The machine price on our ferrule assembly machine quotes is easy to read. Installation and commissioning costs are where buyers get burned. I have watched that happen.
To negotiate installation and commissioning costs with an automatic assembly machine supplier, define the scope of work line by line, agree fixed or capped pricing, set objective Factory and Site Acceptance Test criteria, assign site-readiness duties, and fix warranty and after-sales charging rules before issuing the purchase order.
That answer is short. The details are not. Below, I walk through the four questions buyers ask me most often, and I show what we actually write into our contracts.
A distributor in Mexico once sent me a competitor's quote with one line reading 'installation included.' He asked what it covered. Nobody could tell him.
You know installation and commissioning costs are included only when the quote itemizes engineers, site days, travel, utilities connection, programming, acceptance testing, and training. A single line saying "installation included" usually means time-and-material billing applies unless a written lump sum states otherwise.
The word "included" does a lot of work in a quote. It rarely does enough. Before I can tell a buyer what is covered, I need to know what the supplier means by each term. So let me start there.
These two words get bundled together. They should not be. They involve different people, different durations, and different risks. On our terminal and ferrule assembly machines, the mechanical installation 1 is usually the quick part. The commissioning is where the time goes, because the bowl feeders, pneumatic fixtures, and sensors must be tuned to the buyer's actual parts.
| Activity | What it actually covers | Who usually controls the risk |
|---|---|---|
| Installation | Positioning, leveling, anchoring, wiring, pneumatic connection, guarding, connection to agreed utilities | Shared: supplier does the work, buyer prepares the site |
| Commissioning | Startup, calibration, software setup, sensor and actuator adjustment, integration with upstream and downstream equipment | Mostly supplier |
| Factory Acceptance Test 2 | Testing against agreed specs at the supplier's plant before shipment | Supplier |
| Site Acceptance Test | Repeating performance tests at the buyer's plant after installation | Shared |
| Training and handover | Operator training, maintenance training, documentation, backups, sign-off | Supplier delivers, buyer provides trainees |
| Production ramp-up | Support after acceptance until output stabilizes | Often excluded unless negotiated |
If the quote does not say which of these rows are priced, the answer is probably "fewer than you think."
I ask buyers to request a quote that separates at least these lines: pre-installation site survey, freight and unloading, rigging and leveling, mechanical installation, electrical installation, pneumatic and utility connections, PLC and HMI programming 3, communication with plant systems, calibration and tooling setup, FAT support, SAT support, production trial runs, operator and maintenance training, documentation and software backups, travel and lodging, overtime and holiday rates, spare parts, and post-acceptance support. A supplier who refuses to split these lines is pricing uncertainty into a lump sum and hoping you do not notice.
Industry budgeting references put installation and training at roughly 5–10% of a custom automation project. That sounds small. But integration as a whole can represent 30–50% of a robotic system's total project cost. So a low machine price with a vague installation line is not a bargain. It is an open invoice. ABB's published installation conditions illustrate the mechanism: installation services 4 may be invoiced on a time-and-material basis unless a lump sum has been agreed in writing. Many suppliers work the same way. "Included" without a written lump sum means hourly billing.
In our own practice, the tooling and molds are built alongside the machine and verified through sample testing before delivery. That makes it easier for us to quote commissioning as a defined work package, because we have already run the buyer's parts. A supplier who has not sample-tested your product cannot honestly fix a commissioning price. Ask whether they have.
The hardest lesson from our early export projects was simple. Questions not asked before the purchase order become arguments after the engineer lands.
Ask how many engineers and site days are included, whether travel days and field service rates for overtime are covered, who supplies electricians and rigging, how many production trials and return visits are included, what happens if the Site Acceptance Test fails, and whether operator training is billed separately.
