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Chipotle, Starbucks, and the Huge Construction Machinery Dealers

Chipotle, Starbucks, and the Huge Construction Machinery Dealers

Guest writer Andy Fanter dives into the cross-industry pool with today’s blog post: “Chipotle, Starbucks, and the Huge Construction Machinery Dealers.”

Starbucks has been struggling. Plenty of national chains and local competitors are offering coffee and related snacks. Chipotle has been growing for years with a simple model. Come make your burrito or bowl and order a high margin drink. We are not cheap, and do not study the calories and sodium too much. Fresh ingredients taste good, and people come to get it for lunch and dinner. Starbucks hired CEO Brian Niccol from Chipotle to fix the problem. His solution:  reduce the menu and make stores less chaotic. Sell hot and cold coffee drinks and related snacks—and be faster. The best products….faster.

 

How does this apply to the construction machinery dealer? I have been in this business 30 years, and around it since the late 1970s. Consolidation has made dealers excessively big; billion dollars in revenue surprises no one anymore. Smaller competitors chip away at market shares—sound familiar, Starbucks. Dealer reaction, flat forecasts to stay big. The US economy and construction are expanding 85% of the time. Why not order more of the best 10 to 15 products expecting to grow those sales by 10% next year?

 

Here is what I am seeing with flat forecasts. Get into spring and dealer needs more machines—months from manufacturer, standard. Neighboring dealer-takes top management time to negotiate a deal. Buy used equipment for rental fleet and sell from rental fleet. Now the used division is not happy having to add to the rental fleet instead of to customers. Product support starts to get busier and trying to get used machines ready for rental fleet. The rental reps are not happy because good machines are being sold. Finally, the regular field sales force is unhappy because there are not enough of the best machines to go around. A year spent holding, or likely slipping in market share. The sales force does best when they have the best items to offer customers.

 

The machinery dealer needs to be a mix of Starbucks and Chipotle. Manufacturers and customers insist on a wide range of products, and locations—a little chaotic like Starbucks. Dealers know the hot models that their customers prefer. Have plenty of those, new, and ready to go—Chipotle model. 

 

It is much easier for the reps to get more deals for a variety of products when they do not have to account for long delays on the best products. What happens if you order too much? Dealer trades and adds to the rental fleet.

 

Just like Starbucks manages through the chaos.

 

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Slow to Hire, Quick to Fire… BS.

Slow to Hire, Quick to Fire… BS.

This post is a reprint of the article by the same name by Rich Cruz.

Antiquated Hiring Philosophy May Hamper Growth

Recently, I applied and interviewed for an open executive position at a well-established company in the construction industry. Despite its success and expansion, my experience with their hiring process raised serious concerns. After nearly two months of waiting for my first interview and being told the hiring decision wouldn’t be made for at least two more months in the future, I underwent three interviews and was asked to produce a detailed 30, 60, and 90-day plan. Excited to move to the next level, I submitted a high-level outline of a plan via email, explaining that I cannot deliver a full plan without knowing more about the company through examining and analyzing data. The hiring manager insisted on a full PowerPoint presentation, and he coupled his request with the statement, “I am slow to hire and quick to fire.” This led me to withdraw from the process. This phrase, often touted in business owner coaching or peer-group circles, prompted me to delve into why it might have some fundamental flaws.

 

The Myth of “Slow to Hire, Quick to Fire”

 

The phrase “slow to hire, quick to fire” has its roots in the belief that thorough hiring processes ensure better employee fit and swift terminations minimize the impact of poor hires. Proponents argue that this approach leads to a more productive and harmonious workplace. Indeed, some literature supports this philosophy, such as articles from Harvard Business Review and Forbes. However, from an Industrial-Organizational Psychology perspective, this approach can pose a detrimental threat to both individual and organizational performance. While hiring for fit for a position with a company should involve rigor, too many assessments, interviews, work samples, or other forms of evaluation can reduce the pool of candidates and pose risks to the organization.

