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Reduce Maintenance Contract Costs by 50%

 

The Overview

One of Rincon’s clients, a global provider of voice, data and Internet services, approached Rincon to help them solve a problem. Maintaining spares in every facility with maintenance TAC contracts on legacy platforms for their longhaul network was cost prohibitive. Rincon designed an alternative program to replace the client’s traditional OEM maintenance program. With the new program, Rincon offered a maintenance agreement that removed the TAC support component for the products that no longer required that level of support, assumed the responsibility for sourcing and warehousing the spares, and subsequently reduced the client’s maintenance contract costs for those products by 50 percent.

The Details

Just before their maintenance agreement with the OEM was set to expire, the client reached out regarding the possibility of transferring to a new maintenance contract with Rincon for their legacy platforms. Working closely with the client, Rincon developed a new program that included new maintenance agreements and sparing for the specified products. The client provided a list of the network components they wanted Rincon to evaluate for the program and included the historical failure rates for each item. Rincon reviewed the list, analyzed the data, made recommendations on how many spares were necessary for each component, built out the required stock in their bi-coastal warehouses to accommodate the client’s needs, and launched the new program.

The Results

The client is now paying half of what they were paying the OEM originally under the terms of their maintenance TAC agreements. This allowed the client to focus the bulk of their $200 million annual maintenance budget with the OEM on new platforms and technology that help them stay competitive around uptime in the marketplace.

Why Rincon?

Rincon leverages its secondary market expertise, world-class operations, intellectual property including proprietary software and other internal tools, and utilizes ISO and Six Sigma methodologies and processes to successfully deliver programs designed to help clients reduce costs and gain efficiencies around their maintenance contracts, sparing, and RMA initiatives. Rincon currently manages sparing programs for several Tier 1 clients. Rincon can tailor the program to accommodate per occurrence, monthly, quarterly, annual or multi-year maintenance agreements.