Remaining flexible: Pay-per-use leasing of machines

What has become common concerning carsharing and streaming in people’s private lives has now also been introduced into the pharmaceutical and biotech sectors by Körber: With its pay-per-use service, Körber offers pharmaceutical and biotech customers an innovative financing solution that enables companies to lease machines instead of buying them. Moreover, they only pay for the actual use of the machines. This gives companies a new degree of flexibility, as exemplified by a European pharmaceutical manufacturer.

The Business Area Pharma of the international technology group Körber has adapted this concept for a use-based financing service. It is one of the first suppliers of machines and facilities for the pharmaceutical sector to do so. The innovative financing model helps companies improve their liquidity because they no longer have to buy machines. They lease them instead and only have to pay for their use in line with their actual production volume. “At our Business Area, this financing model is currently especially in demand for Track & Trace solutions. However, the pay-per-use service is available for almost any machine from our entire portfolio,” says Christian Frenz, Area Sales Manager at Körber. It makes companies extremely flexible. In addition, it opens up new possibilities for machine procurement and creates more room for making other investments.

Best practice: Pay-per-use service solves customer problem

The advantages of the pay-per-use service are demonstrated, for example, by a European pharmaceutical manufacturer who was already using this financing model in 2018. A change in the law forced the customer to quickly add a system for legally compliant serialization to the packaging line at one of its locations. However, the company hadn’t planned a budget for the corresponding machine in that fiscal year. In order to continue with production, the company would have needed to transport the packaged products from the manufacturing facility to another location so that they could be coded there. It would have been a logistical nightmare! The customer turned to Körber and discovered the latter’s pay-per-use service to be the ideal solution.

The Track & Trace experts from the Business Area Pharma developed a flexible leasing solution for the machine that the customer required. This enabled the customer to avoid paying the high initial costs and the associated difficulties in the planning of its budget. The required machine, an ItemUnit-TE Basic, was installed at the customer’s location only a few weeks later. The customer was able to assure the production line’s continued operation, thanks to the modular system for the serialization, verification, and labeling of individual pharmaceutical sales units with a tamper-evident seal.

The price per unit produced drops at higher capacity utilization

The pay-per-use service not only makes the procurement of a machine simple and transparent, but also the invoicing of the leasing payments. The payments are made at fixed times (e.g. annually) and are based on the number of units that the leased machine has produced. “In line with the expression ‘pay per use’, the customer only pays for the actual use of the machine,” explains Frenz. This results in several benefits for companies: Unlike the case with conventional machine purchases, there are no high initial costs. Moreover, in many cases capital does not have to be tied up for the long term in fixed assets, provided the customer’s balance sheet permit this. “Instead, pay-per-use customers don’t pay until the machine begins production and thus contributes to their value-added,” says Raphael Just, Business Development Manager at Körber. This also means that the price per unit produced drops as capacity utilization increases.

In addition, the leasing payments enable the cost of a machine to be spread over several years. If the amounts produced by the machine decline during this period, the leasing payments correspondingly decrease as well. And there are additional benefits for pay-per-use customers. The machine leasing offer includes a host of services. Experts from Körber help the customers launch production, provide on-site training for their employees, and take care of the maintenance and spare part procurement of all of the pay-per-use machines. “As a partner, we thus share the risks and opportunities with our customers,” says Just.

“This means that companies don’t have to make a final decision when they conclude a leasing agreement. They can respond to developments as needed throughout the entire term of the contract,” says Just. In a market environment that is characterized by complex manufacturing processes, declining numbers of units, and customized products, the pay-per-use service greatly reduces the risks customers face when they acquire a new machine. The use-based model keeps the leasing costs manageable and also enables them to be incorporated into the current annual budgets. In this way, Körber provides pharmaceutical companies with an alternative to the usual purchase of machines and has more flexibility to meet the sector’s current and future challenges.

Any questions?

Would you like to learn more about the pay-per-use service and our leasing machines?

Please get in touch with us!

Körber – delivering the difference in pharma