 

The Downside of “Slow to Hire”

 

An unbalanced approach that does not emphasize timely and efficient hiring processes can create detriments for both employees and organizations. Some drawbacks include:

 

  1. Talent Drain: Lengthy hiring processes can lead to the loss of top talent. High-caliber candidates often have multiple opportunities and may not wait months for a decision. As Peter Drucker famously noted, “The best way to predict the future is to create it.” Creating a future with top talent requires swift, decisive action.
  2. Increased Costs: Prolonged vacancies can result in significant costs in terms of lost productivity and the expenses associated with extended recruitment efforts. According to Kouzes and Posner, effective leadership creates a vision and rallies people around it. Delays in hiring disrupt this vision and impede progress.
  3. Negative Candidate Experience: A cumbersome hiring process can damage an organization’s reputation. Candidates talk, and word spreads quickly about companies with inefficient recruitment practices. This can lead to a tarnished employer brand, making it harder to attract top talent in the future.

 

The Pitfalls of “Quick to Fire”

 

Similarly, organizations that fail to invest in their employees and nurture organizational citizenship behaviors (OCBs) with on-the-job training, coaching, rewards, and other reinforcement can suffer consequences such as:

 

  1. Cultural Impact: Frequent terminations can create a culture of fear and uncertainty. Locke and Latham’s Goal Setting Theory emphasizes the importance of clear, attainable goals for employee motivation. A “quick to fire” approach undermines this by fostering instability and mistrust.
  2. Loss of Investment: Hiring and onboarding can cost as much as 1.5 times a worker’s salary. Quick terminations mean the organization loses its recruitment, training, and development investment. Additionally, the constant churn can disrupt team dynamics and hinder long-term projects.
  3. Erosion of Employee Morale: The psychological contract between employer and employee has its foundation in mutual trust and respect. When employees see their peers seemingly indiscriminately terminated, it can lead to decreased morale, engagement, and loyalty. Positive Organizational Behavior (POB) framework – which highlights the importance of hope, confidence, and resilience in fostering a productive workforce – supports the consequences of broken psychological contracts.

 

Evidence from Experts

 

The literature from scholarly resources and best-selling authors offers insight into better ways to attract and retain top talent.

 

  1. Peter Drucker: Drucker emphasized the importance of nurturing talent and creating a culture of continuous improvement. His writings suggest that a balanced approach to hiring and firing, focusing on development and fit, provides a more sustainable workplace than extreme practices.
  2. Kouzes and Posner: In their works on leadership, Kouzes and Posner highlight the significance of fostering an inclusive, supportive environment. Leaders should focus on building relationships and empowering employees rather than relying on punitive measures.
  3. Locke and Latham: Their Goal Setting Theory underscores the need for achievable goals for individuals and work groups tied to organizational objectives. A hasty firing approach disrupts goal alignment and diminishes the sense of purpose within the organization.
  4. Angela Duckworth and Carol Dweck: Their research on grit and growth mindset, respectively, points to the importance of perseverance and learning from mistakes. Quick terminations deprive both the employee and the organization of the opportunity to grow and improve.

 

While “slow to hire, quick to fire” might appear as a catchy mantra, it falls short when scrutinized through the lens of Industrial-Organizational Psychology and leadership theory. A more balanced approach, emphasizing timely yet thorough hiring processes and supportive, development-focused retention strategies, is key to fostering a thriving organizational culture. My recent experience underscores the importance of evaluating not just the processes but potential employers’ underlying values and culture. Ultimately, businesses that invest in their people by balancing rigor with empathy possess a better chance to succeed in the long run.

 

References

 

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SmartEquip Sets Its Sights on New Markets

SmartEquip Sets its Sights on New Markets

This week we present an interview by Jenny Lescohier. She spent some time with Alex Schuessler to give this report: “SmartEquip Sets Its Sights on New Markets.”

Part of Ritchie Bros’ umbrella of companies, SmartEquip looks to expand its equipment lifecycle support and parts procurement platform across the globe

 

To the digital natives in today’s rental industry, SmartEquip’s presence as a service support platform might be taken a bit for granted. Its role has become so integral in its customers’ operations, some users might not be able to imagine the way things used to be done.

If you ask Alex Schuessler, founder, and president of SmartEquip’s International Group, he’ll tell you things have come a very long way since 2000, when the company started.

Alex Schuessler, founder & president, International Group.

 

SmartEquip now supports almost eight hundred suppliers worldwide and more than one hundred rental fleets on its system, including the top five global rental companies.

