Peter French asks whether maintenance contracting is his only choice

Large Format Review's man on the ground - Signtec's Peter French â€" discusses the spiralling costs of maintenance contracts and questions whether there really are any alternative options open to print shops...

"When buying a large piece of printing equipment, it is easy to overlook the cost of machine maintenance for the second and subsequent years.  Handing over a massive cheque for the purchase of the printer itself is hard enough.  However, when the first anniversary arrives, there can be another heart stopping moment when you open the letter that advises you of the maintenance costs for the next 12 months.

Now, I know that many of you are astute and budget for such things, but - in these times of austerity - it’s very hard to squirrel away money for something you’ll need next year when you are struggling to pay the PAYE and taxes for this financial period.

When I asked our machine supplier for the cost of maintenance, the first figure he uttered rocked me back on my heels.   The parts and labour warranty cost more than 10% of the printer’s original purchase price - and I'd only had the machine a year!

Now, I know that for peace of mind, continuity of business and many other good reasons, this is the right way to go, but it chokes you a bit to hand over another eight grand.

There were other options available from the manufacturer: parts-only or labour-only contracts.  If I knew what was likely to go wrong - i.e. whether it was going to be cheap or an expensive part or whether the fix would require lots of labour â€" these could be possible options. However, on the basis that I’ve not yet acquired the ability to see into the future, these options are extremely risky and could risk putting me out of business altogether if I made the wrong choice.

I was told by the manufacturer that: "Some parts of the machine would cost £10,000 to replace".  So, were I to opt for a labour-only contract, I don’t think that â€" having forked out ten grand for a new gyro-stabilised self-latching grommet â€" I’d be much comforted by the knowledge that the £120 fitting cost would be covered by my labour-only contract.

Another word of warning: Most maintenance contracts on printers don’t include the heads, which happen to be one of the most expensive parts.  If the contract does, it may limit replacements to 2 heads per year or similar.  When we blew a main board a while ago, it took out the light-magenta head with it.  It wasn’t carelessness or poor management, just bad luck.  Had we had previous issues with print heads that year, it would potentially have cost us dear under any new warranty.

This leads me to believe that the only possible alternative to the almost unaffordable gold-plated fully comprehensive safety net has to be the parts only contract.

Or is it?

Having done further research, I’ve discovered that there are such products as machine insurance. Here you pay a monthly premium for insurance cover with a mandatory excess payable for each claim. Strangely enough, the policies I've looked at include damage or failure of the heads.

Unfortunately, with these contracts, you still need to ask the manufacturer - or another third party - to send an engineer and this is where the problems start.  Manufacturers aren't in the habit of employing engineers on the off-chance that you might call them and nor are they likely to store racks of spare parts in case you need them. I'm afraid, that the manufacturer or third party engineers will treat you as low priority; after all, they have their "contract" customers to look after first...

There is also the question of the cost of parts.  I understand that any company that holds a store of parts needs to resell at a price that allows them to recover the cost of warehousing, staffing and associated costs.  I am, nonetheless, staggered by the mark-up we are expected to pay on some items.  I have spent some of my spare hours searching for alternate suppliers and have come up with the following examples:

• Cooling Fan:  Manufacturers price £487.28; Price for same unit from UK supplier £109.00
• Encoder Strip: Manufacturers price £461.89; Price for same item from Canada £90.00 + £27.00 postage

I know I haven't got a maintenance contract, so I'm not considered an important customer but, come on, I don't expect to be punished for buying the machine and I do use the manufacturers engineers who, incidentally also come at a high price.

I always knew that large format printing was not for the faint hearted, but I didn't really understand how expensive it could get. In the past two years - and mercifully thanks to a great piece of kit - we haven't had too many issues, but they don't usually get resolved for less than two grand.

So what is the solution?  To be honest, I don’t really know.   It’s hard to recommend any particular route as there are so many variables associated with each individual business.  However, in general, I would definitely consider the following:

• Prior to purchasing any machines, always ask the manufacturer for the cost of typical replacement parts such as motors, fans and lamps up front as these will be required at some time.
• Look for parts you can source and fit yourself - such as fans and lamps.  Most machines are a clever collection of third party components married to custom circuit boards and encompassed in a nice shiny box.
• Try and push for some commitment from the manufacturer over price increases in the cost of maintenance over a lifespan of, for e.g. 5 years, to protect you from unforeseen costs.
• Finally, make sure you understand what your chosen maintenance option will cost and what it can provide. When you have customers expecting products delivered in 48 hours and the machine fails, what are you going to do?  Look at all the options available to you and weigh up the consequences of failure in advance."

About Peter French: Peter has been working in the sign industry for 9 years having spent a lifetime in IT. Specialising in kick-starting businesses, Peter worked in many diverse business sectors.  For most of the time at Signtec he has been at the forefront of large format printing with both solvent and UV technologies.