Coaches Corner v.04.06.2023
In Coaches Corner v.04.06.2023, guest writer and Coach Floyd Jerkins writes this week on the topic of Behavioral Sales Metrics for Coaching Equipment Industry Sales Teams.
Every dealership organization is at a different place in time with the diagnosis of their sales teams and processes. The size of complex and level of operational sophistication are factors. Many times, it’s a location issue more than overall company-wide so that requires custom solutions. So, maybe this article is timely and you’re ready to look deeper into how to make real progress in the sales department.
Professional Sales Management and Salespeople
Great salespeople are great salespeople, and in the equipment industry it’s no different than other industries. There are particular aspects unique to every industry due to a product’s life cycle, style of customers and personalities, buying patterns, and market conditions. And the best salespeople know they have to understand these industry specific characteristics to succeed, but there is more. When you learn to sell, you can sell anything. Yea, I know, I know, but it’s true.
Being a professional sales manager or salesperson in the equipment industry isn’t for everyone. There are real superstars doing this work every day and many of them make it look easy. They have a natural and personal approach that gets the job done. Others have tried and failed. Many linger on with average performance. Yet, owners who sell often do not follow the system they expect their salespeople to follow or they have a perceived top producer that no one can touch.
There are typically high and low performers when you have a large sales team. Improving the performance metrics of sales managers and salespeople can be challenging to establish what particular actions need to be taken.
Building a sales team of all superstars is a great plan, but not always realistic or practical. In my experience, sales management and sales teams usually have a mixture of age and talent with varying skill sets and competency levels.
A Sales Managers Rally Cry – To Sell More, Talk to More People
To sell more, talking to more people always seems to be at the top of the list of things to do. Still, if a salesperson talks to a lot of people and prices a lot of people but doesn’t have a good measured closing ratio, it makes me wonder how effective they are and whether they should be allowed to keep talking to your customers. When a sales manager influences the sales team with a whip and chain or talks more about the problems than the solutions, is that the most effective leadership style to use in today’s business climate? I don’t think so.
The traditional metrics for sales success include new and used margins, sales volume, new and used turns, and a mixture of others. To be an excellent asset manager, you must know these metrics and how to positively influence their outcomes.
Performance Metrics Created Before & After the Sale
Like many traditional metrics, margins, turns, and other sales department indicators are created after a unit is sold. The efficiency of your booking and accounting practices determines when the sale appears in a statement. That could be anywhere from one week to sixty days past when the actual sale was made. Once the numbers are current, you can assess what’s going on. If you’ve followed my articles about this, you know where I am headed.
Let me ask a few questions:
- Who do you make more money on, a repeat customer or a customer who has never done business with you or your company before?
- Who do you have the most fun working with, a repeat customer or someone who has never done business with you before?
- Who do you sell in less time, someone you don’t know or a customer who’s bought from you before?
Perhaps you took a few seconds and thought about your answers. I appreciate the effort. Now, consider your answers and what you know and don’t know.
“The goal is to coach performance in the areas that help salespeople become more effective with real-time data. Becoming more effective in sales and marketing your business requires a deep understanding of your customer base so you can focus the sales and marketing team on what matters the most.”
Behavioral Customer Segmentation
The old saying is you can’t improve something unless you measure it. One of the first principles of process improvement is as a process evolves make sure you are measuring the right things.
You probably already know the customer by machine or product sold, sales volume, and parts and service sales, so tracking this kind of customer segmentation can reveal even more real time data. Even a basic CRM system can track these customer categories.
Total Customers
Customer Categories
- New Customer- This customer has never been to, called, or emailed your business before.
- Repeat Customer- This is a customer who has bought from you before. Many companies have “orphan owners.”
- Referral Customer- This is a customer who another customer referred to your business or the salesperson.
- New Business- This customer is someone you meet at the gas station or a social event. A brief conversation in almost any social situation generates new leads.
The sale is the end result of all the activities performed by a salesperson. By coaching performance on these sales activities that happen before and during the sales process, we can naturally increase a salespersons effectiveness.