“For the typical rental company anywhere in the world, approximately 1% of overall spend is on parts. And yet, in the absence of our technology platform, because of the operational overhead associated with parts procurement, it will still be the most expensive type of purchase,” he notes. 

“First, you need to be a service technician to identify the right parts for your equipment. And when you get it wrong – which is often the case, because it’s very difficult to get the right parts for the right make, model, and serial number – the consequences are costly, not just in terms of service technician time, but also equipment performance: even if just one the 10 parts you order is wrong, that equipment will be down for at least another 24 hours.”

 

He adds, “Service technicians themselves are the most expensive employees in a rental operation, and they are increasingly hard to come by. So that’s really what we first focused on, and we subsequently became very obsessive about everything to do with the machine lifecycle and how to reduce associated costs along the way. The ultimate question was, how do we minimize downtime, and how do we accomplish this in an industry-spanning way?”

We talked with Schuessler to find out more about SmartEquip and how it’s affected the way rental companies procure parts and more. Here’s what he had to say:

Rental Briefing: What led you to SmartEquip?

Schuessler: I was originally trained as an economist and political scientist specializing in data science and worked as a junior professor at New York University. One of the things I was always very interested in was how to make the ever-increasing amounts of data the world was generating usable, and actionable for people who were not data scientists.

While I was at NYU, through a weird set of coincidences, I was asked to give some advice to a former Caterpillar executive who had just been invited back to help Cat launch a corporate rental initiative for dealers across South America.

I became one of the co-founders of a global equipment rental consulting group initially called Caterpillar Rental Services Network Inc. (CRSNI), which later rebranded itself as Script International.

We created rental locations across forty-five countries, initially across South America for dealers there, and later, across the Middle East and Europe, too. Much of what we did back in the 1990s found itself in what is known as The Cat Rental Store today.

While we’re doing that, as an economist I became very involved in modeling the power of rental in helping dealers cope with an environment of hyperinflation, as was rampant in those days. But I also began to look at fleet efficiency, return on asset, equipment lifecycle costs, and so many other things. I thought, there’s so much opportunity here for technology to drive efficiently.

We seed-funded SmartEquip with a focus on helping large equipment rental companies like United Rentals, Sunbelt Rentals, and NationsRent support service technicians and automate the procurement of tens of thousands of different parts from hundreds of different suppliers in an efficient, serial number-specific way to reduce service labor and equipment lifecycle costs and improve equipment uptime.

SmartEquip is both a service support platform but also a purchasing and procurement environment.

Rental Briefing: How has SmartEquip grown over the years?

Schuessler: Over the past 24 years, SmartEquip has grown to support almost eight hundred suppliers worldwide across more than one hundred rental fleets through its network, and this includes the top five global rental companies.

A major milestone was the 2021 acquisition of SmartEquip by Ritchie Bros. (now RB Global), which represented a movement in focus by RB Global, which had begun with the earlier acquisition of Rouse. RB Global has long been the global leader in supporting the buyer and the seller in the transactions of equipment, in maximizing the returns for buyers and sellers alike. With the acquisition of services companies, RB Global now turned its attention to maximizing the returns on owning equipment as well.

This, of course, has always been SmartEquip’s obsession: Our goal had never been to maximize the returns on an asset sale, but to maximize the returns on asset ownership.

RB Global bought Rouse a couple of years prior, given its focus on helping companies understand their performance by benchmarking pricing and utilization metrics using localized market information, and providing localized market values by showing in near-real time, what a fleet’s assets are worth in the retail and auction market.

With Rouse and SmartEquip, RB Global offers a full lifecycle experience to the owner, be it for the bookends of equipment acquisition and disposition, or the period of ownership in between the two. It’s become a very full set of solutions that covers everything that affects equipment owners, from the purchase itself, to helping determine when to sell, all while minimizing the cost of service and support along the way.

On a practical basis, the acquisition by RB Global provided us with access to a global corporate infrastructure, strategic accounts and partnerships which have all contributed significantly to accelerating SmartEquip’s growth.

Rental Briefing: What markets is SmartEquip focusing expansion on?

