Heavy Maintenance Contract
Introduction
An HM contract (heavy maintenance contract) serves as an agreement between
the customer and the MRO service provider.
The heavy maintenance contract is specifically designed to be used within
the Airframe MRO industry as well as other heavy maintenance industries, where
it is relevant. For the other purposes of maintenance, the service contract
functionality can be used. Note: Neither the service contract
nor the HM contract is available for service quotation, except for handling
part provisioning rules.
An HM contract can be defined with following information:
- The main information, such as, the customer with whom the contract is
made the coordinator of the contract, the valid period of the contract etc.
- Contract groups and appropriate commercial rules.
- Non routine cap prices for single defects or multiple defects.
- Part provisioning rules.
- Pre-posting information.
- Alternative customers for whom the contract is valid as well as the
contract valid sites.
- Additional contract specific price agreements.
Although the heavy maintenance contract is defined per customer you have
the option of connecting additional customers. This serves two purposes:
- Allows many customers to use one heavy maintenance contract, e.g., if
different maintenance organizations within a company are defined as separate
customers but are still allowed to use the same service contract, they can
be included as additional customers.
- Allows you to enter a different payer, e.g., if one of the aforementioned
maintenance organizations have to be invoiced instead of the parent company,
the maintenance organization can be entered as the alternative customer
but to do so the maintenance organization has to be connected as an additional
customer.
An HM contract can only be connected through a maintenance order, i.e., on
the order level or maintenance event level.
Heavy Maintenance Contract Composition
A heavy maintenance contract can consist of one or more contract groups,
these contract groups are used to create one or more contract lines under the
contract, and for each contract line there can be one or more contract rule
that describes how the work is to be invoiced.
Contract Groups
Contract groups are contract specific definitions to distinguish different
categories of Maintenance Events and Task Cards. It is contract specific as
it is required to change based on different parameters as customer and MRO relationship,
aircraft type, nature of work etc.
Contract Lines
Contract lines are defined under the contract and hold the information required
to apply the contract for a given Maintenance Event or Task Card. It is recommended
to use appropriate contract groups to distinguish the behavior and not the contract
line. Also, for a smooth use of the functionality, having a single contract
line per contract group or only one primary rule per group is recommended.
The contract line should be connected to get the contract applied on a Maintenance
Event or a Work Task.
Contract Rules
Contract rules are used to define the commercial behavior of each contract
line. If there are no rules defined for a contract line, no contract rules will
be applied on the generated work tasks. Instead,
the price logic that is used for work tasks will be applied.
The commercial behavior is mainly decided by the commercial type on each
contract rule, i.e., Fixed Price, Resources Used
and Free of Charge.
| Commercial Type |
Description |
| Fixed Price |
There are mainly three modes of setting a fixed price:
Price Rollup: When price rollup is used, all the
prices of resources and material planned under the contract rule will
be aggregated. On a maintenance order, each event has at least one task
card connected. The resources and material on the task card should be
connected to a sales part that belongs to the workshop site of the maintenance
order. The Quantity x Sales Part Price would be the total price
for each planned resource or material line.
Sales Part Price: When price rollup is not used,
and a sales price is not set up for a contract rule, the fixed price
will be taken directly from the given sales part.
Manual Price: If a sales price is defined in the
contract rule, this price will override all above and
will be used as the fixed price.
|
| Resources Used |
Usual time and material pricing will be applied.
Transaction level rules could be set for such contract rules. Those
are, Revenue % and cost-based pricing. Price logic on the work task
will apply. |
| Free of Charge |
All transactions under this rule will be set to revenue zero.
|
Qualifying Transactions for a Contract Rule
General
It is required to set up a selection criterion for transactions which are
applicable for each contract rule.
This is done by setting the following information.
| Field |
Description |
| Event Type |
Decide if the rule belongs to routine work or non routine work. It
is also possible to set rules for both.
|
| Item Type |
Cost type and sales group are the two options that are valid to
select from.
If cost type is used, it is allowed to set up one
of the cost types used in work tasks. For example, cost type Material
could be setup to handle all materials planned or used.
Sales
group is a more granular level approach. All transaction sources such
as materials and resources are connected to a sales part. Sales part
is defined with a sales group. When this sales group is used on a contract
line matching planned or used revenue lines with sales parts belongs
to same sales group are eligible. Sales group could be used to set a
specific rule for a specific group of transactions.
