We are introducing a new area for our blog. We are asking experienced Industry professionals to write on a subject that they think would be of interest to our followers.

Today, I am introducing Bill Pyles. Bill has 40 plus years in the OEM product support arena.

He worked for Caterpillar, Komatsu and John Deere dealers in various locations across the USA.

He has worked most, if not all, positions in Product Support from technician to Executive.

He still is actively engaged in the business and still thoroughly enjoys being a part of the equipment industry and looks forward to every new day.

Bill has been married for 42 years to his wife, Diana, and has two sons that are currently working in the OEM dealer world, one with a Cat dealer and one with a Deere dealer.  He is also fortunate enough to have five grandchildren.

Bill is also a U.S. Marine Corps veteran. Semper Fi.

I hope you enjoy, as I do, reading Bill’s thinking on a wide range of subjects over the weeks and months ahead. Welcome, Bill.

The Time is Now…

Confessions of a Service Manager

I’ve been working in Product Support most of my life.  Most of those 30 years have been primarily focused on service department product support.  I spent time as a shop mechanic, field mechanic, shop foreman and service manager.  I learned a lot during those years.  I learned:

  • How to move labor and material around on a work order to make the times look good.
  • How to avoid any lost time by charging time to sales, rentals, and used equipment.
  • How to handle warranties by sending a less-than-qualified mechanic because “it’s warranty” and it would be “good” training: and what the hell, the manufacturer is paying for it.
  • That if the boss’s hot button was “reduce training” or “reduce expenses,” you simply moved that time to building maintenance or repair of shop tools.  If expenses were high, you shifted them to cost of sales.
  • The importance of taking care of my customers first by letting the sales department wait and wait and wait.
  • That a two-week backlog was good: hey, three weeks was better.  Keeping this backlog ensured I would make my numbers for the month.  The customer would wait.
  • That you never sent work to another branch or even asked if another shop was slow.
  • That if I had a big job, I never called another store for help to take care of other jobs.  Remember the “backlog.”
  • There was never enough time in the day, so when vendors delivered oxygen and acetylene bottles, bolts, nuts, shop supplies there was no need to check the delivery before signing the delivery ticket.  Nothing ever “falls off the back of the truck.”
  • That sales, rental or used equipment never received any warranty on shop or field repairs.  Remember the “budget.”
  • How to sandbag monthly sales.  If we meet budget this month, hold off any more billing until next month.  I have a budget to make then, too.
  • Never to call a customer for additional work a machine needed, while the machine was down.  He’d yell at me if I suggested additional work needed to be done.  It was always easier to say nothing and if the machine failed after it left the shop, he’d call me.
  • If a machine was coming in for a final drive repair, I’d order ever nut, bolt and gear and air freight them in.  I might need them and if I don’t, the parts department will just put them back on the shelf.  No big deal.

During those times, life was good.  My numbers looked good.  I had a backlog, and the boss was off my back.

Then I became a Manager.

Then I became a General Service Manager and was included in management meetings I never knew existed.  I discovered there were other departments challenged to be efficient and profitable – just like me – and unless all departments worked together, it would not happen.

  • It took a little while, but I began to realize why the sales manager was not always so willing to let me have a loaner for a service job I screwed up.  Those labor hours I was writing off to sales, rental and used were actually showing up on his P&L!
  • Those new, used and rental machines were expensive assets that I kept putting to the back of the schedule so I could take care of my customers.  I didn’t know the company was missing opportunities and thousands of dollars because we had no machines to rent or sell.
  • I learned warranty training was expensive.  Those dollars actually came back in the form of warranty expense.  You mean the manufacturer didn’t pay for 10 hours of labor to replace a fuel filter?
  • I discovered the time I invested swapping labor and material around did nothing for the actual bottom line.  What?  I spent hours doing that!
  • I learned a backlog was good but a satisfied customer was better.  I’d visit customers and ask why he sent a machine to another company.  Usually the answer was “Bill, you guys do good work and I don’t mind even paying a little more for good work, but I can’t wait three or four weeks every time my machine goes into the shop.”
  • So I learned to work the overtime when required.  I learned to ask other shops for help and sometimes I even suggested the customer send the machine to another branch that could get him in and out the quickest.  SOmetimes I even offered to pay the additional hauling to get him there!
  • I learned things do “fall off the back of a truck.”  Have you ever been offered a deal too good to be true?  Hey, it fell off the back of a truck.  I went through an audit after the company decided to change oxygen and acetylene vendors.  The vendor came in and did an audit on all the bottles we rented over the years.  We could not come up with $6,500 worth of rented bottles.  They must be lying all over America’s highways.
  • I learned if I didn’t contact a customer for needed additional work, the machine would leave the shop (“Hey, I did what he asked!”) and would fail soon after – on the job.  The first thing I’d hear would be, “It just left your %#@*&% SHOP!” – and I should have called him and fixed it then.
  • I learned that the boatload of parts I ordered for the final drive repair and returned to parts created a lot of expense.  No one told me there were shipping and emergency charges, and we didn’t stock the part because there was no demand.  I learned those expenses were showing up on the parts manager’s P&L.
  • I found out someone had to take the time to do the parts entry, place the order, receive it into inventory, carry it to the shop, pick it up after I returned it and create another return ticket.  They they’d create a location in the warehouse (remember, we did not stock it), and let it sit until the next authorized parts return when the company might get 50 cents on the dollar!  Wow, no wonder when I asked for help on a disputed service invoice, I’d get a cold stare from the parts manager.