Schuessler: We are currently witnessing record growth rates, not just in North America, but across Europe and Asia-Pacific as well. In Europe we have sufficient penetration among the largest rental companies, who have taken the lead in making us an industry standard, such that we can now expand into supporting mid-sized rental companies as well.

In Asia-Pacific, Japan is a major focus due to its rental-focused market with over 85% rental penetration. Factors like low rental rates increase the potential impact not only of SmartEquip’s cost-reduction solutions, but also of the positive impact Rouse can have to make informed fleet management and capital allocation decisions. Two of the four largest Japanese rental companies are already on SmartEquip, and we are projecting significant growth for the years to come both here, as well as across other APAC nations such as Australia.

Rental Briefing: What challenges exist in these new markets?

Schuessler: Cultural differences can pose initial challenges to adoption, especially in Asia-Pacific markets like Japan, where relationship building is important. However, the goals of optimizing equipment utilization and costs are globally consistent, so the solution is remarkably robust across the international scope.

Unique local market factors may also impact SmartEquip’s solutions. For example, Japan’s low rental rates mean profitability for a given asset is often only achieved toward the end of its ownership lifecycle, at the point of resale. This increases the potential return on SmartEquip’s solutions that aim to reduce costs and inform optimal resale timing across the ownership period, and it increases the potential return on Rouse solutions, by helping users leverage their data to compete effectively and make informed, timely disposition decisions.

Understanding such nuances is crucial for SmartEquip to tailor its value proposition. While technology implementations may face initial hurdles, cloud-based offerings have made SmartEquip more accessible worldwide.

Partnerships are also vital, like SmartEquip’s strategic local partner in Japan that mirrors its business model and relationships. Overall, different markets represent greater opportunities due to SmartEquip’s unique ability to impact equipment ownership economics.

Rental Briefing: What is the SmartEquip e-commerce platform?

Schuessler: Originally launched as a “webshop” extension for equipment manufacturers who were already partnering with SmartEquip, the eCommerce platform has since evolved into a full-fledged solution for any company seeking to sell parts online.

Parts e-commerce requires far more extensive data structures than standard e-commerce applications, and this is where SmartEquip leverages its extensive industry knowledge to ensure accuracy and efficiency, alongside ease of use. This provides a far richer shopping experience in an equipment context, compared to general e-commerce platforms which cannot support the complex transaction surrounding parts.

Recent additions include more extensive options for online payments and user registration, supporting the use of the platform as a standalone solution rather than just an extension of SmartEquip’s Network. It has seen success with manufacturers and with dealers and rental companies who are also selling parts to their customers.

Published on 21 May, 2024

About International Rental News (IRN)

International Rental News (IRN) is written for equipment rental companies worldwide. Our readers operate in sectors including construction, general industry and events, and rent equipment including construction machines and tools, aerial platforms and telehandlers, portable accommodation, shoring equipment, and power and heating and cooling equipment.

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Daimler and Volvo announce truck tech partnership

Daimler and Volvo announce truck tech partnership

A paper by Jason Cannon

 

Aloha

I thought that I should share this across our blog community because of what this represented. 

Volvo and Daimler sharing software is a truly significant happening. I congratulate them for thinking about their customers first. 

If only there was a standard platform for all equipment manufacturers so allow their customers to select software that they want to track all of their equipment regardless of brand. Think about the possibilities. Electronic Catalogues. Standard Times for Repairs and Maintenance. Instructions on performing repairs. Special glasses like BMW Augmented Reality from the 1990’s to talk to a technician performing a repair and telling them the tools to use, the specification, the repair steps all with graphics on the glasses. Just imagine that.  

Daimler and Volvo announce truck tech partnership.

By Jason Cannon

Volvo Group and Daimler Truck have reached a preliminary agreement to establish a joint venture to develop a common software-defined vehicle platform and dedicated truck operating system, which the companies expect will provide the basis for future software-defined commercial vehicles and make the new joint venture a leading developer of standardized hardware and software. 

 

This technical basis, the companies said, will then enable Volvo Group and Daimler Truck – 50/50 partners in the joint venture – and potentially other partners to provide “differentiating digital vehicle features for its products, ultimately enhancing customer efficiency and experience.” The joint venture is set to be headquartered in Gothenburg, Sweden, incorporating existing assets and resources of both companies into the new organization. The goal, both stakeholders said, is “to set the industry standard for a truck operating system and offer its products to other OEMs as well. To that end the joint venture will provide a common developer platform as a service, on top of which its customers can build differentiating software layers.” 

