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Enhancing Service Operations: From Benchmarks to Proactive Dispatch

3 Mar, 2011 By: Jack Duncan. U.S. Fleet Tracking imageSource

Enhancing Service Operations: From Benchmarks to Proactive Dispatch

To remain competitive in service you need to learn how to
improve productivity and lessen costs. It takes the willingness of owners,
managers, technicians, etc., while learning the latest benchmarks, newer
methods, the uses of today’s technology, while retaining some key basics that
simply work well.

Let’s start with an old basic that doesn’t work. All too
often we see a technician’s average daily productive hours below the benchmark
of 7.2 – 7.5 hours per day of combined customer and travel time. When
productivity drops, dealers are forced to overstaff to make up for
inefficiencies and this overstaffing immediately makes profits suffer. It is
critical that we monitor first call dispatch time and last call completion times
to insure that we are getting that day’s work which we must have from each
technician in order to make our profit goals. The single highest cost we have in
service is labor, followed by parts used on service calls. When productive hours
are low, it is followed by a decreased number of service calls per day. Some of
the factors that must be closely monitored on a weekly, monthly and quarterly
basis are average customer and travel time per day, average incompletes (hold
for parts) and recall percentage, average miles driven per service call &
average cost of parts per call. These factors contribute to service

Proactive Service Dispatch:
To remain competitive, dispatchers should make the
transition to Resource Coordinator, which is befitting. We have talked about
territories for many years and the benefits of using territory assignments and
it still holds true today, however the territory may be more of a moving target
than ever before. Technicians are often out for training, vacations, etc., while
others may be overloaded with calls due to cutbacks in staffing in a tough
economy. Dispatchers need to be able to leverage available technology that will
enable them to visualize the location of the technicians as well as the location
of service calls. Call loads should be monitored & balanced as needed and
service calls assigned to the closest available technician to avoid unnecessary
travel time & mileage expense. The goal should be to push as much of the tech’s
available time from travel to repair time which will also lower burden rates.

First Call Effectiveness:
This method has been out for many years – it’s called the
“Total Call Concept.” When the technician is on site he or she should make all
necessary repairs and perform any needed (or soon to be needed) preventive
maintenance. The goal is to put as many days and copies/prints between the
service call they are completing and the next service call. Fixing it right the
first time has never been more important. Technicians must be properly trained
to service the equipment they are working on and have the necessary parts for
both repair and maintenance. Critical elements for first call effectiveness are
the percentages of recalls and hold for parts. A recall is the need for a return
service call to make repairs which should already have been completed. While we
will always have recalls, the percentage of recalls should be 10% or less. Hold
for parts calls are also a fact of life in our business, but that should also be
10% as a goal. When either of these goals are not met, profits suffer. Recalls
may be a result of improper tech training, or result from too high an
expectation on calls per day. Do not sacrifice quality to get quantity. Poor car
stock inventories will result in an excessive amount of hold for parts calls,
emergency orders which can raise the net cost of a $10 part to over $100.00 as
well as increasing staffing requirements to address the additional service calls
required to return to where you have already been to complete repairs and

Holding Margins in a Tough Economy:
The first thing you have to know is what your true
operating cost per page is on all the models that you service, both for service
and supply. You also need to know how your costs stack up with the rest of the
industry. If your cost is higher than the rest of the industry and you try to
sell it at a 52% margin, you probably won’t make many sales. Achieving the
lowest possible operating cost per copy is the first critical element to your
success. Finding and resolving any models with excessively high cost must be an
ongoing battle in your service department. Once you know what your costs are and
that they are in line with the industry, you must have a method for establishing
maintenance pricing to achieve your overall goal of 52% profit in service. In
order to sell some of your service contracts at, say a 45% margin, then you must
also sell some at a higher than 52% margin to achieve your goal, otherwise the
math just will not work! Sometimes we must compete with a manufacturer who can
take a lower margin or a competitor who does not know his true cost and uses the
SWAG method for service pricing. To deep dive into service operations, attend
the ITEX service workshop in DC!

Jack Duncan, a service executive for U.S. Fleet
Tracking, is experienced in service operations & training that include for OEMs,
vendors and dealerships in the USA.  He is an ITEX 2011 presenter.

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