When you measure these you learn a lot about how your sales mix is made up, how effective sales and front-line people are in each category, and even how well your marketing is doing. It also speeds up the learning curves. If you don’t know these, you are at the end of the sales cycle making decisions. When you are looking at unit sales, you are best guessing how effective your sales and marketing efforts are.
A Behavioral Sales Mix- BSM
Each salesperson should log every Customer Contact interaction each day. To get buy-in, a sales manager communicates with the sales team to create the “rules of logging” they’ll follow. For example, if the salesperson is at the parts counter talking with Joe Customer and he asks how much that used machine is, that should be logged. Each person inputting into the system should understand what the code means when they log it. GIGO- garbage in, garbage out.
Salespeople shouldn’t be allowed to post at their discretion, and that’s part of the rules created in the early stages of implementation. You don’t allow your accounting staff to post credits however they like, nor do you allow technicians not to record their time. Salespeople should be required to a certain standard of recording their day-to-day activities. Its good business.
It’s essential to know how many Closes to Face-to-Face Contacts there are in the same time period. This establishes one of the fundamental Closing Ratios for performance improvement.
By tracking these customer categories and how many face-to-face contacts by salesperson and how many closes by salesperson, you are ready to create a new view of your sales mix. Stay tuned, next month’s article will be on the analysis of these metrics.
Floyd can be reached at fl****@**.com or www.floydjerkinsexecutivecoaching.com.
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The Technician Shortage
The Technician Shortage
Guest writer Jim Dettore addresses a major concern amidst labor shortfalls: the technician shortage.
The construction equipment industry is facing a long-term significant challenge: a shortage of experienced service technicians. The demand for skilled technicians has grown exponentially in recent years as construction equipment becomes more advanced, complex, and specialized. Unfortunately, finding experienced technicians to fill the demand has become increasingly difficult.
The shortage of service technicians is primarily due to two reasons: aging workforce and lack of interest from younger generations. Many service technicians in the industry are close to retirement age, and as they leave the workforce, the demand for their replacements is higher than ever before. The younger generations are showing less interest in technical trades, leading to fewer young people pursuing careers in heavy equipment service.
The lack of experienced service technicians is causing significant challenges for the construction, mining, and gas compression companies as well. Many companies are forced to delay projects due to equipment downtime, leading to costly delays and lost revenue. Additionally, unskilled technicians may not be able to properly diagnose and repair equipment, leading to further equipment issues down the line.
The importance of ongoing training for service technicians cannot be overstated. As construction equipment becomes more advanced and complex, ongoing training is essential to stay up to date with the latest technologies, repair methods, and safety protocols. Training programs provide technicians with the skills and knowledge they need to diagnose and repair equipment effectively and efficiently.
Teaching service technicians the fundamental skills of proper parts inspection have several advantages. Parts salvage or replacement decisions made with knowledgeable confidence will benefit the dealership in several ways. The current parts supply chain shortage requires better, well-informed decisions to be made, instead of simply replacing a part that might fix the problem, especially if the machine sits idle while waiting for the new backordered part (that may not fix the problem) to arrive. It also has a significant effect on reducing troubleshooting times, and equipment downtime. Service rework and unnecessary callouts are also reduced. All of which results in improved customer satisfaction, customer loyalty, repeat business, and improved warranty recovery.
Construction equipment dealerships must take proactive measures to attract and retain skilled technicians. One way to do this is to offer competitive compensation packages that include benefits such as healthcare, retirement plans, and paid time off. Additionally, companies should provide ongoing high quality, effective training opportunities to their technicians to ensure they stay current on the latest technologies and repair methods. The ongoing training combined with excellent communication help newer technicians feel appreciated and cared about. Constant communication, continuing education in their respective fields, and recognition of achievements help today’s younger workforce feel appreciated and invested in, thus helping improving employee retention.
