Improving Service Department Performance3 Nov, 2011 By: Stacey Newman imageSource
Improving Service Department Performance
As a Customer Care Specialist with a leading Service organization (BEI Services), a lot of time is spent working with office equipment dealerships to improve overall service department performance. The implementation of an effective territory and car stock management plan will help drive service department productivity and control costs. As simple as this process may seem, it is often one of the most difficult challenges that a service department can face.
Here are some frequently asked questions received from dealerships throughout the industry:
Q: What is the value of territory management?
Territory management is vital to the success of any service operation. Creating and maintaining territories establishes a sense of order, which translates into cost control. The first benefit of creating territories is the reduction in mileage expenses and other associated costs. The goal should be to maximize technician productivity by reducing driving time to and from customer locations. Reduction in travel time, in turn, reduces customer response time and increases the number of service calls that can be completed on a daily basis.
Secondly, territories establish accountability. Making technicians accountable for equipment performance after a service call will improve the quality of service rendered. Without established territories, if technician A were to perform a poor service call resulting in a customer generated Call Back (CB), it may not be technician A that has to return to the customer location to resolve the issue. If there are ongoing problems with the device, and it has been serviced by multiple technicians, it makes it difficult to identify and resolve the root cause of the problem. Finally, productivity will increase as a result of technicians becoming familiar with the devices that they service. As a direct advantage to this effort, less time will be spent having to troubleshoot unknown devices.
Q: What are the initial steps that should be taken when creating territories?
Establishing territories, as simple as it may seem, is an evolving process. As territory management technology gains a foothold in the industry, companies are transitioning from the traditional “zip code”- based territories to performance-based territories. Performance-based territories take into account more than just geographical distance. The focus of performance-based territories is on the individual technician performance characteristics on the models that are included in their territory. Key performance statistics to focus on include: First Call Effectiveness (FCE) percentage and Mean Copies Between Visits (MCBV). FCE is the ability for the technician to fix the device the first time without incurring a Call Back (CB) or a
Hold for Parts (HP) call. MCBV is the average copies produced by a device between service calls.
When getting started creating territories, it is important to begin with a well thought out plan. Start by assessing technician’s strengths. This can be done at the manufacturer, segment or model level. By identifying technician’s strengths on individual models, and then placing those technicians into a heavy concentration of those models, you are able to drastically reduce service calls in those territories. For example, if there is a technician that excels working on high volume devices, this would be an ideal opportunity to create a “specialized” territory for this technician consisting of predominantly high volume devices.
On the contrary, if there is a new technician not trained on high volume devices, you can create a territory that mainly consists of low volume black and white devices. The idea is to start by identifying where technicians are the most capable based on historical performance data (FCE, MCBV), and tailor the territory around those strengths. Taking this approach allows you to create truly performance-based territories and increases technician productivity in
Q: How is the appropriate workload requirement established for territories?
It is imperative when creating territories to include enough equipment to meet the workload requirement per technician. Each technician is different and has varying performance characteristics; therefore the monthly workload for each technician assigned to a territory will fluctuate. Taking into account “demand time” is a way to effectively distribute workload per technician. Demand time is the amount of “screwdriver” time that a machine requires on a monthly basis. To determine the demand time per serial number, take into account the Average Monthly Volume (AMV) of the device. Once you know the AMV, look at the Copies Per Maintenance Hour (CPMH) per technician. CPMH is a technical benchmark that reflects the number of copies produced for each hour of maintenance time expended by the technician. Hourly demand time is then calculated by dividing the technician’s achieved CPMH into the AMV. When creating territories the recommended goal for monthly demand time (including travel time) is 143 hours, which translates to 100% estimated workload.
Q: Once territories are created and assigned to technicians, what is the best way to manage car stock requirements?
The goal when setting up a technician’s car stock is to reduce the number of service calls that result in a Hold for Parts (HP). Looking at the data, 34.6% of service calls use parts and the average return rate for not having the right part is 21.7%. The average cost to return to incomplete calls is $116.00 per call! The BEI Services standard for overall HP percentage is 8-12%. This goal is completely attainable, and the top 15% of dealers using BEI Services maintain a HP percentage of 12% or less. To achieve this you need timely restocking, accurate parts usage data and absolute control over your inventory.
It should be noted that car stock and territory management are inextricably linked. When setting up car stocks, create them based on territory requirements as opposed to technician requirements. This means when looking at parts to include, make decisions based on historic equipment usage data for the devices that are assigned to the territory. It is recommended that if the Average Monthly Usage (AMU) for the part is .33 or above within the territory stock at least one part. As a secondary check, take into account the total company part usage based on a six month period. Even though the territory AMU may be under .33 for a particular part, the company usage may be high, and the technician will most likely end up needing the part in question. In these instances it is recommended to stock half of the total parts used in the last six months. Remember, setting up car stock inventory needs to be a reasonable management decision. Not carrying enough parts will lead to a spike in incomplete calls and carrying too many parts is expensive and not always the best approach. Once car stocks are set up, they should be maintained and updated monthly for best results.
Q: How often should territories be updated?
In order to maintain integrity, territories should be updated monthly. Not maintaining territories on a regular basis is the primary reason why territory management becomes such a challenge for dealerships. New devices being added or removed from the active equipment population on a monthly basis need to be taken into account. Dealerships should also be focused on items such as fluctuation in demand time. Over time a technician’s performance within a territory should improve. As performance improves, equipment demand time will decrease; therefore more workload needs to be added to the territory for those technicians. Also consider the percentage of time technicians are performing service calls on devices assigned within their territory. Anything below 85% of the time indicates a potential issue and should be addressed. A small monthly time commitment to maintaining territory integrity will save your dealership time and money in the long run.
The creation and maintenance of performance based territories will increase service department productivity. Technicians will incur fewer call backs and hold for parts calls by servicing devices they are familiar with and carrying the proper parts for those devices. In the creation of performance-based territories it is also okay to allow for a larger geographic service area. The benefits of specialization justify the potential increase in travel time. With regard to car stock inventory, remember the return rate for an incomplete service call on average is $116.00. Create car stock based on equipment usage within a territory, and be sure to update inventory requirements monthly. Implementing an effective territory and car stock management plan is the first place dealerships should focus when attempting to remedy service department inefficiencies, regain lost profits and increase customer satisfaction.