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Sameness, Differentiation and Distinction

Sameness, Differentiation, and Distinction

Sameness Differentiation and Distinction

Scott McKain’s recent book “Create Distinction” got and has kept my attention. He puts forward an interesting question. “What do you do when great isn’t good enough to grow your business?

As time has passed and markets matured, supply chains have become full of people doing much the same thing. There is a “Sameness” about all of them. This caused a lot of smart people and consultants to bring forward a fresh and new offering “Differentiation” to the market. You don’t want to be the same as everyone else, do you? You are different, you are better, you deliver same day service, you have the part in stock and you offer technical advice. To some degree these differentiators have become the same as well. Everything has become a “commodity.” Oh, I can get that anywhere.

So how do YOU become the “go to source” for your products or services?

McKain suggests you need to have “Distinction.”

At Learning Without Scars you have been reading articles over the past several months from special individuals who share their expertise and thinking on many subjects. From retired executives, to educators and consultants, and thought leaders in their fields. We are trying to create a “Place” that provides and produces thought provoking and thoughtful articles. This is but one of the steps that we have taken in our quest to become your “go to source” on all operational aspects of the parts, service, product support selling and parts and service marketing in the Capital Goods Industries of Construction, Agriculture, Material Handling, On Highway Transportation, Engine and Light Industrial Equipment to name a few.

In our quest for distinction we have also created comprehensive and objective job function assessments for most of the operational jobs in the operational aspect of the distribution channels we serve. These assessments have gained significant traction, even during the difficult year we are experiencing. They are used to improve success in hiring by having prospective employees take the assessment during the interviewing process. They are becoming more common in the annual performance reviews that are becoming a staple in best practice dealerships. They are becoming a significant part of employee development by understanding and addressing the skills gaps that exist with each individual employee. The assessments, eighteen of them, are available in English, Spanish and French.

What we believe is another source of distinction for us are our “Learning Paths.” After more than thirty years in front of classrooms and on webinars with tens of thousands of students we have developed specific classes to address four basic “Skill Levels” for each job function; Basic, Intermediate, Advanced and Expert. At each level, within each job function we have identified specific classes that represent the subjects required to improve their individual employee skills. This is unique to Learning Without Scars in the Industry.

We are currently updating each of our ninety-four English classes to address the recent research that shows learning and retention provided by the traditional model of a fifty-minute class can be improved dramatically, by fifty percent, if the class is broken down into ten to twelve-minute increments, broken up with mini surveys and questions. As you can imagine with our pre-test, interactive video presentation of our classes with slides, audio tracks and film clips, this is a rather large undertaking. But we feel it is important enough to continue to keep us at the forefront of the training and learning offerings in our Industry.

Finally, we continue to seek accreditation from IACET, the International Association of Continuing Education and Training. This will allow our products to earn Continuous Education Units (CEU’s) which combined will earn credits at many Universities, Colleges, Junior Colleges, Vocational and Technical Schools worldwide.

With the knowledge we have gained over the past ten months about this virus, the testing, the therapeutics, and now the vaccines we believe that the end of this pandemic and its impact on our lives will soon be behind us. We want to be ready when everything starts to open up and your business returns to “normal.” I have always been a glass half full person and I don’t see any need for me to change from my optimistic viewpoint.

Thanks for taking the time to read this, our progress report.

The time is now.

For more information on creating distinction with us, visit us at Learning Without Scars.
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Dealer Websites

Dealer Websites

This week, we have a new guest blog from Mets Kramer.

Dealer Websites

In my last article, I discussed the difference between Billboard Digital Marketing and Engagement Digital Marketing. With the world and our industry becoming more digital everyday, I wanted to expand on the topic of websites and why it’s worth building your own site to engage your customers.

Websites are the easiest way to present your dealership and explain to visitors who you are, what you do and what sets you apart from the industry. Additionally, a custom domain, with emails to match, is a simple way to gain better control over your brand and manage your team. (i.e. Company name: Strategic Evolutions, email: mets.kramer@strategicevolutions.ca).

However, for equipment dealers, it is a little harder to present your company, your team, services and products. This is because our products, or inventory, are always changing. Our products tend to be serialized construction equipment, so listing your inventory requires a more complex website and should include an easy, quick way to update your information.