I keep a question list in our project files. I send it to buyers before they sign, not after. It is blunt on purpose. A supplier who answers all of these clearly is a supplier you can hold to a price.
| Area | Questions to ask | Why it matters |
|---|---|---|
| People and time | How many engineers? How many site days? Do quoted days include travel days? | Two engineers for ten days is a different cost from one engineer for twenty |
| Travel and rates | Are flights, lodging, meals, visas, and local transport included? What are the field service rates for overtime, weekends, and holidays? | Travel can be a large share of commissioning cost on overseas projects |
| Scope boundaries | Who supplies electricians, riggers, forklift operators, and cranes? Does the supplier connect utilities or only provide connection points? Is programming for third-party equipment included? | Basic facility work billed at supplier rates is the most common surprise |
| Testing | Are customer-supplied parts in the commissioning plan? How many production trials? What are the pass/fail criteria for the Factory Acceptance Test and Site Acceptance Test? | Without criteria, "operational" gets confused with "production-ready" |
| Failure handling | How many return visits are included? What happens if SAT fails? Is debugging caused by supplier workmanship free? | This is where blame starts if it is not written down |
| Handover | Is operator training delivered during commissioning or billed separately? Are manuals, electrical drawings, PLC code, and parameter backups included? | Missing backups make you dependent on the supplier for every small change |
| After-sales | What are the after-sales charging rules? How long is free after-sales support? When does the warranty start and end? | This is what prevents both sides from passing the buck later |
The last row is the one I push hardest. Before any purchase, I want the buyer and our team to agree on who owns which cost, and to draw the responsibility line clearly. That means understanding the commissioning and after-sales charging rules, the length of free after-sales support, and the warranty period. When those three things are written down, there is nothing left to argue about when a problem appears in month four. When they are not, both sides start pointing fingers, and the buyer's budget absorbs the result.
Newer options deserve questions too. Ask whether the supplier can run software pre-checks and virtual commissioning before shipment. Ask whether they offer a hybrid model, where their engineer guides your local technicians by video or augmented reality for part of the setup. For our bowl-feeder machines, remote diagnostics can resolve many sensor and recipe issues without a flight. But remote work should supplement on-site obligations, not replace them. Physical leveling, safety validation, and production trials still need someone standing at the machine. Ask which tasks the supplier will do remotely and which they commit to doing on site.
Sending two engineers from Wenzhou to Slovakia costs real money. I weigh that against remote pre-checks every time we price a job. Both options need clear rules.
Avoid hidden travel, labor, and delay charges by agreeing a responsibility matrix for site readiness, capped travel and per-diem rules, pre-agreed field service rates, a written change-order process, and a clause that separates supplier-caused delays, which cost you nothing, from documented customer-caused delays.
Most delay disputes I have seen share one cause. The machine was ready and the site was not, or each party assumed the other would prepare it. The fix is boring. Write down who does what.
| Item | Buyer | Supplier |
|---|---|---|
| Floor loading, foundations, machine layout, access | Prepares | Provides drawings and utility requirements early |
| Electrical supply, disconnects, compressed air, vacuum, exhaust | Installs to agreed specification | Specifies and connects at agreed points |
| Network ports, cybersecurity approvals, MES connectivity | Provides and approves | Validates communication as part of commissioning scope |
| Forklifts, cranes, rigging | Provides unless priced otherwise | Supervises positioning and leveling |
| Permits, inspections, safety approvals, lockout procedures | Obtains | Supplies safety documentation |
| Test parts, materials, trained operators | Supplies in agreed quantities | Defines quantities in the acceptance plan |
| Interfaces with existing equipment | Makes available on schedule | Integrates within agreed scope |
Our engineers issue site-preparation drawings and utility requirements early enough for the buyer to act. I also ask for a documented site survey. If the supplier is pricing from assumptions, make them list the assumptions before they quote.
I recommend fixing these before the purchase order: economy or business-class rules, maximum reimbursable hotel rates, per-diem limits, whether travel days are billable, visa costs, local transport, the number of included visits, who pays for a return visit after a failed SAT, and standby time rules. On overseas projects, travel and engineering time are the two largest drivers of FAT and SAT cost, and SAT usually takes longer because it includes plant integration and training. Negotiating a local subcontractor for basic electrical work and a remote diagnostics link for software issues can cut flights without cutting quality.
Then apply one rule firmly. A customer-requested change is chargeable. Correction of an error in the supplier's original scope of work is not. Change control should never become a tool for shifting supplier design mistakes onto the buyer.
