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I’ve been very fortunate to
have had the opportunity to work with many outstanding
office equipment dealers in my career. In my current
capacity I’ve taken advantage of the many quality
practices these dealers use and offer their insight to
many of our customers. I readily admit that most of what’s
discussed here is not necessarily new information nor are
the solutions mine alone, but I’ve seen the same common
problems in varying degrees in almost every dealer I’ve
consulted with. With this in mind I would like to
highlight these common areas of concern and offer
suggestions on how to solve the often complex nature of
running service.
Problem number one: Incomplete or Hold For Part Calls
Current studies have shown that parts are required on over 33% of service calls. The challenge of the statistic is to ensure the technicians are properly stocked to be able to complete the call on their first trip, and not have to return because they are not carrying the parts needed for the repair. In the same study mentioned above we found the average return for parts is 21.7% nationally. It is a common misconception that the reason for the return for parts is the result of improper inventory, and I challenge this assumption. Using the following table, have your parts person keep a log of every call that is not completed due to the lack of parts. If your results are like most dealers you will find that 80% or more of your calls will fall in the first of the four categories. This is the category of parts that the tech normally has in his car stock but is out of on this particular call. There are an endless number of opinions as to what an acceptable rate of return for parts calls is, but in my experience there is no “one size fits all” number. This is due to the variety of factors that ultimately determine how efficient parts turns can be. Population mix, geography, excessive parts usage by techs, vendor supply reliability, part reliability, and parts manager expertise are all factors. No one dealer has the same exact instance of all of these variables but everyone deals with the problem. Among the dealers subscribing to BEI’s program, the range of return for parts calls is from a low of 8% to a high of 64%. The top 15% of BEI dealers maintain a return for parts of less than 12%, and that is the goal we recommend. The 8% dealer represents the epitome of inventory control. It must be said though, even if you did EXACTLY as this dealer has done you may not be able to achieve 8%, or you might even do better! The root of this low percentage is based on optimizing the time it takes to restock each tech. Driving a lower Hold For Parts return rate is predicated on two primary numbers; how often the tech uses the part and how long it takes to replace the one that is used. The better you manage the latter of these two, the lower the inventory value the tech has to carry and the lower the no part call rate. Once you know how to manage the restock time, the easier it is to manage the quantity the tech must carry. Another key to making this an easier process is to have specialized teams where possible. Dealers in the 8 techs and smaller range might find this difficult unless they’ve done a good job of keeping sales to a tight geographical area. Larger companies should have territories that are specialized so that techs are working on a small mix of models thus optimizing the car stock needed. Because the best performing dealer has the largest percentage of machine base populated in a small geographic area, techs do not have to travel far to get the needed parts. Each day at 4:00pm the parts manager begins the process of pulling every part the techs used that day so that they are available the next. Each part is checked for historical usage amounts so the tech is only restocked those items that are used on a regular basis. These parts are then staged, delivered or couriered to the tech residence the next day, or scheduled to be delivered to the tech in the field. With this being done the amount of inventory carried by the tech is kept at a minimum. There are still going to be items that a tech carries multiple quantities of, but usage dictates these amounts, not the techs. Techs are pack rats by nature. Their motto is, “Better to have it and not need it, than need it and not have it.” With this in mind, it is very important to constantly be adjusting their inventories to match their usage. If you are not doing this at this time, start by pulling from the tech’s inventory all items not used in the last 90 days. They will typically fight this, so it might be necessary to have a manager available to ensure there is complete compliance. Once you’ve managed your Return For Part calls to less than 20%, you can begin to shorten the obsolete inventory measure to 60 days then 45 days. Then we begin the same process for the main warehouse, although it is a little trickier. The parts manger must be able to not only look to usage as a gauge but must also look at machine population. For example, if you had a large major account base that consisted of one or two models, your necessary inventory of parts will change dramatically once the lease is up and the machines are replaced. Knowing and communicating with the parts manager as to the status of these type of accounts allows him/her to begin to deplete the stock of parts for the machines prior to the end of the lease, so you are not stuck with a large inventory of parts for machines that you have only a small number of left in the field. This is also true as a product ages in the field and your population begins to decline. Usage trends will tend to drop as the product population drops by default. It is equally important to use the few items you have remaining in the few machines you have left rather than finding yourself with a bunch of obsolete parts and having to write them off because there are no machines available to use them in. In closing, be sure to pick and train your parts manager with the same degree of scrutiny as you would any other manager. This job controls your company’s second largest expense and has serious effects on your largest expense - labor. The quality of this individual will be very evident by the size of your inventory and the number of calls tech cannot complete because of parts. Both of these are a direct cost to you above and beyond the cost of the manager. By the same token, the right individual can save you thousands in inventory dollars and keep your technical manpower requirements to minimum. Not everyone can be a good parts manager so if they are not working out, don’t be afraid to change until you find someone who can do the job. u Mr. McArtor is the president of BEI Services, Inc. that now tracks every service call that occurs on over 3.5 million imaging devices, around the world. BEI created the industries first page base technician incentive plan that has near 9300 technicians utilizing it. BEI also created the first page base sales compensation model, that will allow dealers to transition smoothly into the world of managed print. Mr. McArtor started in the copier industry as a service technician for Savin Corp. in 1981 after serving the country in the U.S. Marine Corp. Since then he has held various positions in copier and computer industry including National Service Marketing Manager for Minolta Corp. After leaving Minolta in 1993, he and his partner co-founded B.E.I.Services Inc. to provide independent imaging dealers with an unbiased source for standards and nationwide comparative service reporting. Mr. McArtor is one of the foremost speakers on service department performance, benchmarking and incentive programs in the nation. |