While this is a challenge, it is possible! It will give you better control over your digital presence and, also, help you build your brand, developing stronger relationships with your customers.

Here are 4 reasons why you should build your own website:

  1. Present your dealership and team the way you want. Focus on the strengths and values that you feel are important. Add content that brings value to your clients, expand on the services you offer and present your inventory in the style you feel has the greatest impact. Just like you design your dealership lobby to focus on your customer’s experience, a website is a digital representation of your company’s “face” and its physical building.

When creating your website from scratch, focus on engaging the customer, drawing them in.  Then, present your value proposition or promotions.  Consider metrics like bounce rate, time on site and pages viewed as a measure of engagement.

 

  1. Add a blog, picture gallery and of course, VIDEOS. These features are great to post on social media using Twitter, Instagram, Facebook or LinkedIn. Each social media post links visitors back to your website. Increasing the links and traffic to your site helps you rise to the top of internet searches when people are looking for equipment or services. Additionally, this type of content improves your content score, also improving your search position.

To understand this better, assess your own online experience.  Do you use TikTok, Instagram, Twitter or Facebook?  What do you prefer to view?  Research shows visitors engage more often and longer with video content more than pictures.

 

  1. Present your inventory without directing customers to an external advertising site. Capturing customers and their engagement is the name of the game. Once you have people looking at your equipment, hold them there and answer their questions. Throughout this year, digital presence and selling has become that much more important. Current research suggests customers are doing 90% of their research PRIOR to contacting any dealers about a machine. Make sure your inventory is presented well and contains all the information your customers would initially ask for. You want to provide everything they need so picking up the phone is easy!

When you build your own site, present your inventory with video, images, detailed descriptions, links to specs and any support documentation you have to prove to visitors “This is the machine you want!”.

Building your own site prevents them from ending up on an advertising platform where other options are presented to them.  FOMO (Fear of Missing Out) is a REAL thing! It has been shown to motivate people out of fear to keep clicking, if they weren’t satisfied by what they found.

  1. Analytics Systems. Take advantage of the market’s best analytics from either the website platform, Google or others. Understand who’s visiting your site, where they came from, what they saw, and how long they stayed. Understand how to improve your Bounce Rate (Users that leave without clicking anything on the site) and Conversion Rate (Users that act by clicking a contact button). Understanding this aspect of Digital Marketing helps you change and update your site to improve your visitor engagement.

A website visitor is the equivalent to a person visiting your dealership.   During an in-person visit, it’s communication and addressing their needs that closes the sale, so use the same approach for your website. Engage!

For more information on our training programs, please visit us at Learning Without Scars.

For more information about Mets Kramer, please visit his website at Strategic Evolutions.

 

 

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Help! I’m in CRM Hell!

Help! I’m in CRM Hell!

Help! I'm in CRM Hell!

Don Buttrey is the president of Sales Professional Training Inc., a company that offers in-depth skill development for sales professionals and sales support. He has trained thousands of salespeople over 25 years and clearly understands the selling environment of equipment dealers and manufacturers. His curriculum is comprehensive and proven! Don is also the author of “The SELL Process”, a foundational how-to book on effective sales interactions. He is beginning a series on Customer Relationship Management with “Help, I’m in CRM Hell!”

Don can be reached at (937) 427-1717 or email donbuttrey@salesprofessionaltraining.com. 

Check out this website link salesprofessionaltraining.com  for more information – or to purchase online sales training.

Help! I’m in CRM Hell!

For the next few weeks, we will discuss Customer Relationship Management. This has become a real hot button particularly with the current pandemic and economic conditions.

What does it mean to be trapped in CRM Hell?

I come front and center with CRM (Customer Relationship Management) issues with every construction equipment dealer I train. I personally have not researched or compiled any conclusive data as to which products are most used or which are best suited for construction equipment dealers. I have observed however, that every dealer has their own unique goals, budget, size/scope and ‘people culture’ to consider. The product options are there, and it takes research and careful consideration to select a product or CRM service that is the right fit.

The dealers that address the core issues first (noted in this blog) – and that involve all levels and departments in the CRM vendor selection process seem to be the most successful.  Conversely, those that invest in a CRM system without a broad involvement and buy-in, and then demand conformance to its use, have the lowest adoption rate and effectiveness – from my observations.

