Last week we talked about the Equipment Parts Store – EPS. These stores were going to be modeled after the NAPA stores. They would have a pleasant instore merchandising area, a customer meet and greet area, a self-service kiosk for customers to surf the internet and place orders, a small warehouse area with fast moving common parts, a hose making operation, a small clothing and accessories area, and area with safety and environmental (green) products, everything to make a convenient and pleasant shopping experience available for the customer. The locations would be selected strategically so that they were in a good location relative to customer offices, shops and jobs.
Further in the parts business we should begin a hardware supply item service to the customers with a delivery box truck and an employee who is a sales trainee. Many of the dealers across the country use these services themselves. I find this quite astounding as in the parts department most of these items are already carried in inventory. The parts department should be in this business themselves. If an outside company can perform this function economically I don’t understand how the dealer is unable to do the same.
Then there are self-serve kiosks for select items in mini malls and other significant spots. These can be controlled by your business system and issue parts and supplies to a customer account or credit card. Have you seen these types of kiosks? They are a wonderful addition to the self-serve world we are in today.
Finally there is the option of putting inventory right on a job site. Have a mobile parts store in a 20’ container with the facility to serve a specific job. Staff it with skilled personnel and serve the customers. That would make a difference. This is about a partnership between customers and dealers that is intended to help the customer make money on their jobs while becoming more significant in the eyes of the customer in their business.
This is part of the Service-Dominant marketing we talked about in our most recent Marketing Missile. The time is now.
Service Statements v1.2
As you look into the market capture rates for an equipment dealership in the labor market you have to consider a wide array of items. First and foremost the various types of labor that needs to be performed on construction equipment; maintenance labor, minor repair labor, replacement of wear parts or broken parts, adjustments and tune ups, and major repair and warranty labor. Each of these labor types requires a different skill set to be performed properly. Replacement of wear parts or broken lights or batteries doesn’t require a skilled journeyman to do the work. Similarly scheduled maintenance doesn’t need a “repair” journeyman either. This is where the equipment dealership has gone astray.
The equipment dealer typically has one labor rate for all of the various repair categories – one rate that covers repairs and maintenance and replacement of wear parts. That is why many customers have their own mechanics. The replacement of a tip or cutting edge requires strength not technical skills and can be done by an individual with a considerably lower labor cost than the dealer labor rate. This is also true for maintenance work. Why has the equipment dealer stuck with this one labor rate, what I call peanut butter rate, when all signs point to a loss of the low skilled labor?
I submit to you it is because the equipment dealer service managers choose to operate with all journeymen qualified technicians. This makes their life easier in a whole range of ways but that is not the purpose of the job. You need to match the skills of the technician to the needs of the job. That will allow the dealership to position their services relative to the market prices more successfully.
The only reason that the customer has their own mechanics is that the dealer has either been too expensive or not responsive enough to meet the customer needs. . The time is now.
Parts Ponderings v1.2
Last week we talked about the Equipment Parts Store – EPS. These stores were going to be modeled after the NAPA stores. They would have a pleasant instore merchandising area, a customer meet and greet area, a self-service kiosk for customers to surf the internet and place orders, a small warehouse area with fast moving common parts, a hose making operation, a small clothing and accessories area, and area with safety and environmental (green) products, everything to make a convenient and pleasant shopping experience available for the customer. The locations would be selected strategically so that they were in a good location relative to customer offices, shops and jobs.
Further in the parts business we should begin a hardware supply item service to the customers with a delivery box truck and an employee who is a sales trainee. Many of the dealers across the country use these services themselves. I find this quite astounding as in the parts department most of these items are already carried in inventory. The parts department should be in this business themselves. If an outside company can perform this function economically I don’t understand how the dealer is unable to do the same.
Then there are self-serve kiosks for select items in mini malls and other significant spots. These can be controlled by your business system and issue parts and supplies to a customer account or credit card. Have you seen these types of kiosks? They are a wonderful addition to the self-serve world we are in today.