A strong clause separates supplier-caused delay from buyer-caused delay. If the supplier's incomplete software, missing documentation, or defective components stop commissioning, the buyer pays nothing for idle days or repeat travel. If the site lacks agreed utilities or approved test parts, a reasonable standby or remobilization charge applies. The key word is documented. The supplier must show evidence of the buyer-caused delay, not just claim it.
On one terminal crimping line 5 we shipped to India, a feeder sensor drifted two weeks after handover. The contract decided who paid, not the phone call.
Protect your commissioning budget with payment milestones tied to the Site Acceptance Test, measurable performance guarantees with defined test conditions, a warranty start date linked to acceptance, written after-sales charging rules and free support duration, a service level agreement, and supplier-paid correction of defects within its original scope.
The contract is where everything above gets teeth. I will cover the commercial structure first, then the clauses that matter after the engineers go home.
| Structure | Best for | Buyer risk | Supplier objection and how to resolve it |
|---|---|---|---|
| Fixed price | Well-defined machine, stable specs, known site | Low; higher initial price | Supplier carries uncertainty. Resolve with a documented site survey and sample testing before quoting |
| Time and materials | Legacy-equipment integration, unknown plant interfaces | High; needs a not-to-exceed ceiling and reporting | Supplier prefers this when scope is unknown. Resolve with a cap and weekly reporting |
| Fixed base plus capped allowance | Most custom assembly projects | Moderate; predictable | Often the fairest. State exactly when the allowance may be used and that unused allowance is not automatic supplier revenue |
| Milestone-based payment | Any structure above | Low if milestones are objective | Supplier worries about cash flow. Resolve with reasonable retention, not punitive terms |
Suppliers have real objections. Customer sites are often less prepared than promised. Third-party equipment and shifting product specs cause delays the supplier cannot control. Strict guarantees push suppliers to add risk premiums. I accept all of that. The balanced position is to fix the price for supplier-controlled scope, cap the allowance for documented uncertainties, and allow extra charges only for approved customer changes or proven customer-caused delay.
Shift the final payment from “shipment” to the Site Acceptance Test. A typical sequence links payments to Factory Acceptance Test completion, delivery, mechanical installation, successful SAT, operator training, and final handover with documentation and backups. For complex lines, request modular sign-offs so sub-systems are validated and paid independently. Watch for deemed-acceptance clauses. Some supplier terms treat services as accepted even when parts are missing if the supplier claims the delay is outside its responsibility. Narrow that clause and require objective evidence.
A cycle-time promise is weak if the supplier can measure it with empty fixtures or manual intervention. For every guarantee, state the product variant, staffing, operating mode, measurement period, and allowable interruptions. Guarantees worth writing in include cycle time, first-pass yield, uptime, scrap rate, changeover time, maximum recovery time after common faults, and successful operation across specified product variants. Some buyers add ramp-up incentives, paying a bonus if target OEE 6 is reached early. That aligns the supplier's urgency with yours.
This is the part I negotiate most carefully on our own machines. Write down the warranty start date and link it to SAT or operational handover, not to shipment. A supplier may ask for a long-stop date to stop indefinite postponement, and that is reasonable. Then write down the after-sales charging rules, the length of free after-sales support, and the warranty period. Add a service level agreement for remote and on-site response times. Specify a spare parts inventory for wear items and critical sensors so a small failure does not wait on a shipment from China. Tie the retained payment to delivery of as-built drawings, PLC and HMI backups, parameter files, and training records. Without those, you depend on the original supplier for every minor change, and that dependence is a hidden recurring cost.
The machine price is visible. Installation and commissioning costs are not. Define scope, cap price, set acceptance criteria, assign responsibilities, and fix after-sales rules before you sign.
Interested in sourcing the products mentioned in this article? See details and request a quote here:
1. ISO provides international standards for machinery safety and installation procedures mentioned in the text. ↩︎
2. Standard industry definition for testing equipment at the supplier’s facility before shipment. ↩︎
3. Authoritative source for industrial control systems which are a key part of the installation scope. ↩︎
4. Official service page for ABB, referenced in the article regarding industrial installation billing practices. ↩︎
5. IPC is the leading authority for electronics manufacturing standards, including terminal crimping requirements. ↩︎
6. Explains the manufacturing metric used to measure equipment productivity and efficiency targets. ↩︎