For more information about our training programs, please visit us at Learning Without Scars.
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Embarrassed Not to Have Parts

Embarrassed not to have Parts (ENTH)

Goals and Targets

Clearly these are the parts you are embarrassed not to have when your customer comes calling.  They include: filters, fluids, hardware, o-rings, GET for machines you sold, hoses (a subject of its own), keys, and any part for a machine you sold that your customer can get today at Walmart, NAPA or the local farm store.  If you don’t have a part that he can get TODAY from somebody local, you have probably lost that customer for that part forever.  Think automobile dealers.

Virtually every machine we sell has lots of hydraulics and thus lots of hoses.  You can’t stock all the hoses for a machine.  They age poorly and have very erratic sales.  Most manufacturers make hoses non-returnable.  When a customer blows a hose, it is the kind of repair he can do quickly.  He is not going to wait three days for a hose.  I like hose shops in my branches.  It requires lots of management focus to pull off effectively since you will be competing with people who do this type of thing exclusively.  It is worth it if you can devote the time.  Throw away your turn criteria here for fittings.  Your perceived availability will go way up in the customers’ mind.  This is very hard to pull off without lots of top management focus.

I include new product introduction parts in the ENTH category.  Make sure that your branches, central inventory control and equipment sales are communicating.  You don’t want to have somebody who just purchased a machine from you to come in and you don’t have his GET or filter.

Almost all ENTH parts have very good turns so don’t be afraid to have a little safety stock here.  Run reports on these parts to make sure you are hitting your target.  I think anything less than 99.9% availability is unacceptable here.

Your customer doesn’t really expect you to be stocking an engine or sheet metal and certainly not at the branch level.  He fully expects you to have ENTH parts.  He will be mad and disappointed if you fail in this area.  He won’t forget.  He will tell his friends.  Your Inventory group should spend lots of time getting this right.

For more information on how we can help you excel at Inventory Management, please visit us at Learning Without Scars.
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The Return on Investment

The Return on Investment

This week brings our fourth blog post from Don Shilling.

Don Shilling

As we continue the discussion on “Growing Your Own” employees probably one of the most asked questions I get is if our company invests in a tuition reimbursement program for a sponsored future employee or in an Apprenticeship or Mentorship Program what is my return on investment (ROI)?

Business logic tells us that there is a defined cost in everything we do and the better we are at recovering those costs the better the chances are we can show a profit in what we do. Everyone’s formula for this calculation might be different so I would like to answer this a little more generically

ROI In this situation is hard to measure because every situation is different. But I usually answer the question with a question. What does turnover cost you? For every position that is measurable. When you lose an experienced employee, the costs associated with that ranges today from 1/2 of that position annual salary or more. Today filling a skilled position can take 3 months or more. Then after recruitment costs, placement fees and On Boarding and Training expense it can really cost you much more than that 1/2 years annual salary projection.

For our companies skilled positions we fill with either an apprenticeship or tuition reimbursed positions we see direct costs of the entry level salary, the cost of the pay back on the tuition reimbursement or the apprenticeship mentoring. These costs are significant there is no doubt, so typically we amortized these costs over a 3 to 5-year period.

Because these positions start as “entry level” we see an initial lower salary cost but it is important to continue wage reviews and increases with these individuals as their skill levels increase. Typically, by the end of the three to five year pay back on the tuition or apprenticeship periods this employee is at a salary level equal to market value for their skill level. This is important, keeping this employee is critical, also showing this employee he has value by doing wage reviews as they progression of their education adds to that since of pride or accomplishment for each individual.

On revenue side we of course cannot charge customers full charge rates on apprentice or school to work employees but we can recover some of their costs. Typically, that is 10 to 20% initially and steadily increasing as the employee’s skill levels increases. If you graph this out the lines between the salary cost and recovery probably intersect about 1.5 to 2.0 years into the process and usually by the third or fourth year the revenue and profit generated by that employee has normalized. That of course is good news.

Better news is the fact you have taken a potential employee and turned them into a skilled employee who has been integrated into your system, bought into your company culture, is a loyal employee, has spent three to five years becoming part of the “family” and understands that he or she has chosen a career that is meaningful and rewarding. Bottom line the turnover we have experienced with these “Grow Your Own” employees has been very low. Thus, we enjoy savings for many years of not have to fill and re-fill those positions. It adds stability to the employee base plus with less turnover being able to grow your business because of this stability is critical and well worth the effort.

