Page 19 - Industrial Technology EXTRA - 6th April 2020

SMART MANUFACTURING... SKF

installation just as the incumbent part reaches the these models and they will continue to increase in
end of its useful service life. popularity, as more companies begin to exploit the
potential of digitalisation to create new ways of
Service-based contracts financing operational performance.
Further, through the use of condition monitoring
technology and the digitalisation of the industrial The importance of trust
process, traditional transactional models are The increased integration in the supply chain and
increasingly being replaced by performance and the emergence of service-based contracts requires a
function-based contracts. SKF is beginning to see high degree of trust to be established between the
this shift, with more companies choosing either its parties involved so that the arrangement works
performance- or functional-based contract models. effectively. The companies that will benefit most
The former is a base fee paid monthly, with a bonus from Industry 4.0 technologies in the coming years
performance payment added at longer intervals if will be those that are prepared to enter into long-
the customer’s KPIs are achieved. Functional model term relationships with their suppliers and
agreements, meanwhile, commit the service customers, and keep their minds open to new
provider to deliver in terms of functionality for an ways of working with one another.
agreed fee. There are real advantages to both of www.skf.co.uk

All your industrial automation
components from one trusted supplier

Offering technical expertise and application solutions

Panel Pressure & Flow Sensors & Safety Machine Vision Motors

www.oem.co.uk 0116 217 9090

6 April 2020 • INDUSTRIAL TECHNOLOGY EXTRA! • p19