For example,
set a sales group for Engineering to handle the revenue of engineering
time. If a sales line falls under a contract rule defined for a cost
type and also a contract rule defined for a sales group, the contract
rule defined for the sales group will take precedence over the sales
group defined for the cost type. As to the above example when Engineering
has a separate sales group rule, a rule with cost type personal will
only be eligible for sales lines which do not belong to the above sales
group.
|
| All Other |
Such rules will apply for all sales lines which are not belonging to
any other rule (i.e., cost type or sales group). |
Free Caps
Caps are defined for non-routines with the Resource Used
commercial type. Up to a certain point (cap limit) it is considered as free.
Above that it is charged.
Cap limit could be defined for a price or for quantity. This is mainly
to handle an hour limit for resources and a price limit for materials.
It is required to define a sales part for such capped lines to price the
over and above transactions.
Grouping Level
For Cap handling and Fixed Price handling it is mandatory to have a grouping
level. For a Fixed Price Line, it is required to consider the grouping level
as the level where the fixed price is placed. It could be for the total work
scope or any lower level as Maintenance Event or Task Card.
For caps grouping level is the originating task card or the event. It is
also possible to use originating work task as the grouping level. Cap will be
evaluated on this level considering all non-routing within each grouping item.
Work scope option is there if a single limit is applicable for the total scope.
In addition, it is possible to setup the grouping level as non-routine, if the
cap is applicable on each individual non- routine.
Non Routine Exclusions per Contract Line
Exclusions are applicable only for reported non-routines under each contract
line. Contract line is automatically inherited from the originating task. If
the lowest function level on non-routine is belongs to the excluded list or
a child function, then non-routine would be excluded from the scope. It is possible
to continue with the non-routine by changing this to a different contract line
which is not excluded.
Heavy Maintenance Contract Status
After the contract details are entered, it must be activated before it can
be used
in the application. To use this contract valid period should match the
period which it is planned to be used.
Manage Heavy Maintenance Contract for a Visit
Following are some pointers to guide you on how to process the contract for
a heavy maintenance visit.
1. Decide whether the work is under a Service Contract
or a Heavy Maintenance Contract
In some scenarios, there might be multiple contracts for same top part.
For example, aircraft storage program might cover under a service contract while
Heavy checks are covered with a Heavy Maintenance Contract.
If the work is covered with a Heavy Maintenance Contract set the contract
type as Heavy Maintenance Contract on a newly created Maintenance Order.
2. Decide whether to use the regular contract or to create a visit specific
contract
Usually, the customer and MRO provider will have their agreement for a
longer period covering several visits. In such scenario just use the contract
already defined. Optionally if the agreement changes on each visit after negotiations
or if it provides more control over the quoted work it is recommended to move
forward with a visit specific contract. For that user may copy the existing
contract to a new Contract ID. Set active and connect it to a Maintenance Order.
3. Load Work Scope with Contract Groups
Most convenient option to get the correct contract groups loaded to the
scope is to set the contract groups in the work scope CSV file. When work scope
is loaded to the Maintenance Order correct contract lines will be fetched based
on these contract groups. If there are multiple contract lines valid for the
contract group and contract, make sure one of them as primary, appropriately
to fetch it automatically.
4. Investigate the connected Contract Lines on the Maintenance Order/Events
Check whether connected contract groups are correct, and all events are
with contract lines. At this stage it is possible to add or modify the contract
lines connected on maintenance events.
5. Release and Transfer to Work Tasks
When a Maintenance Order is released, Work Tasks will inherit the contract
line information based on the values defined on connected maintenance event.
6. Manage Non Routines
Contract line is automatically inherited from the originating task. Setup
corrective cards and set to under preparation. Contract will automatically apply.
If caps are exceeding, it is possible to create a quotation or manually approve
to proceed. It is allowed to proceed with risk.
7. Invoice Based on Contract
No need to manually apply the contract as it is always automatically applied
for all actual transactions. It is possible to create an Advance Invoice based
on the fixed lines created. Also allowed to invoice progressively as well as
at completion of work.
Generate invoice preview for heavy maintenance scope will provide the option
to generate invoices based on Maintenance Order and/or Non-routine Quotation
ID. It also possible to invoice routines and non-routines separately if required.
For a non-routine till it is approved, a sales price will not be included
to the invoice. When approved if there is a quotation ID, quoted price would
be used for invoicing. Otherwise contract rules will apply on reported amounts/transactions.
8. Changes to Invoiced Values
It is allowed to enter additional sales lines and change existing sales
lines in the invoice preview, if needed. Thus, all the rules from contract and
price logic could be overwritten manually if needed before and/or at invoicing.
Note: Permission should be set accordingly.