Bottom line is the ROI is gradual but worth the time and efforts. Again, sighting our company, where we engage a lot in promoting from within, we really know these individuals we understand their strengths and their loyalty is undiminished. We are engaged in Filling Careers not just Filling Positions.

I grew up in a construction family and worked for my Dad several summers during and after high school. Then while working on my degree at North Dakota State University I was hired by a construction equipment dealership. I started in their service department part time until I finished college. Then full-time service employment for a couple of years then transitioned into sales management. During the recession of the early 1980’s myself and three other managers started General Equipment & Supplies, Inc.

First as Sales Manager and eventually as President we grew our business from one location and 20 employees to 10 locations in four states and two Canadian Provinces and over 250 employees. Along the way we developed relationships with area Technical Colleges and created a College Tuition Reimbursement Program where today we Recruit a handful of new technicians annually into that program. Our company has also developed two Department of Labor Certified Apprenticeship Programs to fill hard to find skilled positions. I am currently semi-retired as Chairman of the Board.

For more information on how we can help with your employee development, please visit us at Learning Without Scars.

 

 

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Goals and Targets

Goals and Targets

Goals and Targets

Today marks another guest post from Steve Day. Steve received a degree in Electrical Engineering and then served in the US Navy. He started with Komatsu America 1978. For the next twelve years Steve worked through various equipment sales positions before becoming the Vice President of Parts, Vice President of Service. During this period Steve sat on the board of a major distributor in the North east US as well as Hensley Industries. After twenty-five years Steve moved from the OEM side of the business to the Distribution side by joining Tractor and Equipment Company in 2003 as Vice President of Product Support. In this piece he is walking us through goals and targets.

Throughout his career Steve has learned the Industry from the ground up. This allowed him to have a very clear view of what was needed to support customers, employees and owners in their pursuit of excellence. Working at high levels in both the Manufacturing and the Distribution side of the business gave Steve some great learning opportunities and chances to develop insights.  Steve retired in January of 2020.  After spending 40 plus years in an industry we are very pleased to be able to share some of Steve’s insights with you and honored to consider Steve a friend.

Here are the areas that I think a manager should focus on and continually question his inventory management about.

“Goals and Targets”

I like to have Companywide and branch targets for the following:

  • Over the Counter fill rate for each branch and for the company for stocking parts by manufacturer.
  • You want to see your fill rate on parts you stock and your total fill.
  • You are going to want to see this monthly.
  • Turns by manufacturer. You can measure this by annual turns or weeks on hand.
  • This is how you will know how your money is working. This is a big issue with me.
  • If you have a smaller manufacturer with low turns and low parts margins then you better be making lots of money when you sell the machine. Otherwise I would rethink the relationship.  Time is money and I don’t like spending time unproductively when I can allocate time and money to more productive areas.  That sounds cold doesn’t it.
  • Monthly
  • Emergency and Critical order charges by part number.
  • Weekly (otherwise it is too hard to get your arms around). This is helpful in deciding if you need to add some parts to stock and also gives you an idea of some problems your manufacturer might be having with availability.  It lets you act early.
  • Parts being expedited.
  • You want this daily. Set a target for you inventory group to be expediting parts that you don’t have an acceptable delivery date on each day.  Split it between customer orders and service department orders.  If you get this right, it will change your company.
  • Your goal (this is a “Ron Sleeism’s”) is to have an answer on every part being expedited every day. Like many goals it is probably impossible to achieve most days but it will drive far better customer support.
  • Stock order parts being expedited.
  • If you lose track of how your stock orders, special marketing orders and other specialty categories are being fulfilled you set yourself up for some trouble down the road.
  • Don’t ever assume that suppliers are going to hit their lead times. If you don’t track stock order fulfillment you can easily run out of fast movers and kill your availability. Run this report at least weekly and you will save lots of heartburn.
  • Reports on specific manufacturer marketing programs.
  • There are real opportunities to make money if you manage your inventory and utilize manufacturers marketing programs. Take advantage of discounts.  You won’t know what you are missing unless you track it.
  • Additionally, manufacturers look at how well you utilize programs.
  • If the program doesn’t work for you, talk to them about it. Often, they will modify it to fit your needs.  If you ignore them, they will think you don’t care.
  • Non-stocking parts by part number.
  • I will talk about this in detail later but you should have a list of every non-stocking part in your inventory and another report showing every non-stocking part that has been on a non-invoiced customer ticket for more than a week and on a work order for more than two weeks. This is a critical report.  You want to constantly question these parts.  Call the branch service manager or parts manager and ask them why the part has not been invoiced.  Keep the pressure on with these parts.
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Motivation

