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    BP Publication - Considerations When Extending A MARC

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    leaw81
    This document provides best practices for extending maintenance and repair contracts (MARCs). It discusses reviewing the existing contract's performance and financials, understanding the customer's long-term strategy, establishing new terms and conditions based on the mine plan and motivations, developing new rates through financial modeling, and including risk mitigation strategies. Extending MARCs properly can result in higher profitability and increased customer satisfaction by addressing both parties' needs and objectives.

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    BP Publication - Considerations When Extending A MARC

    Uploaded by

    leaw81
    197 views3 pages
    This document provides best practices for extending maintenance and repair contracts (MARCs). It discusses reviewing the existing contract's performance and financials, understanding the customer's long-term strategy, establishing new terms and conditions based on the mine plan and motivations, developing new rates through financial modeling, and including risk mitigation strategies. Extending MARCs properly can result in higher profitability and increased customer satisfaction by addressing both parties' needs and objectives.

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    Best Practice CATERPILLAR

    Original Title

    BP Publication_Considerations When Extending a MARC

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    This document provides best practices for extending maintenance and repair contracts (MARCs). It discusses reviewing the existing contract's performance and financials, understanding the customer's long-term strategy, establishing new terms and conditions based on the mine plan and motivations, developing new rates through financial modeling, and including risk mitigation strategies. Extending MARCs properly can result in higher profitability and increased customer satisfaction by addressing both parties' needs and objectives.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    197 views3 pages

    BP Publication - Considerations When Extending A MARC

    Uploaded by

    leaw81
    This document provides best practices for extending maintenance and repair contracts (MARCs). It discusses reviewing the existing contract's performance and financials, understanding the customer's long-term strategy, establishing new terms and conditions based on the mine plan and motivations, developing new rates through financial modeling, and including risk mitigation strategies. Extending MARCs properly can result in higher profitability and increased customer satisfaction by addressing both parties' needs and objectives.

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    BEST PRACTICE SERIES

    Considerations When
    Extending a MARC
    Component
    Component MARC
    Maintenance Application Life
    Rebuild Management
    Management

    Considerations When Extending a MARC .................0


    1.0 Introduction........................................................1
    2.0 Best Practice Description ..................................1
    3.0 Implementation Steps........................................1
    4.0 Benefits .............................................................2
    5.0 Resources Required..........................................2
    6.0 Supporting Attachments / References ...............2
    7.0 Related Best Practices ......................................2
    8.0 Acknowledgements ...........................................2

    October 08
    1008-3.3-1130
    300 Hamilton Blvd., Ste. 300, Peoria, IL 61629-3810, U.S.A. catminer.com
    CAT GLOBAL MINING BEST PRACTICE SERIES

    1.0 Introduction

    There are many reasons a dealer and customer would want to extend a Maintenance and Repair
    Contract (MARC) on an existing machine or fleet of machines. There are also a number of
    considerations when developing the contract extension. It is important to understand how the
    current contract is performing financially as well as the customers motivation for seeking an
    extension. In the end, Proper financial modeling and a solid understanding of the customers
    mine strategy are critical to developing a contract that will provide value for both parties and keep
    the customer looking to the Caterpillar dealer to help manage their fleets for a long time to come.

    2.0 Best Practice Description

    This Best Practice discusses the following:


    1. Why extend a MARC?
    2. Terms and Conditions of an extension
    3. Financial Modeling and Rate Development of an extension
    4. Risk Mitigation

    The information presented in this Best Practice was developed from the experience of those
    considered to be the premier Caterpillar MARC dealers worldwide.

    3.0 Implementation Steps

    Review the attached presentation and proceed with the following:

    1. Determine the main reasons (motivations) for extending the contract


    a. Both customer and dealer motivations
    2. Engage the customer to understand their long-term strategy
    a. Both the contract fleet and the entire mine-site
    3. Establish the Terms and Conditions of the contract extension
    a. Based on the mine plan and above motivations
    4. Develop the new contract rates based off of the original contract performance and financial
    modeling
    a. Review the existing contract data and financial performance
    b. Take into account customers long-term objectives
    5. Include a risk mitigation strategy when developing both the Terms (3) and the Rates (4)

    THE INFORMATION HERON IS THE PROPERTY OF CATERPILLAR INC. AND/OR ITS SUBSIDIARIES. WITHOUT WRITTEN
    PERMISSION, ANY COPYING, TRANSMITTAL TO OTHERS, AND ANY USE EXCEPT THAT FOR WHICH IT IS LOANED, IS PROHIBITED.

    DATE CHG
    NO NUMBER
    Considerations When Extending a MARC 10/30/2008 1008-3.3-1130
    00
    Caterpillar: Confidential Yellow -Repoduction Constitutes an Uncontrolled Document- 1 of 2
    CAT GLOBAL MINING BEST PRACTICE SERIES

    4.0 Benefits

    Considering these factors when extending a Maintenance and Repair Contract can help a dealer
    to mitigate much of the contract risk up front resulting in fewer unexpected and unbudgeted costs.
    In addition, appropriate financial modeling of the current contract when developing the extension
    will likely result in higher contract profitability. Finally, understanding the customers needs and
    objectives when building a contract extension will increase customer satisfaction and can result in
    future business.

    5.0 Resources Required

    1. Existing contract documentation


    2. Existing contract to date actual data in order to assess the current financial performance
    3. Financial Modeling Software (Analyzer or equivalent)
    4. Understanding of the customer expectations, plans for and economic life of the mine

    6.0 Supporting Attachments / References

    Accompanying document: Contract Extension Strategies: Considerations when extending a


    MARC.ppt

    Note: The information contained within the attached presentation are not rules, rather
    considerations that can be applied to a dealers / customers specific circumstances.

    7.0 Related Best Practices

    0407-3.3-1075 Contract Language


    0906-3.3-1009 MARC Rate Development
    0906-3.3-1021 Developing a MARC Management Plan

    8.0 Acknowledgements

    This Best Practice was written by:


    Greg Fett
    Regional MARC Consultant (North America)
    ph. 309-494-4469
    [email protected]

    Content was developed with assistance from the following:


    Shaun Brown - Trakindo
    Walter Burls - Barloworld
    Rolando Carrasco Finning S.A.
    Jim Davey Caterpillar Inc.
    Doug Eady Hastings Deering
    David Griffin Cashman Equipment
    Peter Scheppel - Barloworld

    THE INFORMATION HERON IS THE PROPERTY OF CATERPILLAR INC. AND/OR ITS SUBSIDIARIES. WITHOUT WRITTEN
    PERMISSION, ANY COPYING, TRANSMITTAL TO OTHERS, AND ANY USE EXCEPT THAT FOR WHICH IT IS LOANED, IS PROHIBITED.

    DATE CHG
    NO NUMBER
    Considerations When Extending a MARC 10/30/2008 1008-3.3-1130
    00
    Caterpillar: Confidential Yellow -Repoduction Constitutes an Uncontrolled Document- 2 of 2

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