Cost of new system

18. Total Costs of Ownership$
But in higher costs instead
Might not result in cost reduction
Installation & Commissioning
Operation & Maintenance
Manufacturing
And save some more by going cheap during installation & commissioning
Saving some money by squeezing the budget for new systems
Time

19. Might backfire on you during next Maintenance Intervention
Total Costs of Ownership M7
Maintenance Interventions $ M6 M5 M4
Installation & Commissioning M3
Operation & Maintenance M2
Manufacturing
Might backfire on you during next Maintenance Intervention M1
What you do during a Maintenance intervention will determine your future
Saving money by buying cheaper wear parts (for example rings & packings….
Time

20. Total Costs of Ownership
So…… How to bend the TCoO line the right way ??? $
Installation & Commissioning
Operation & Maintenance
Manufacturing
Time

21. Customer Advantages Howden Advantages
LTSA Win-Win Model
What is in it for Our Customers
Win-Win Model: an LTSA can be the framework to deliver support during the full product life cycle after commissioning
Customer Advantages
Howden Advantages
Less risk of equipment downtime.
Lower maintenance costs and improved visibility for planning and budgeting.
Improved level of service and performance.
Potential to offer performance guarantees.
Single point of contact for ease of communication.
Reduced total cost of ownership
Better insight into our customer needs because of a closer working relationship
Improved value proposition
Improved planning and utilisation of service resources
It helps us to become a pro-active service organization
Supports our position as a Trusted Advisor

22. How does a Howden Care Plan work
1. Understanding Customer Needs
2. Drafting Howden Care® Proposal
3. On site Options Evaluation and Scope Confirmation
4. Issuing LTSA and LTSA Execution
5. Yearly Performance Review
7. Changes Over time
Howden Care

23. Thank You!!! …..