Outsourcing Asset Management

An Executive Interview with GE Healthcare

Bob Moore of GE Healthcare examines the benefits of contracting out scientific asset services.

“A major pharmaceutical company in the US identified us as one of their top 30 suppliers”
-Bob Moore, GE Healthcare

NGP. Why does GE Healthcare provide scientific asset services (SAS)?
Bob Moore. If you look at the traditional model of laboratory equipment, pharma and biotech companies have relied on the original equipment manufacturers (OEMs) to maintain their inventories. However, there are a number of disadvantages to this model, including the administrative burden and the time it takes to manage vast inventories, which can divert resources away from scientific projects. Our comprehensive range of services can support scientific asset management from the acquisition of equipment with financing, to, the installation and utilization of assets, and ongoing maintenance of equipment. We will also provide expert advice in the area of biopharmaceutical manufacturing.

NGP. Could you describe what service models you offer, how they fit within SAS and what are their key differences?
BM. Essentially, we have three models. The full service model comes with a complete team of site-based engineers – from one or two through to as many as required. In this model, we cover all the service, costs, repairs, parts and labour involved in managing your complete range of assets. It provides the lowest administrative burden for the customer and is provided as a fixed fee to enable ease of budgeting. It works best for less risk-tolerant customers or in cases where the customer’s maturity and knowledge on asset management is relatively low.

The second option is a preventative maintenance contract, with remedial services at additional costs. The team of on-site engineers will often be smaller than the full service model and this would be better for risk-happy companies or companies that have a very good knowledge of their exact asset management requirements, as they won’t be getting the full range of our services. This model is a bit more flexible to changes in the activity of the customer or to alterations in the instrument population, but has an increased administrative burden.

The final model is the cost plus model, where customers pay on an ad hoc basis and only for the specific activities that are being undertaken. Individual customer departments can be charged based on the maintenance demand. This model is highly flexible, but customers take a higher risk; for example, with higher costs if more maintenance is required than initially anticipated.

NGP. Which factors influence the selection of the most appropriate service model?
BM. There are a number of factors that influence what is the best model for a particular company. It could be down to what resources you have, the number of facilities and their locations; how many instruments you have; what are your objectives (e.g., reduce costs/manage risks); or what is the level of understanding of your service needs? Customers can be completely confident that we will help them select the model that best fits their requirements. For all models, GE Healthcare takes ownership of asset management. We work with customers’ in-house teams and share resources with them to optimize asset management.

NGP. What differentiates GE Healthcare’s SAS models with other industry solutions?
BM: GE Healthcare stands out because we become an extension of the customer’s internal team. We put together experts specific to the customer and have dedicated on-site teams that work directly with the customer. We can be in the background or can be more visible – whatever the customer wants. Where we really differentiate ourselves is our level of experience and the results we achieve with any asset.

Because we’re on-site, response is immediate, and our experience with Lean and Six Sigma principles means we can offer unsurpassed knowledge to further reduce costs. We do work alongside laboratory and regulatory staff, drawing on our change management expertise to help customers through the implementation process with the minimum of fuss. We also help to train customers’ technicians and staff to help improve performance.

NGP. What are the advantages and benefits of each of the SAS models?
BM. Simply put, tangible results. We go beyond the basics that some asset service providers deliver and we have proven to reduce customer costs by up to 25%. What we’re doing is getting a handle on customers’ inventories so they don’t need to worry about asset-related issues. We provide a monthly or quarterly check on all inventories so customers can track their assets (online and offline) and its movements. One of the major benefits is that we do this for any asset, regardless of the OEM; and with our AssetPlus enterprise management suite (a hardware and software solution) customers can manage inventories, service histories and compliance requirements.

NGP. How flexible are these models?
BM. The models are all incredibly flexible and can be accommodated on one site or across multiple sites; for example, if you are a small company in a hub or on a science park, you might want to share asset management costs with two or three other companies located at your facilities – we can accommodate that. We recently implemented a flexible scientific asset service programme for one of Europe’s leading regional biotechnology groups, ERBI. It’s a cluster based in Cambridge, UK, that consists of many small companies with limited resources to handle administrative tasks. Our programme successfully helped these companies to reduce the time spent managing service providers, negotiating prices and scheduling service calls – leaving them to focus on their core scientific competencies.

NGP. What trends do you see in the coming decade on outsourcing asset services?
BM. I believe that for pharma and biotech companies to optimize their development and manufacturing processes, they need to be in a position where all their equipment is successfully managed. This means really understanding your assets and having thorough knowledge of the equipment you use. It’s also about staying on top of your inventory. Longer term, customers will be looking to maximize the utilization of their assets, possibly work with shared assets and expect technology in asset management, such as RFID. Service providers themselves will offer a greater range of services, such as full life cycle asset support, including validation programmes, process troubleshooting and asset disposal. Customers are looking for long-term partnerships with their service providers and that’s what we offer.

NGP. What feedback have you had from customers?
BM. The feedback has been incredibly positive and it’s been a great experience for both our on-site teams and our customers. Our on-site teams have won awards from clients that are normally reserved for their own internal departments – that’s how close and integrated we get with customers and is a wonderful endorsement. Also, a major pharmaceutical company in the US identified us as one of their top 30 suppliers – in a list of 10,000 companies. But we certainly don’t get complacent and are always looking to develop our services and offerings. That’s why we place great emphasis on continual improvement and feedback.

NGP. What experience do your engineers have, and do they all work for GE Healthcare?
BM. Our engineers have a broad and extensive range of experience. We have a continual training programme to ensure they are up to date with the latest equipment and technology, but many of them have more than 20 years of experience with OEMs of the most common laboratory processes. Because GE Healthcare SAS covers the full gamut of laboratory equipment, we have engineers that are experts right across the board. In cases, where we call in OEMs, customers don’t have to worry about managing any of their assets either – we’ll handle that for them.

NGP. How do you help customers to make informed purchasing decisions?
BM. At the end of the day, we’re not here to buy equipment for our customers. We’re here to help them make informed decisions about what equipment best suits their needs and then we manage that equipment for them, giving them the opportunity to focus on what they are best at – developing and manufacturing drugs. Ultimately, GE Healthcare can help customers significantly reduce costs and raise productivity, usually within a year, which ultimately leads to increased profits.

Bob Moore is the North American Service Sales Director for GE Healthcare’s life sciences business. Bob’s expertise is in offering service solutions for the company’s customer base, including service agreements on GE Healthcare equipment, performance solutions consulting services, training services and multi-vendor scientific asset services on laboratory equipment maintenance.