Motivation

Motivation

I grew up in Montreal, Quebec, Canada and during that time Montreal got a baseball franchise called the Montreal Expos. The Manager of the team was a man named Gene Mauch. He had a storied career and was instrumental in selling baseball to the Montreal community. Montreal has a bit of baseball history as Jackie Robinson started his professional baseball career playing for the Montreal Royals. In the early years the Expo’s made a trade with the New York Mets and obtained a shortstop named Tim Foley. He was a real talent but he was also very aggressive. He fought with his teammates at practice. A reporter asked Mauch about this “why do you keep him; he is such a disruptive force?” In his response he said “I would rather tone down his attitude than try to create the right attitude in someone who doesn’t have it.”

I couldn’t agree with that comment more. I have always said “I can’t motivate anyone. If you don’t come to the job self-motivated, I can’t give it to you. But…I can easily demotivate everyone.” So, my approach to most everything is to ask, “what stands in the way from you being able to do a better job?” or, “what is the part of the job you like the least?” And then we get to work to get rid of the obstacles.

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” – John Quincy Adams.

So how do we get every employee driven to dream more, learn more, do more and become more? I believe it is helping each individual person to become more than they thought they could be. Creating expectations. I have been involved in this aspect of life since I was a teenager. My sport was swimming growing up. I swam a lot, some five hours a day for many years. But swimming is an interesting athletic pursuit. You are not competing with the other swimmers in the race with you. You are competing against yourself. The clock is your competitor. The only way you win that race, against the clock, is by changing your strokes, by adapting how your body sits in the water. In other words, you make changes. I grew up understanding that to progress you had to embrace change.

Within Learning Without Scars using our job function assessments and integrating them within an annual performance review as a standard within your company you start too can this process of embracing change.  You can talk with each individual employee about their assessment scores. That allows you to discuss where the employees think they can do better. What do they need to do or have happen in the systems or procedures to get better results? You can arrive at a specific learning plan to fill in the skills and competency gaps. What we call a “Learning Path.” When you look at the classes in our Learning Without Scars business you will see four skill levels for each job function; Basic (0-25), Intermediate (26-50), Advanced (51-75) and Expert (76–100). Please Note: we have recently adjusted these skill levels to more accurately reflect the latest results of the employees taking our assessments.

Through this process each employee has the opportunity to dream more, learn more, do more, and become more. Shouldn’t that be the goal for all of us?

The time is now.

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Information Stagnation

Information Stagnation

This guest blog is from Brad Stimmel. Brad Stimmel is the retired CEO of Ascendum Machinery.  He was also the President of the Volvo Dealer Advisory Council for 10 years. In addition, he was a 15 year member of the Executive Forum group that provided updates twice per year for studies in Executive Management led by the International Negotiation & Management Co. (INM). His rich experience and expertise brought about this writing on information stagnation.

Prior to this, Brad worked with 4 other dealers that represented major OEM’s such as Caterpillar, Komatsu, and Ingersoll Rand.  During his career he has served in various roles – Sales Representative, Service and Parts Manager, Remanufacturing Center Manager, Branch Manager, Regional Manager, and VP & General Manager. He has been in the construction and industrial equipment business for over 43 years serving always at the dealership level.

Brad Stimmel holds a Bachelor of Science Degree in Engineering from North Carolina State University and an International Negotiation and Marketing degree from the Executive Management Institute.

Information Stagnation

Today’s “Digital Information Transition” is well underway for all equipment dealers willing to take the big step. Once dealer leadership has embraced it, all operations have more current information than ever before.  Many forward planning dealers have made great use of current technology to make better decisions that can leapfrog the past costly mistakes caused by delays in data collection and reports.  Most of the time, in the past the mistakes were identified long after the time to correct them had passed by.  If you have been around the business for a long length of time, then you know in the past that some reports or even financials were created monthly, quarterly, annually, or not available at all.  The ERP systems of today have evolved rapidly. More information is available on a real time basis. Drilling down into data is instantaneous. Dashboards are available by individual responsibility level.  Let us name this “Digital Awareness”.

