BEI Services: Improving Service Department Performance & Profitability

Introduces REACH Leadership Development Academy

bei-logoMany dealerships are exploring managed network services and other avenues to reach deeper into their customer base. Many of these projects require significant investments as dealers ramp them up, putting a drain on net profits. Equipment sales can go up and down, which leaves supplies and service as the “biggest horse pulling the wagon,” as Jack Duncan, Director of REACH at BEI Services, puts it. BEI sells equipment and service performance benchmarking software.

Jack Duncan

Jack Duncan

“This drain on profits makes it critical that we extract as much productivity and proficiency as possible from our service departments,” said Duncan. “It is imperative that we have a system to judge who our best technicians are as well as which can be coached into greatness. Team members who manage field technicians must become mentors and coaches to help their teams improve both productivity as well as their proficiency. Things such as first-call effectiveness, gross and net calls per day, and hold-for-parts percentages become even more critical elements in building a successful service organization.”

Far too often the “best tech” gets promoted with little or no regard as to whether or not he or she can succeed in that role, let alone have any management training that may be needed. Just as the best salesman may not be the best sales manager, the same holds true for technicians. Managing mobile employees is a unique situation due to the fact that when they are doing what you pay them to do, you cannot see what they are doing.

“Because of their technical skills, these newly promoted (and oftentimes not just newly promoted) individuals’ comfort zone when things get busy is their toolkit,” said Duncan. “Therefore, they begin simply shuffling calls among techs and taking the calls that no one else can fix. This is directly opposed to what we really need them to do, which is grow and improve the performance of their team members.” The fact that these promoted technicians might now manage people who had been their peers as technicians could also create some uncomfortable situations, he added.
The toolkit of effective field supervisors or field service managers should be their teams of technicians. Their job should be to share the talents and training that made them successful with their team members. To be successful in that job, Duncan believes that field supervisors and field service managers must have a system of measurement that can be supported and can accurately measure strengths and opportunities for their team members. Trending should be used to identify areas of improvement and progress being made. Expectations should be set and held accountable for, as well as goals for improvement. Goals should be attainable and negotiated with the tech to gain agreement. Ride days and field audits are critical, as are monthly coaching sessions where they need to both give and receive feedback. When performance is below expectations, an action plan should be developed and consequences made known to the employee in writing to insure HR compliance.

Monitoring start and end times for each technician or accountable time is important in determining manpower required to meet response times and other expectations. “It is accepted that we need 85% of a technician’s time spent traveling to or at a customer’s office working on equipment,” said Duncan. “When that time decreases, it may be necessary to see why. It may simply be the geography of their territory causing longer-than-normal return home trips or improper time recording, but it must be investigated.”

Building optimized territories is another factor that can lower travel time, but considerations should also be given for where the technician will start and end their day from. You must also take into consideration the technician’s ability to properly service and maintain the models assigned to them. “If your data shows they are struggling with a particular model machine, why should you assign them to that technician until you help them improve their performance on them?” said Duncan. “Using a technician’s current statistics for mean time and copies between calls is important in establishing the demand time needed to run that territory. The hours required can change drastically based on these factors either up or down. While one technician may be at 120% of demand time, another may only be at 80%. Specializing technicians on fewer models or types of equipment can be helpful as they will have more experience on the machines they service. Additional benefits can be achieved by having more accurate car stocks.”

Your inventory and logistics department is also joined at the hip to the success of your service department. “While hold-for-parts percentages are generally accepted at 10% to 12%, as the number increases beyond that you are in a position to have to hire to your inefficiencies, leading to overstaffing,” said Duncan. “As you might expect, this leads to a degradation in profits. A regular pattern of restocking techs and reordering from vendors is necessary to insure inventory is turning and not stacking money on the shelves. You must also be aware of declining usage items and adjust your purchasing quickly to avoid obsolescence and ultimately throwing net profits away when you have to write the items off as dead stock.”

Using BEI’s Tech Assessment Program, Duncan said that Oklahoma-based managed services provider Standley Systems achieved the following results when measuring first quarter service statistics with the second quarter of 2016:

  • First-call effectiveness improved by 7%
  • Callbacks decreased by 5%
  • Hold-for-parts calls decreased by 2%
  • Emergency calls decreased over 11%
  • Parts COGS decreased dramatically

 

Just as important as the statistics above is the fact that this performance increase was achieved with a significant reduction in the number of technicians due to attrition and other factors.

“When BEI launched the Tech Assessment piece to their software, I was extremely skeptical and on many occasions I was the loudest critic,” said Josh Ravan, VP of Service at Standley Systems.

“However, after being forced to use Tech Assessment for a couple of quarters, I found myself now defending BEI and the Tech Assessment piece. It made the once abstract and overwhelming information into an easy to see visual using graphs, and I am now able to identify, address, and track the progress of every tech in the state in minutes. The techs no longer argue about what the numbers mean, but now they find themselves with clear goals that they are able to use to improve themselves into great techs!”

Duncan said that BEI has established the REACH (Respect, Expectations, Accountability, Coaching and Humility) Leadership Development Academy to address these issues while not being just another exercise in benchmarking. Courses offered include REACH Level One – Managing Mobile Employees and Level Two for those with departmental responsibilities. Inventory & Logistics has been designed to teach the skills needed to increase inventory efficiency while minimizing losses due to obsolescence.

About REACH Leadership Development Academy

REACH is an acronym that stands for Respect, Expectations, Accountability, Coaching and Humility. These principals paired with BEI’s exclusive management solutions comprise the next level of leadership training. Three different REACH Academies geared towards different job responsibilities will help your leaders develop the people skill set necessary to implement the specific tools they will be taught to use during these on site instructor led sessions. For more info email: REACH@beiservices.com or visit www.beiservices.com/REACH.

About BEI Services

BEI Services stands alone as the imaging industry’s trusted provider of equipment and service performance standards. BEI offers a complete array of performance analytics and software solutions designed enhance every aspect of a dealerships performance and profitability. A no cost service performance analysis is available. For more info, visit www.beiservices.com or call 307.587.8446.

About the Author
ENX Editorial Staff