Optimal support strategy for mechanical systems under contract realm

Purpose – Original equipment manufacturers (OEMs) start providing support to products that helped them in sustaining their business worldwide. The customers are entering into contracts with the OEM, to get the required level of performance but at minimum possible cost. It required the work distribution between OEM/service provider and the client, and may formalize through contract. The contract structure depends upon the number of player involved (customer, OEM and third party) and the support activity. The different contract alternatives can be formulated and the best one may be selected on the basis of minimum Life cycle cost. The paper aims to discuss these issues. Design/methodology/approach – In this work, mathematical models are developed; which are implemented on a real life problem. The developed models are optimized in context to preventive maintenance schedule. Findings – In this research, important issues are listed; research steps and mathematical models are presented. The problem has been identified from the literature perspective for mechanical systems. A methodology for formulating and selecting the optimal contract structure is also proposed. The model has been implemented on a real life problem, in which the OEMs provide support to their make installed at Compressed Natural Gas workstation in National Capital Region, India. Originality/value – The research results of this paper will contribute both academic and empirical value.