 

The two commercial truck giants in 2020 established a joint venture to develop hydrogen fuel cells. That joint venture, named cellcentric, included operations in Nabern, Germany, headquarters of the Mercedes-Benz Fuel Cell, with production facilities in Germany and Canada.

 

“Given the rapid transformation of our industry, it makes sense to collaborate to accelerate development, increase volumes and share costs. Software-defined heavy-duty trucks represent a paradigm shift in the transformation of our industry,” said Martin Lundstedt, Volvo Group president and CEO. “Making the truck a programmable device with standardized hardware and operating system for fast product updates will give both companies the opportunity to create value for our customers and their customers though differentiating digital services and solutions. Partnership is truly the new leadership.”

 

The Volvo Group and Daimler Truck venture will operate as an independent entity, with the two continuing to be competitors in all other areas of business.

Jason Cannon has written about trucking and transportation for more than a decade and serves as Chief Editor of Commercial Carrier Journal. A Class A CDL holder, Jason is a graduate of the Porsche Sport Driving School, an honorary Duckmaster at The Peabody in Memphis, Tennessee, and a purple belt in Brazilian jiu jitsu. Reach him at jasoncannon@randallreilly.com. 

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It’s Time to Love the Cloud!

It’s Time to Love the Cloud!

Technology isn’t something to be feared. Used responsibly, technology is a tool that can assist us in our work. It’s Time for all of us to Love the Cloud!

Don’t you hate it when you can’t access the correct customer data or someone on your team has completed something, but you don’t have access to it?

These things seem minor in single instances, but the reason people love the Cloud is that these challenges, when constant, stop dealerships from moving forward. The Cloud unlocks data, unlocks your teams and does it all in usually a more safe and accessible way than traditional technology approaches.

The first thing to note is that people often don’t understand the Cloud. They either overcomplicate it or oversimplify it. Let’s see if we can get everyone on the same page about the Cloud.

I asked ChatGPT to tell me how to explain the Cloud to a six-year-old, and it came back with a pretty decent basic explanation:

“Imagine the Cloud like a giant invisible backpack in the sky. Instead of carrying toys or books, it carries lots and lots of information and programs for computers. So, when you want to watch a video or play a game on your tablet, the Cloud helps send that video or game to your tablet so you can enjoy it. It’s like a magical helper that stores and sends things to your device whenever you need them, making it easier for you to have fun and learn new things!”

But we’re still oversimplifying it. The Cloud isn’t something magical in the sky—instead, it comprises a vast network of connected super-powered computers and servers. They exist in physical format in giant data centers located around the world.

Instead of storing data or running programs on your personal computer or dealership servers, you can store them and access them through this network of computers on the Internet. While these servers sit in actual buildings and real places, for you, the user, it’s like having a virtual storage space and computer power that you can tap into whenever you need it without worrying about the physical limitations of your devices or servers.

So why has the Cloud become so essential and influential in helping us run our businesses?

The reality is that the amount of data and computing power we may need to operate effectively, combined with the need to share this across your dealership, has made the Cloud invaluable. It provides flexibility and accessibility.

This flexibility allows you to access your data and run programs from anywhere with an Internet connection, making it convenient and efficient for your business and personal needs.

Most small businesses can successfully leverage the Cloud. Here are the top four uses that can make a significant difference:

 

1.) Data Storage and Backup

Because the Cloud offers flexibility and relatively simple access, it is a wonderful place to store and back up data securely. It means your critical business data and information will be protected from loss due to hardware failure, theft, or disasters. Because cloud storage solutions offer scalability, expanding storage capacity as needed is easy.

2.) Software as a Service (SaaS)

Leveraging cloud-based software applications, or SaaS, for various business functions such as customer relationship management (CRM), accounting, project management, and collaboration is a cost-effective way to access robust solutions without upfront investments in hardware or software licenses.

3.) Email and Communication

Cloud-based email services, like Microsoft 365, offer small businesses and dealerships dependable and feature-rich email communication tools. These services also often include additional collaboration features like document sharing, video conferencing, and instant messaging – enhancing team productivity and communication.