The Old and the New

My point (yes, there is a point to all of this) is there are two types of service management – the old and the new.  The old type will not survive at today’s distributorship.  Managers who think like that are being replaced with managers who are concerned with the entire company’s health, not just the service department.

The new service managers are discovering that working together – sales, parts and service – makes a much more enjoyable job.  Time spent hiding expenses rather than addressing the issue is a complete waste of time.  The real cause of the expense is never removed or identified and swapping time becomes routine and a drain on your time.

Direct and constructive communication with other department managers is key to making our company successful, profitable and raising customer satisfaction.  Believe it or not, it starts with the service department!

You can connect with Bill on LinkedIn at  www.linkedin.com/pub/bill-pyles/12/a24/7ab

Don’t forget to register for the webinars on service department operations this week. One hour each and content filled. Inspections, Work Order Process, Labor Rates and the Service Organization are the topics. Go to www.aednet.org to register. The time is now.

The summer is over and it is time to get down to business again. We will return to submitting blogs on this site regarding parts, service, sales, training, education, and the like on a regular basis. Those of you that follow this blog are more than welcome to make suggestions as to which subjects you would like me to focus on this Fall.

This Fall marks the end of five years since the economic disruptions became so dramatic. Equipment sales levels still linger at roughly half the peak they realized in 2007/2008. We should not expect machine sales activity to return to that level in the United States, excluding resource-based equipment sales until well after business and the general population, get healthy again.

Employment numbers are like grasping at straws. The number of unemployed got lowered to 7.3% for August with the overall unemployment rate being 13.7 if you exclude those that have given up. The labor participation rate has not been this low for over three decades. The lingering overhang of the arrival of the affordable care act is having an effect on hiring. More jobs are becoming part time to avoid the cost to employers of providing healthcare to full-time employees. Healthcare offerings from employers are asking for more contributions from the employee. Wage increases are almost nonexistent. And we should never forget that the American consumer drives the American economy. Without people having disposable income the American economy will continue to struggle.

It is against this background that those of us in the equipment business are working. Parts and service has to become more the focus of these equipment dealers if they are going to succeed in this reduced equipment market. At some point you have to start growing your business, as opposed to saving your way to health. Employee productivity can only be driven so far before it reaches the breaking point, both for your employees and for your customers who don’t receive the level of customer service that they deserve and expect.

The opportunities in front of us are huge. But opportunity is an interesting word much like the word potential. If somebody tells you that you have a lot of potential at the age of 16 that is quite a compliment. If they tell you the same thing at the age of 66 I wonder what you’ve been doing for the last 50 years. Opportunity is what we make of it. So for those of you that are prepared to go get it – these pages are for you.

The time is now

I just watched a wonderful presentation on TED from Robert Gordon on the death of innovation. He concludes this talk with a challenge to us all. He asks Alexander Graham Bell and Thomas Edison to come onto the stage and asks if we are able to match their innovation for our generation. Great question isn’t it?

He posits that the American economy might be settling back into the growth ranges we had prior to the early 19th Century? That growth rate was 0.2% while in the years since 1891 and up until 2007 the GDP grew at an average 2.0%. That is a staggering change.

Unless we can have the same levels of innovation then that is our future.

There four main things we are fighting against.

 

  • Demographics

The key statistic to improving the standard of living is hours of work. Women coming into the workforce in the numbers over the past fifty years have made the difference.

  • Education

The quality of education has eroded in America along with the level of graduation. Canada has a graduation rate 15% higher than the US.

  • Debt

Both personal debt and government debt are out of control. Personal debt appeared to be declining for a short time but has started back up. Government debt is a pretty clear situation                      at all levels national, state and local.

  • Income Inequality

Anticipated wage growth for the bottom 99% is 0.8% which will not be nearly enough to improve the standard of living.

Something has to give. Either we innovate or we are destined for a period of extremely slow growth which will provide inadequate improvements in the standard of living for the coming generations.

The time is now.

