Using a Population/Volume Matrix to Determine...Service Manpower Requirements11 May, 2007 By: Jack Duncan imageSource
Using a Population/Volume Matrix to Determine...Service Manpower Requirements
Determining just how many service technicians your
organization needs can feel as if your only reliable recourse is to use a
crystal ball. With too few technicians, your response time and customer
satisfaction suffers; too many on staff that are unnecessary, then the bottom
line suffers. Can there really be an accurate method to determine how many
technicians we actually need?
In a word, yes, however several aspects need to be
Let’s really talk first about the bottom line. This may indeed be the
simplest approach of all. If we have a goal to meet the most commonly accepted
business model, it would require approximately $144K in revenue per technician,
per year. All we have to do is divide our annual service revenue by $144,000 and
we have the number of technicians we can afford. If service has been sold at a
reasonable rate and any service discounts have been “made whole” or reimbursed
from equipment GP, then this would work fairly well. The problem, however, is if
service has not been sold properly (discounted), we will not be able to hire
enough technicians to support our workload. Considering that this approach is
indeed financially responsible, let’s say that we need to consider this in our
overall equation, yet balance it against our actual workload requirements.
Determining Available MSH – or Machine Service Hours
One of our first considerations must be the level of
productivity in available man hours. In other words, we must ensure that we are
getting a day’s work for a day’s pay. If we start with 2,080 hours in a “work
year” then we must begin to remove time that is unavailable to us so that we can
ultimately determine our available man hours per technician per month.
Subtractions would include vacation hours, sick hours, training hours etc. The
remaining number should be somewhere between 140 & 143 hours per technician in a
one month period.
After we have determined the necessary figures to determine
or target MSH hours, we should use our resources to ensure that our technicians
are indeed productive for that amount of time. The target hours of 140 can be
achieved as a combination of travel and customer, or on-site hours. Depending on
the territory or geography covered, you may have something like 100 customer
hours and 40 travel hours, or 80 customer and 60 travel. Any combination of
hours is acceptable as long as the productive hours add up to our target hours
of 140 per month. It should be noted that as the travel time increases, our
actual productive customer hours decrease and our burden rates rise
proportionately. If you determine that you are only achieving 100 productive
hours per technician per month, I suggest solving the problem and not hiring to
your level of inefficiency.
Population / Volume / Workload Analysis
Our ultimate goal should be to determine the number of
Machine Service Hours that we will need to support our population, and divide
that by our available hours per technician of 140, to determine how many service
technicians we’ll need to properly support our population.
Information We Will Need
In order to perform this exercise, we will need to know the
number of machines we have in the field by model and the “days to fail” for that
model machine, and the average service call duration including customer and
travel time. You must ensure that your population numbers do not include
machines that are inactive or serviced by others for the sake of accuracy.
Charge service equipment should be those who have called for service in the last
12 months for faxes and printers, and in the last six months for copiers. Using
the Days to Fail to determine service call frequency is more accurate than using
meter readings because of accuracy. All we have to do is divide 30.5 by the days
to fail to get our service call frequency. Once we have determined the call
frequency, we must multiply that by the population of that model, and then by
the Average Call Duration for both Customer and Travel time. If you wish, you
can also factor in Reschedule or Incomplete calls as in the example chart.
Balancing this information against our initial number
resulting from our revenue figures should give you a very good idea of how many
hours you need available to you on a monthly basis to properly service your
population as well as maintain desired profit margins.