A Typical Agreement

Dec. 21, 2004
Rockwell Automation shares its formula for equipment-parts agreements.

According to Steve Stall, equipment-parts leasing agreements benefit manufacturers by increasing productivity because spare parts are onsite or nearby, and asset carrying costs are reduced. With Rockwell, the agreements vary and are based on spare parts being stored onsite and/or shared at local hubs or global regional strategically located hubs. Users pay monthly or quarterly fees, and the agreements usually are in place three to five years. At the end, customers can return equipment, purchase equipment or continue the relationship. Rockwell started offering this service in 1994, and it has grown 25% a year since, serving a variety of customers, from small manufacturers with half a dozen parts to large manufacturers with hundreds of parts, Stall says.

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