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Loosing Focus Part 1: Are You Running Service Or Is Service Running You?

15 May, 2002 By: Wes McArtor imageSource

Loosing Focus Part 1: Are You Running Service Or Is Service Running You?

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 used by dealers and how they offer their
insight to many of their customers. I readily admit that most of what is
discussed here is not necessarily new information, nor are the solutions mine
alone. However, 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.


number one:
Incomplete or Hold
for part calls

is a common misconception that calls cannot be completed because the technician
does not have the correct parts; this is the result of improper inventory. I
challenge this assumption. Your parts manager can use the following table to
keep a log of every uncompleted call due to the lack of parts.


Car Stock But Out
Main Ware House
Main But Out
In Warehouse


your results are like most dealers, you will find that eight percent or more of
your calls will fall in the first of the four categories. The first category is
the 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 is an
acceptable rate of no part calls, but in my experience there is no “one size
fits all,” number. This is due to the variety of factors, which ultimately
determine how efficient parts turns can be, I.E.: Population mix, geography,
excessive part usage by techs, vendor supply reliability, part reliability,
parts manager expertise.  No one
dealer experiences the same exact circumstances involving these variables, but
everyone deals with the problem.  Among
the dealers subscribing to BEI’s program, the range of “no parts calls” is
from a low of eight percent to a high of 64 percent.


eight percent 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 eight percent, 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 no part call 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.


to the fact, that 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 will be
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. Each local
tech is required to stop by the office every day to retrieve the parts used the
day before. The techs, who’s areas lie more than 30 minutes from the office,
will have the parts shipped by courier or UPS to be delivered the next day. 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 will carry multiple
quantities of. However, usage dictates these amounts not the techs.


are pack rats by nature. Their motto is, “better to have it and not need it,
then 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 moment, start by pulling all unused items from the techs
inventory from 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 no part calls to less than 20 percent, you can begin
to shorten the obsolete inventory measure to 60 days, then 45. Then, we begin
the same process for the main warehouse; here though, it is a little trickier.
The parts manager must be able to not only look to usage as a gauge, but must
also look at machine population. For instance, if you had a large major account
base that, consists of one or two models, your necessary inventory of parts will
change dramatically; once the lease is up the machines are replaced. Knowing and
communicating with the parts manager, as to the status of these type accounts,
allows him/her to begin to deplete the stock of parts for the machines prior to
the end of the lease. By doing this, 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 for a product as it ages in the field and your population begins to
decline. Usage trends will tend to drop as the product population drops by
default. However, it is equally important to use the few items you have
remaining in the few machines you have left, rather than find yourself writing
them off, because there are not machines available to use them in.


closing, be sure to pick and train your parts manager, with the same degree of
scrutiny, as you would any other manager. 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 kept 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.

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