4.) Remote Work and Collaboration

The Cloud enables dealerships to support remote work and collaboration among employees. Cloud-based productivity tools, file-sharing platforms, and project management software allow team members to work together seamlessly from anywhere with an Internet connection. This flexibility boosts productivity and enables businesses to adapt to changing work environments.

Making the most of the Cloud securely

While the Cloud offers flexible, scalable solutions that tend to be more secure than other solutions, it isn’t infallible.

Overall, the combination of expert security measures, continuous monitoring, redundancy, encryption, compliance, and access controls makes the Cloud a secure option for storing and managing data. But mistakes can still be made.

While Cloud service providers invest heavily in security measures and employ teams of experts to protect data, breaches can still happen due to factors such as human error, misconfigurations, or sophisticated cyberattacks.

Forty-five percent of breaches are cloud-based. According to a recent survey, 80% of companies have experienced at least one cloud security incident in the last year, and 27% of organizations have experienced a public cloud security incident—up 10% from last year.

According to recent research, the top security-related cloud threats are misconfiguration, data exposed by users, account compromise, and vulnerability exploits. This data tells you that it’s critically important for organizations to implement their own security best practices and carefully manage access to cloud resources to ensure maximum security.

This includes practices such as implementing strong access controls, encrypting sensitive data, monitoring for suspicious activities, and keeping systems and software up to date with security patches. Additionally, organizations should train employees regularly on cybersecurity best practices to minimize the risk of data breaches.

This can sound like a lot of work for a dealership, which is why getting the right support is so critical. Many companies are still relying on someone relatively IT-friendly getting involved or being asked to manage the IT on behalf of management. As IT gets more complex, this approach really isn’t viable anymore, but most dealerships can’t afford a fully internal IT department. The gap in between is the space where organizations get let down. Looking externally for a managed outsourced IT provider is a cost-effective and efficient way to solve this problem. Proper support can help you love the Cloud and IT.

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21 Ideas for Managers

Celebrated the world over for his gentle wit and keen insight into human behavior, Charles Handy is widely regarded as one of today’s best social and business philosophers. This latest collection of Handy’s work groups twenty-one of the revered BBC commentator’s best essays on why organizations and the people in them behave the way they do. Beginning with “A World of Differences,” which voices Handy’s fresh take on diversity in the workplace, each essay is a bite-sized bit of humor and wisdom that sheds new light on what motivates people on the job. As useful as they are incisive, these twenty-one ideas should be heard by anyone seeking fresh perspectives on how better to manage themselves and others.

Start Your Day

Start Your Day

Our founder Ron Slee waxes nostalgic and vulnerable in his blog post this week. “Start Your Day” isn’t just a look back over six decades of a career, though, it sings the praises of all of the productive habits and accomplishments you can reach when you are an early riser.

Start Your Day

Over the course of my work life, now spanning sixty years, I have always been an early riser. That still seems strange to me in that one of the things I did to pay my way through university was to play the piano in a bar. I finished typically at 4:00 AM. I was still on the ski hill at 9:00 AM with a group of students. 

 

I started work in this industry in 1969. Pretty soon thereafter I was travelling two weeks a month, sometimes more. Being in my early twenties it never bothered me. I thought it was exciting. It was the time of James Bond and so I ate alone a lot. I always had a book to keep me company. Then I got married and suddenly, I was a nervous flyer and didn’t want to travel. That became significantly more difficult when I became a parent. I didn’t want to leave home at all. That came crushing down on me after Marlene and Caroline had dropped me off at the airport and Caroline asked Marlene if she had done something wrong that I was leaving. That gets you.

 

Travel has been a large part of my life. I have travelled over eight million miles on airplanes. Believe me when I say that is not a badge of honor. To make it more interesting it was all over the world. That means I had to deal with time zones a lot. My doctor collaborated with me in that he had me on a three-step regimen. We started over the counter and escalated from there depending on how many days it had been without sleep. Remember I was teaching two-day classes that typically ran for ten hours and then involved dinner with the students. I can’t tell a lie. I love teaching, I always have.

