This story originally appeared in Biocommerce Week, a newsletter that has been discontinued.
Thermo Fisher Scientific this week introduced a new asset-management services offering, joining a growing list of large research tool providers that have rolled out similar programs over the past couple of years.
As pharma and biotech customers, particularly the large, multinational firms, have taken on more specialized research equipment, the task of managing all of that equipment has become more difficult. For tool vendors, a potentially lucrative opportunity has arisen to provide not only standard service for their own instruments but also multi-vendor asset management, and several of the BCW Index companies have taken on that challenge.
Firms such as PerkinElmer, Waters, GE Healthcare, Agilent, and Molecular Devices, over the past couple of years have rolled out new service programs, shifted resources to new service programs, or acquired companies to help build their service and asset-management offerings.
Thermo Fisher is the most recent of these competitors to launch a new program, and company officials are betting that the breadth of their program and the global footprint of the firm will give it a leg up.
This week, the firm launched its 3D Model integrated service offering, which focuses on a customer’s business objectives, the environment in which it is operating, and its product mix. As part of the service, Thermo Fisher reviews these three dimensions and provides an asset-management plan for each client, said Ed Noe, vice president and general manager of asset- management services for Thermo Fisher.
“We sit down with the customer, we go through a fairly extensive needs assessment, and from that we capture those three key areas,” he told BioCommerce Week. “We come back with a recommended asset-management strategy that will involve all of those plans including the management of service contracts, if that’s appropriate, working with in-house capabilities, providing first-level, direct service, on-site support, multi-vendor support, and pure managed maintenance.”
He said that historically Thermo wasn’t any different from the other instrument manufacturers in the way it approached or provided services. But three of four years ago, some of Thermo’s larger pharma and chemical customers started asking for Thermo to service more than just their own instruments.
“It was a market-driven trend [that we] picked up on,” said Noe. “What Thermo did that was probably different was that [we] looked at this as an opportunity to serve the customer in other areas, looked at the marketplace, and identified a couple of companies that had established programs in asset management,” he said.
Then a few years ago Thermo Electron — prior to last year’s merger with Fisher Scientific (see BioCommerce Week 11/15/2006) — made a couple of acquisitions, adding a firm focused on pure asset management and another on compliance services for regulated instrumentation.
Noe said that with the combination of Thermo and Fisher’s service offerings, the firm can now “cover everything from managing the loading dock, inventory, stock room, chemical management, consumables, point-of-service management, all the way through instrument maintenance, instrument service, and disposition.”
Thermo Fisher currently has asset-management agreements with 13 of the world’s top 20 pharmaceutical companies as well as many “significant” chemical and biotech firms, said Noe. He said the companies are looking for Thermo Fisher to provide “savings, productivity, and ensure compliance on a global basis.”
Customers are trying to optimize their cost of ownership, improve productivity, and improve their return on asset and invested capital, while dealing with compliance issues, he said. “If I’m the user, I’m saying, ‘the best way for me to minimize risk, to be able to predict my costs, and optimize my uptime and utilization, is to probably have a service contract,’” said Noe.
Thermo also offers its customers redeployment services, where it takes equipment that is either not being used or is underutilized, and either finds a buyer for it or finds a place elsewhere within the client’s operations where it can be used.
Noe said that although the firm does not disclose how many employees it has in each department, of the roughly 30,000 global employees of Thermo Fisher there are approximately 3,000 “customer-facing employees.”
“It’s a very simple proposition. Delivering against it with these multi-national global companies is where the model comes in and where the real challenge is.”
He said the integration of the two service and asset-management groups has been smoother than the firms had expected. “The two companies were moving into common areas already,” said Noe. “We also had some partnerships already established between us because of that. The same customers were bringing us together. It was highly complementary.”
A Global Value Proposition
Like some of its competitors, including PerkinElmer and GE Healthcare, Thermo Fisher provides service and asset management for equipment made by multiple vendors and places its employees on site. The number of employees it places at a site varies by customer, and could range between a single site manager and upwards of 30 Thermo Fisher employees, said Noe. He also noted that Thermo Fisher works with over 1,000 OEM service providers.
“Because Thermo Fisher has such a huge footprint as far as the products and services that it offers, and that footprint is in both portfolio — the breadth of what it can cover in the laboratory — as well as global footprint, it put us in a unique position to really work with multi-national companies and provide complete, integrated asset management solutions around the globe for a given company,” said Noe.
“That’s one of the differentiators with the Thermo model,” said Noe. “We have extreme capability and a core competency in asset management married with a global footprint and expansive service and product offering that we can leverage in this.
“It’s a very simple proposition,” said Noe. “Delivering against it with these multi-national global companies is where the model comes in and where the real challenge is.”
Thermo Fisher further expanded its service and asset management capabilities in Europe just two weeks ago. The firm said it would focus on companies based in the UK, Germany, France, Spain, Italy, the Netherlands, and Scandinavia.
But global reach and breadth of offering are not the only important factors for customers, according to Dusty Tenney, vice president and general manager of OneSource Laboratory Services for PerkinElmer.
"They're looking at the level of service, the quality of service, the cost of service — and from that standpoint it's extremely important in the sense that customers look at that as a significant criteria in their decision-making process, and as such, that will become a more significant determining factor in the retention of customers going forward," he told BioCommerce Week last year (see BioCommerce Week 6/28/2006).
According to Tenney, OneSource is one component of PerkinElmer's $250-million per year service business. Noe could not provide a revenue figure for Thermo Fisher’s asset management services business.