Performance-based Fees for Equipment.
SKF announced its fee-based Rotating Equipment Performance (REP) service whereby the customer can adopt an SKF solution for a regular fee, as opposed to a one-time capital expenditure. The fee would be based on the solution meeting certain performance metrics. All-inclusive, the fee would cover provision of bearings, seals, lubrication and condition monitoring.
REP can be applied to both long-established and modern equipment, including conveyor belts, pumps and crushers.
The company reported the new business model eliminates a conflict of interest. In the traditional transaction-based model, suppliers' profits depend on numbers of parts sold and not on improvements in machine performance. With REP, both the supplier and the customer benefits from maximized machine productivity, reliability and efficiency.