Finally there is the option of putting inventory right on a job site. Have a mobile parts store in a 20’ container with the facility to serve a specific job. Staff it with skilled personnel and serve the customers. That would make a difference. This is about a partnership between customers and dealers that is intended to help the customer make money on their jobs while becoming more significant in the eyes of the customer in their business.
This is part of the Service-Dominant marketing we talked about in our most recent Marketing Missile. The time is now.
Marketing Missiles v1.1
Last year I was introduced to a book on marketing “The Service-Dominant Logic of Marketing” by a friend in Asia. This book is a compilation of a series of papers in academia on marketing both from a historical perspective and currently. This evolution has gone from marketing commodities to now we are in the age of marketing services and relationship are prominent as is quality. This should be right up the alley of thinking operations people.
Marketing is not some flashy sales process ort advertisement. It is not a spiffy campaign. It is about the development and maintenance of relationships in the supply chain and with the ultimate customers.
Those of us in the Product Support arena live this every day. We are trying to satisfy customers. Or delight depending on your mood. This is about the magic of the duties that our “heroes” perform every day – the people with whom the customer interacts. This is the drudge of the day to day operation. It is not sexy and at times it is hard to stay motivated. But it is akin to being married for three or four decades. You now know what love is on a very personal level. The parts and service operational personnel have to perform each and every day – with a smile in their voice and on their face and sometimes having serious difficulties; the backlog of your service work or the backorder of a critical part.
That is what Service-Dominant Marketing is all about. We will explore this together in more detail in missiles to come. The time is now.
Friday Filosophy #20
When men speak of the future, the gods laugh.
Chinese proverb
Borrow money from pessimists. They don’t expect it back.
Steven Wright
The world is but a canvas to the imagination.
Henry David Thoreau
Management Musing v1.1
As everyone knows management is about getting things done through other people. Similarly most know that you can’t manage people, you manage process but you must lead people.
In leadership you start by creating followers in your groups. Then you help develop leaders. Most people have leadership skills. They are parents, involved with school groups or church groups, coach sports teams or lead scouts or girl guides. There is a lot of talent available. People are not problems needing solutions they all have talent in hiding that needs to be found and developed.
You won’t get anywhere without respecting other people.
In project management there are a couple of old fashioned truths. The first is “I can bully you to accept a deadline but I can’t force you to meet it.” Second there is a lot of “publish the innocent and protect the guilty.” I would prefer that we use more of the “if it works it is yours – good work, if it fails it is mine.”
People need to trust management. People put their lives in the hands of their managers. They depend on them for their personal development, their income and their security. How do you stand up in face of this challenge? Management is a wonderful opportunity to make a difference in the lives of other people. It is a serious responsibility to be taken very seriously. Your Company, your employees and your families depend on it. The time is now.
Service Statements v1.1
So having the complaint cause correction troika to deal with we must move to what the customer wants and needs a quotation. Last week we talked about the inspection programs necessary to determine what needs to be done to put a machine in proper working condition. We have obtained the complaint from the customer and determined the cause from the inspection. So on we go to a quotation. The customer wants to know how much it is going to cost before giving you any approval to go ahead with the repairs.
To create a quotation we first must “segment” the work that needs to be done. The segmentation approach needs to follow the structure of the job coding that you use in your business. The job code must address the component on which the work is to be done, the operation that is necessary to affect the repair and the sequence code which follows the steps to do the work. Have you got these job codes, (if you don’t then refer to the coding structure that is used by your supplier for warranty reimbursement)? That is a good starting point.
You will have the standard objections from your technicians. That time is no good. If that is the case in your dealership have the technicians involved in what the factors should be to apply to those times for your use. Once the system has been in use for a time then the times will be based on your actual work.