But in the past few years I have travelled significantly less. But my timetable is still pretty much the same. I wake up between 4:00 AM and 5:00 AM and I am typically sitting at the computer shortly thereafter. You know the routine. Read your email, respond to various issues, and other things that take you away from a normal routine start to your day. 

Then I read an article that changed that routine for me. Since then, things are different here. I have a series of things I must do BEFORE sitting at the computer. The article was by Perri Blumberg, and it definitely got my attention. Her recommendations, as with most things, are very straightforward and tend to be simple things. 

  1. Wear a variation of the same thing every day. Think Steve Jobs. Well, I did that. I had a Brown set of clothing and a grey set. A blazer, pants, neutral shirts, and shoes. I would come home on a Thursday or Friday and unpack and pack. From one color to the other.
  2. Before you get out of bed, set yourself up for a cheerful outlook. Think about everything you are going to accomplish today.
  3. Drink WATER. Hydrate yourself. You have been lying in bed all night and your body has been consuming the water you have stored in your body. It needs a fill-up.
  4. Then I move away from what Perri suggests, block out time for a high impact task. I moved to Nir Eyal, a Behavioral Scientist who teaches at Harvard for guidance. His book titled ‘Indistractable’ changed how I do my work. I have always been a “ToDo” List guy. Now I schedule my day with “Blocks”of time. It reduces the amount of stress in my day. I don’t have to finish something. I allocate specific blocks of time to things and when the alarm goes off signifying that that block of time is finished, I move on to the next time block. Imagine working one way for sixty years and finding a better way for me. I am profoundly grateful to this man.

Habits are hard to break so this morning routine is still a work in process. I do wear a variation of the same clothing now every day. I do lie back and look at the ceiling or the clouds in the sky and think of the good things I will get done. I am having trouble with the water thing. I still want my morning coffee or tea, but I am working on it. The time blocks have made an incredible difference, not just in my work but in my life.

I have given myself permission to think about my life with more focus as I get older. I wish I had started this exercise earlier in my life. Do you spend time thinking about your life? You should.

The Time is Now.

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More, Better, and Creative

More, Better, and Creative

Courtesy of the Water Well Journal, Editor Thad Plumley provides this week’s guest blog post in “More, Better, and Creative.”

I spoke years ago with the manager of a book warehouse whose workforce mostly consisted of temporary employees.

I asked why he didn’t have more full-timers and was told the workers didn’t want it. He had permission to promote several of them but got turned down nearly every time. 

The main reason he pointed out was: “They wouldn’t be able to not come in when they didn’t feel like it.”

Why do I feel like that story doesn’t surprise you like it did me at the time?

I’ve been thinking about that a lot since I read the results of the Associated General Contractors of America (AGC) 2023 workforce survey.

A staggering 85% of respondents reported they have open positions to fill, and 88% said they are having trouble filling at least some of them. Why? Largely because 68% said applicants lack the skills needed to work in construction.

The AGC noted that nearly every community around the country had open construction positions that pay better than the average job and would be vital to that area’s local growth. And yet the jobs remain open.

Why is for an article another day. Today we need to tackle how you can find a workforce to service your customers of tomorrow. 

Three words: More, better, and creative.

Simply put: It is going to take more money. Eight out of ten (81%) of companies answering the survey said they have raised their rates in the last year. You need to do the same. 

Sure, I may not know what you pay, but I feel confident in saying there is a good chance you need to raise your rates. 

After all, know this: You’re not competing with the local water well contractor down the street anymore. You’re competing with the electrician, the plumber, truck driving company, and other blue-collars careers. Yes, I said careers, not jobs. 

It’s also going to take offering a better benefits package. We’re a long way from a couple of weeks of vacation, insurance, and a holiday dinner. Think of benefits as compensation without the wages. They need to truly be of value.

For starters, pay for training and professional development, pay for gym memberships, set up discounts with area businesses, and have a retirement plan. Heck, even free snacks in the breakroom is a nice perk. When employees see all of that grouped with a strong array of insurance programs and competitive pay, your company will start to stand out.

Finally, be creative. Sixty-three respondents of the AGC survey said they revamped their recruiting methods by adding online strategies and digital advertising. That is mission critical. 

Don’t give up on visiting high schools and technical education programs, but you must go where the next workforce is—and it’s online.