Congratulations if your top management has embraced Digital Awareness. Sadly, many have yet to make the move. In some cases, this procrastination is appropriate.  This paper is written for those that are already making the digital transition and may be working to make the best use of this new powerhouse of current information.

Many of us remember the past times when the cliche “Analysis Paralysis” was used to describe spreadsheets of data that were historical in nature and caused a pause in action but no real current impactful corrective change at the operational level.

So, what are the pitfalls of Digital Awareness. Sometimes the free and easy access to real-time reports create an avalanche of graphs, comparisons, complex information communication, unrelatable information, misunderstandings, and false reports due to wrongly organized analysis.  This will now occur at all levels of the organization.  Sometimes the reports are created by the finance department and delivered to operational managers with not clear expectation of the decision needed to avoid mistakes or worse, no training as to what the graph even represents.

Now enters “Information Stagnation”.  The typical manager is faced with daily tasks that occupy most of his time and thoughts.   They have years of experience with real-time solutions that create customer and employee satisfaction, and these events happen every hour.  After all this has always been their primary objective.  There is little time left to work on improving company efficiency by acting on the new current information. This will require strategic planning and complete understanding of what is indicated by the data presented.  The data is available with high accuracy and floods the computer daily. Top managers of the company are likewise flooded with reports covering possibly all stores, or all departments, all inventories, all employee performance measure, or all financial metrics.  This overload is eventually eliminated by the employees who ignore the redundant or misunderstood report and send it to the digital basement. Not because of complacency but just a self-defense mechanism. The skilled employee goes back to what is familiar and comfortable based on the many years of experience they have collected over their career.

Is there a solution? Yes, but they are not easy steps to take.

First, do not let the CEO, CFO, or CIO embrace the temptation creating reports and force feeding the departments with an avalanche of data analysis.  I recently learned of a CFO that was exuberant about the capabilities of the new digital transition and created hundreds of graphical reports that were sent out to the managers. That CFO quickly realized that she had created information stagnation and set about ways to start correcting her mistake.

So, follow some simple steps.  The first step is to create a brief and simple set of measurable objectives for each main area of the company at the executive level. Then communicate these to each employee that has the responsibility to impact or improve these objectives. Of course, they should be broken down by department.  Next, create an orientation presentation that fosters trust in the new digital awareness data. TRUST is the key word here. The data must be clear, easy to read and pertinent to each person’s role.  Since communication at this point is critical, ask for follow up written confirmation of understanding of the objectives and the reports, dashboards, or graphs.  Most of the time this can be best completed with a task force of current experienced employees.  A team discussion is best and can be a good use of virtual meeting technology.  But if the company is large, a senior Digital Implementation Manager might be appropriate.  The new position will need to be a person that possesses good people skills and strong technical knowledge of the operations and the software.  This should come from within the company.  The primary objective will be how to best facilitate the transition and engagement.

The next step is leadership.  To prevent future “information stagnation” ongoing, executive leadership should create robust follow up communication measures with all levels to identify and celebrate successful objective completion.  This is the most difficult step because it requires the executive dedication of time and resources to accomplish.  Also, the intestinal fortitude to be continuously adapting and communicating the objectives and its measurable results as they are continuously evolving.  This is the step that will cause meaningful results improvement short and long term.  But each company will have to create its own methods to do this based on the organization circumstances.  Each executive manager should analyze the company’s true culture and then act.  Not doing this will cause the company to fall back to information stagnation in the future.

I spoke recently to a CEO of a large dealer that has been doing this for over three years with success but exclaimed to me that it is an ongoing evolution of subtle change and reinforcement.

Best of luck as you venture on this journey.

For more information on our classes and assessments, please visit us at Learning Without Scars.

 

 

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Parts Inventory Management

Parts Inventory Management

Today we continue with another guest blog from Steve Day.

Parts Inventory Management

In the next several blogs we are going to be discussing inventory management.  Please try to stay awake.  There are thousands of books on this topic and I am not going to write another one.  I am not going to go into excruciating detail since most of those books do a pretty good job of causing pain.  Instead I am going to focus on a few areas that a Product Support GM or a Distributor Principal should focus on to drive customer support and profit.