So we have job codes and standard job times. Now you can create a quotation for the customer. If there is work that the customer turns down, leave the details on the work order so that there is a record for you that you found a problem but the customer chose not to act on it. The quotation will be approved by the customer and then you can put the job into the job queue. The time is now.
Parts Ponderings v1.1
The parts business has become a rather predictable and unexciting business hasn’t it? If you go into a major metropolitan area anywhere in the world and visit the equipment dealerships you will find a sameness that is rather boring.
How can we break this mold? Well I think we need to ask the employees and the customer what they think as everyone of you knows. What they ask for we should deliver.
However, let’s tell down the walls of the box and look to the convenience issue for customer in dealing with you. Typically they have stopped coming into the dealership. They use the phone. Why is that?
I think along with the convenience to them of not having to fight the traffic from their job to the dealer we have taught them that there is nothing to gain by coming into the store. They don’t get any better service do they? In fact we will leave a counter person to answer the phone. So we treat the customer who came to our store to a lower level of service. We don’t have an exciting waiting area or instore merchandise nicely laid out for them to browse through while they wait.
Altho0ugh it might be radical to many of you I think we should open parts stores. Let’s call them the EPS here (Equipment Parts Store). Choose a location that is central to the customer machine population. Or close to the job sites, perhaps even on the job site. Perhaps have an employee on the customer job site itself. Let’s take the store to the market directly. Who was it that ordained that the only parts store we have is in the main dealership building? Why don’t we have a whole series of stores all around the territory? After all the bearing houses do that. The hose and fittings suppliers do that. The hardware and supplies suppliers even take their product right to the customer shops and technicians. Who told is that we couldn’t have more stores? Perhaps it is just stale thinking or maybe it is not thinking at all. Let’s start being more of a convenience to our marketplace and to the customers within it. The time is now.
Friday Filosophy #19
The most precious possession that ever comes to a man in this world is a woman’s heart.
Unknown
Experience is something you don’t get until just after you need it.
Unknown
When you think about it, what other choice us there but to hope?
Lance Armstrong
Marketing Missiles v1.0
I wonder how many people understand marketing in the Product Support world; what is that? Is it advertising or sales campaigns? What is it? Well my hope is that through this blog we can have more people think about the marketing of parts and service.
I will start with a definition of marketing as “the selling of products or services – the business activity of presenting services in such a way as to make them desirable.” In the case of parts and service I question the word desirable don’t you? But it is basically the sales of products or services.
I will pursue the basics of marketing – the 4 P’s. The “market” coverage subject as it relates to Product Support Salesmen and all that entails. I will address market share which is the ultimate measure of success in the marketing world. We will discuss customer retention and how we can influence that in our operating world. In other words this blog is intended to cover everything and anything about marketing parts and service. I hope you will join me on this voyage. The time is now.
Management Musings v1.0
In our new approach to the blogosphere we will be posting tidbits on a weekly basis on management. We are calling this management musings.
In the current labor market we have recent college graduates that are having an extremely hard time finding a job to get their career started. We also have companies that are bemoaning the fact that the younger generations are not the same as their generation. The work ethic is different, expectations are different, and the focus is different. I couldn’t disagree more. The current generations are every bit is motivated and ambitious as we were. The difference that I see most prominently is that they are better rounded, more curious, and less tolerant of nonsense than we were.
Today’s management is much more about “Freedom and Responsibility” than is about “Command and Control.” The new generations are not going to be as obedient as we were and I say “good for them.” Just issuing edicts and expecting to be blindly followed is not going to work.
“Today’s good managers give their employees the right context in which to make decisions – then employees make them” From “How Will You Measure Your Life” by Clayton Christenden. We have a new world today and we as management need to change our posture and outlook. The battleground for the next several decades, if not as far as the eye can see, is going to be for the talented younger work force. This new workforce, the Gen F, is a talented group of young men and women looking for a manner in which they can feel that they have a worthwhile life and a work on a worthwhile career in which they can make a contribution. The time is now.