 

 

 

One of the elements with significance in the New Reality is Technology. This vast subject I narrow down to cover the following points:-

  •  VoIP
  • CRM
  • Electronic Catalogues
  • Drag and Drop Processes
  • Technician Scheduling Systems
  • Marketing Analytics
  • Signature Pads
  • Online Payment Processes

We will delve deeper in each of these in the coming days.

The time is now.

Let’s review the New Reality. I recently discussed this with a group of executives and highlighted six of the elements that I think are important in the New Reality.

  • Market Coverage
  • Buying Habits
  • Inventory Management
  • Expediting and Logistics
  • Transportation
  • Technology

We will cover these six elements in the weeks ahead.

The time is now.

 

Today is a wonderful day. Welcome to 2013 and I hope that your every desire is accomplished; Health, Happiness and Prosperity to each and every one of you.

 

– Don’t let anyone take away your dreams.

– Always assume the other person is twice as smart as you are and work twice as hard to prove they aren’t.

– Be happy in your work or work and be happy but you can’t escape you have to work.

– You can do more than you thought you could and you can be more than you thought you were

 

All the best – The time is NOW.

I want to talk about tomorrow today. I want to look into the future and try to make some determinations about what management and leadership will be like in 2050 or so. I know that I am setting myself up for some ridicule but there are some truths I want to explore.

This started with the birth of my grandson in 2005. You see boys that were born in 2005 barring a disease or an accident are expected to live until they are 100 years old. That is right 100 years old. Can you imagine that? Now for the record I think that is terrific, however, that means also that there will be a lot of changes coming to accommodate this fact. Let me pose a few questions.

  • What will be the retirement age?
  • How will we support a public pension?
  • How often will this work force be required to go back to school to retool their skills?
  • What will the unemployment rate look like?
  • What will the work day look like?
  • Will we need to have shared jobs?
  • Will we telecommute?
  • What will the cost of living be in 2020, or 2030, or 2040 compared to today?
  • What will the wages need to be to live a happy life?

I know that many of you are much too busy and stressed to be thinking about such things but they really need to have some thought applied don’t they? You have children, or will have soon. You have grandchildren or will have one day. This is not just about those of us in our sunset work years. (I have about fifteen years left) This is about you.

How you manage your jobs and lead people is what makes a difference in their lives and also in yours. How you deal with tomorrow will be the same thing.  The time is now.

Have you noticed how the increase in productivity has caused many of us to have fewer man hours of support per dollar sold? This is a phenomenon of business that has really grown in the past thirty years. The US GDP is seriously dependent on personal spending which has grown as a result of productivity increases providing higher incomes, until, that is 2008 and the financial meltdown. We need to get back there don’t we?

The trouble in the customer service world which most businesses in the capital goods world are seeing is that their markets are fragmenting. The various modes of customer contact used to be mail order, phone order, fax order or walk in order business. To that we now have the internet or self-service business. But this is a very different business model. Many of you are still waiting for this to happen, you are in denial. Don’t wait too long as time is now your enemy not your friend.

Sometimes you can wait comfortably and let others pave the way and you can avoid the costly mistakes of being “first in the dirt.” But time has come.

You all need to provide a portal for your customers to find you on line and be able to “shop” your site for your wares. They need to be able to easily find you, find what they want, price it and even order it. Your competitors are doing it. Are you? The time is now.

Manager is a hyphenated word – Man Ager. I am sorry that is not gender neutral but I am sure you know what I mean. Aging a person is from having to depend on others. Aging is from waiting for others to “get it” especially if you think that you have it. What is terribly wrong with this is that by following old fashioned styles of management the manager is the limit to the capacity of the group. That is right isn’t it? Can you see that and understand that?

Well I don’t like being a limit to anything. There really should never be limits to anything. The limit that might be acceptable is our inability to get it done. We simply are not capable. No schooling, or fitness programs, or special pharmaceuticals will solve the mystery of each of our limitations. Just reconcile yourself to the fact that you have limits and move on. The joy of management is you will be able to find and attract and hire and retain people who don’t have the same limitations that you do and watch them succeed in areas that were not possible for you to succeed. This is a wondrous thing.

Last time I talked about mentoring as a method to develop new talent and new employees. This is something different isn’t it? You have hired talent and they are on the job. Control oriented top down structures are toxic to creativity. Innovation, particularly of the disruptive sort, is unlikely to flourish when a few key executives have the choke hold on resource allocation. (Clayton Christenden). What the employees need today is freedom and responsibility. You need to allow them to fail but not in such a way that they hurt themselves or your group. That is where you the manager come on to the field of play. You are the conductor ensuring that everything works together in harmony. And yes that accelerates the aging process. But just imagine the joy you have watching your children succeed at something. This new reality allows you to experience that joy at work too. The time is now.