I have managed Parts Operations at both a manufacturer and a distributor.  I am going to be focused on distribution for purposes of this blog.

Manufacturers and Distributors have similar goals for their parts operations.  We both want to take great care of our customers, provide real value, sell lots of parts and make lots of money.  We also have very different areas we need to focus our efforts on.

I will start with a personal anecdote.  When I moved from a manufacturer to a distributor, I decided to take a very aggressive inventory position to provide the best level of support I could.  If we sold a part in the company twice a year, we were going to stock it.  My over the counter fill immediately moved up a couple of points. Then it just sat there barely moving a tenth of a point year after year.  What was going on?

I decided to run reports to see how parts that met the two sales in a year criterion fared in the years following them being put into the system.  I didn’t see what I wanted to see so I went back another year and then another year and I kept seeing the same thing.  Almost ninety percent of the time a part that sold twice (and only twice) in a year did not sell at all in the following year.  I looked at parts that sold three times next.  More then seventy five percent of the time it did not sell at all the following year.  To make matters worse, when the parts did sell the customer was often the manufacturer or another dealer who couldn’t find it at the manufacturer.  I was trying to take on the role of the manufacturer.  I was also stocking a whole bunch of inventories I didn’t need, couldn’t sell and didn’t help either my distributorship or my customer.

We changed our focus on stocking criteria, expediting, weeks on hand, branch levels, logistics and targets.  We changed management in the department and our focus.  We went from a bit over two turns a year to eight turns a year and our branch over the counter fill rates and company fill rates improved.  It happened in less than 6 months.  I didn’t feel proud.  I felt very foolish.

For more information about Parts Inventory Management, please visit us at Learning Without Scars.
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Grow Your Own

Grow Your Own

This week brings our third guest post from Don Shilling. Now it is time to talk about how to “grow your own” workforce.

Don Shilling

I grew up in a construction family and worked for my Dad several summers during and after high school. Then while working on my degree at North Dakota State University I was hired by a construction equipment dealership. I started in their service department part time until I finished college. Then full-time service employment for a couple of years then transitioned into sales management. During the recession of the early 1980’s myself and three other managers started General Equipment & Supplies, Inc.

First as Sales Manager and eventually as President we grew our business from one location and 20 employees to 10 locations in four states and two Canadian Provinces and over 250 employees. Along the way we developed relationships with area Technical Colleges and created a College Tuition Reimbursement Program where today we Recruit a handful of new technicians annually into that program. Our company has also developed two Department of Labor Certified Apprenticeship Programs to fill hard to find skilled positions. I am currently semi-retired as Chairman of the Board.

In my previous blog I talked about “High Demand Jobs” and the need to Grow Our Own by recruiting for skilled positions we need filled. It is possible to use the Local, State and Federal Programs that exist today to help underwrite part of the cost of educating our new workforce and/or developing our workforce. . .. That is quite a mouthful but if you break it down it is fairly simple.

Our Federal, State and Local governments are really beginning to understand how the shortages of skilled workforce is impacting our economy. They are all scrambling to help find solutions and frankly they are also looking for your guidance and input.

Because of Covid 19 we are hearing a lot of talk about “re-tooling” our workforce so that people who were employed found themselves suddenly unemployed by what became an unstable and perhaps unskilled career path. These workers are looking to make a change and find a new career that will add stability to their families and futures. Our Adult Learning Centers are going to become busy places as these programs expand and flourish.

Business and Industry are being called on to help support these expanding programs and if you think your business can benefit then you better be seeking out these opportunities. In many cases State or Local dollars are being matched with private sector dollars to bring these programs to life.

What does that mean for you and your organization? It means you might end up hiring or supporting an older than average person(s) who wants and needs a new career. You will help develop this person, first with initial training and inevitably additional continuous training until you have a strong and highly competent employee. That is:  Growing Your Own.

This initial Education coupled with Continuous Training builds your staff in a very positive way. The training starts with a comprehensive On Boarding process as they first report to work. Then things like safety training and specific work center orientation. These new employees don’t know what they don’t know so don’t skip steps. These Employees that you have Grown on Your Own will recognize their new skill sets which creates positive attitudes for all and at the end of the day the customers you serve will see this positive influence. There is no real down side to Growing Your Own!

For help in growing your own workforce, please visit us at Learning Without Scars.