10/01/2024 | Press release | Distributed by Public on 10/01/2024 01:05
It's time to shift your focus from short-term fixes to long-term goals. Are you targeting uptime, fuel savings or lower emissions? Do you know the best way to hit your target? This article reveals your number-one route to success.
Because ships are a long-term investment, it makes sense to focus on long-term goals when managing your vessel's lifecycle. This helps you plan better so that you:
Juggling all these factors while keeping your core operations running smoothly and safely can be a challenge. Traditional service agreements can help you manage the load, but they often don't give you what you need to tackle these challenges effectively.
There are seven signs that you might benefit from an outcome-based service agreement. Download the white paper "How a service agreement could give your maritime business a competitive edge" and discover what these signs are and how these types of agreements work:
When you choose a supplier that offers performance guarantees, the supplier becomes a partner who guarantees that together you will achieve a defined quantifiable outcome. For example:
Focusing on a quantifiable metric instead of micromanaging individual systems and technologies provides a solid framework to achieve your goals. When your agreed outcome is achieved you and your supplier share the rewards. If you don't achieve the agreed outcome, the losses are shared too.
This kind of service agreement is a genuine commercial collaboration based on joint key performance indicators, shared benefits and shared risks.
One of the biggest advantages of an agreement with performance guarantees is that you get the best bang for your buck from investments in hybrid systems, future fuels and novel energy-saving technologies.
There are three steps to setting performance guarantees:
For example, if your goal is to cut fuel consumption the agreed metric could be fuel efficiency, or tons of fuel burned over a specific period. If your fuel consumption drops during that period, you and your supplier share the financial gains from the common savings pot.
Because you are both playing for the same side, your supplier will do everything they can to make sure the outcome is realised. This might mean:
This is different from a regular service agreement, where your supplier gets paid for these kinds of activities whether you reach your goals or not.
Several Wärtsilä customers are already reaping the rewards of agreements that include performance guarantees. For example:
A service agreement with performance guarantees can cover individual equipment elements like your ship's powertrain, or be structured so that it focuses on the overall vessel level.
For example, powertrain-focused guarantees could include:
Vessel-level guarantees could include:
Like a tailored suit, these different elements are combined into a whole that is far greater than the sum of its parts to maximise your profitability.
Performance guarantees are a unique approach in the maritime service agreement landscape because they are a win-win for both you and your supplier.
A service agreement with performance guarantees can help you achieve your goals whether you're targeting uptime, fuel savings or lower emissions - or even a combination of all three. Your supplier will do everything in their power to make sure the outcome is realised, because you are both working towards the same goals. That's performance, guaranteed.
Uncover the secrets of how an outcome-based service agreement can guarantee you a head start on the competition. Download this white paper: How a service agreement could give your maritime business a competitive edge.
This article about outcome-based service agreements and performance guarantees first appeared as one of Wärtsilä's Insights stories.