There is no doubt the workforce shortage is a problem that isn’t going to be solved overnight. But the start must happen today.

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Who Should Establish Repair Options Pricing?

Who should Establish Repair Options Pricing?

Guest writer Ron Wilson brings us the fourth part of his four-part series on Repair Options offerings with “Who Should Establish Repair Options Pricing?”

This is the fourth in a four-part series relating to Expand Product Support Offerings with Repair Options. 

  1. The first article outlined the overall advantages Repair Options provides the customer and the dealership. 
  2. The second article outlined how Parts Kits used in Repair Options can be a benefit to Parts Department of a dealership. 
  3. The third article outlined the advantages the Service Department benefits from repair options rebuilds. 

This article discusses who should set the pricing utilized in repair options rebuilds. In many cases the Service Department is responsible for setting the rebuild prices for component rebuilds. In some cases, Product Support Sales is responsible for establishing the rebuild pricing, and some dealers have established a Pricing Department outside of rebuild sales team. A third option is to utilize a Pricing Team (could be a department) that does not report to the neither of the Service and Product Support Sales Departments. 

A Pricing Team can provide a skill level that includes: 

  • Technical expertise needed to understand component rebuild process & requirements. 
  • Business systems information needed to conduct data analytics and historical information relating to various component rebuilds. 
  • Marketing expertise to understand the needs of the customer and develop the marketing brochures and information to support the Product Support Sales efforts. 

 

An entire science relating to Value Based Pricing provides tools, knowledge, and expertise to support the combination of historical rebuild information, market-based pricing information, and moves away from an hourly rate philosophy to a value add philosophy. 

An example of some tools that can assist in reviewing and establishing rebuild pricing include:

  • Pricing Ladder 
  • Machine Model Rebuild Opportunity 
  • Competitive Attribute Ranking 
  • Pareto Analysis 

Many other pricing tools available Component Pricing Ladder provides a view of the current market pricing options. Each has its unique advantages/disadvantages. If an analysis shows the Dealer Exchange is above the OEM Reman price there are some opportunities to determine why and adjust as needed. 

The same concept can be utilized comparing competitors pricing, but it is important to understand the competitors rebuild practices. Machine Rebuild Opportunity Model can assist in establishing a priority of which machine/component is most important in the current market. 

Component Rebuild Customer Importance Ranking utilizes the attributes that are important to the customer and evaluates the dealer and other competitors. Corrective action can be taken to address the specific issues. It is not always about price. Price is not listed here but could be included. A Pareto Analysis reviews the breakdown of the engine rebuild process. Comparing the actual to the standard can provide a recap of potential areas of concern. The chart below represents labor hours, this can also be done representing the value of the parts utilized in the rebuilds. 

Component Pricing Ladder

  • 100% OEM New 
  • 65% OEM Reman 
  • 55% Dealer Exchange Dealer 

 

  • 55% Rebuild Level 3 
  • 40% Dealer Rebuild Level 2 
  • 30% Dealer Rebuild Level 1 

The above information shows some of the various tools that can be utilized to evaluate pricing other than just the number of labor hours. Labor hours are important and should be included in the process, but there is more to the story and really goes back to the question. 

Where does the establishing of component pricing belong?

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A Huge Thank You!

A Huge Thank You!

Shifting things to an attitude of gratitude, our Founder Ron Slee offers a huge thank you to all of our contributors for their incredible contributions.

Many years ago, I started writing a Friday Filosophy as a communications tool. It predated our Learning Without Scars LLC startup in Hawaii. I had several different people expressing an interest in contributing their thinking to the mix. 

That got me thinking.

I wondered if I could interest people that I viewed as forward thinking in our industry and have them “pay it forward.” I call them Thought Leaders, Experienced Executives and Revolutionary (Radical) Reformers. 

As a result of a major redesign of our website several years ago we added two categories; Colleagues and Contributors. The Colleagues are the people and businesses that we regularly do business with or are in regular communication. The Contributors were those individuals who were willing to share their wisdom.  

I have been overwhelmed, to be sure, with the quality of people that have stepped forward and the talent that they bring to us. We have some very educated and accomplished people in this group. I am hoping that this collage that we have included here will allow you in one place to see this wonderful group of people.

The Time is Now.