In conclusion, the service technician shortage in the heavy equipment industry is a significant challenge that must be addressed. Ongoing training is essential to ensuring that technicians have the skills and knowledge they need to diagnose and repair equipment effectively and efficiently. Heavy equipment dealerships must take proactive measures to attract and retain skilled technicians to prevent costly delays and lost revenue due to equipment downtime.
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Why is calculating Absorption Rate so important for Equipment dealers?
Why is calculating Absorption Rate so important for Equipment dealers?
Guest writer Tom Montgomery writes about absorption rates as a measurement tool in this week’s blog post, “Why is calculating Absorption Rate so important for Equipment dealers?”
Absorption Rate Calculation has been a measurement tool used by equipment dealers since the 1960’s. It is still a valuable measurement today.
In my work with equipment dealers all over the world I have found that the dealers that I consider to be on “the leading edge” measure their absorption rate every month.
This measurement tool is driven by the senior management of the dealership – it is not to be taken lightly. When senior management finds that the rate falls below their standards they immediate action to improve it.
Absorption Rate Calculation – here is the definition!
It is the percentage of dealership expenses absorbed by the gross profit generated from Parts and Service sales.
Sounds easy doesn’t it!?
Not so fast!
Dealer’s accounting methods vary greatly.
One example is the way the cost of goods sold is calculated in the Parts department. There are some dealers that include the cost of freight in the cost of goods sold to determine gross profit in the Parts department.
Is this the correct method? Many dealer principals insist on including all costs associated with running a Parts department. I believe it is the dealer’s choice. Most importantly, the dealer should be consistent in their measurements.
Another accounting variance among dealers is the calculation of Service gross profit. There are dealers that include all “benefits costs” in the calculation of cost of goods sold.
Again, if that is the choice made by the dealership then remain consistent every month.
Other dealers chose to account for this as an expense. What is the correct method?
The answer to that is found in another question.
What is the dealer trying to measure by calculating absorption rate?
The answer is, “Will the gross profit coming for the Parts and Service departments pay the expenses for the dealership”?
Some dealers might ask, “Are there any expenses that should be excluded in the calculation or is it all dealer expenses?”
Great question!
How should “interest expense” and “allocated expense” and “administration expenses” be treated”?
The dealer must be certain that interest, allocated and administration expenses are reasonable, controllable, and justifiable?
What does that mean?
Interest rate should be associated with accounts receivable and accounts payable (but exclude interest on mortgages).
Allocated and administration expenses should not exceed 10% of sales.
So, what is the target for Absorption Rates?
Is it 80%, 90% or 100%?
The answer is 100%!
Why 100%?
The dealers should want all expenses to be “absorbed” by the Parts and Service departments.
What advantage does the dealership gain if absorption rates are at 100% or greater?
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OEM vs. Dealer Brand Identity: Are you frustrating your customers?
OEM vs. Dealer Brand Identity: Are you frustrating your customers?
Guest writer Roy Lapa continues his blog series focused upon Brand Identity with “OEM vs. Dealer Brand Identity: Are you frustrating your customers?
As a follow-up to my original post, “Brand Identity = Measurable Customer Behaviours,“ I would like to quickly highlight a problem that could affect both dealers and original equipment manufacturers (OEMs). We work hard to make our brands stand out to our customers, and the more a dealer and an OEM can work together, the better. Although some archetypes are more inclined to work well together, every organization is different and typically embodies one dominant archetype along with components of several others. While various archetypes may clash, they can also function in complementary ways.
The goal is to make sure that the customer knows that the OEM-Dealer brand identity stands for: consistent, predictable, and measurable behaviour.
If the OEM and dealer archetypes frequently contradict, the brand goal of consistent predictable behaviors may be more difficult to achieve. Depending on the circumstances and environment, the 12 Jungian archetypes can interplay in a variety of ways. However, the following combinations demonstrate both potential matches and mismatches.
Matching examples
The Sage and the Explorer complement one another nicely since they both value wisdom and knowledge. While the Explorer seeks knowledge through firsthand experience, the Sage seeks understanding through research and reflection. They can strengthen each other’s weaknesses and widen their customer engagement by working together.
The Caregiver and the Innocent, also complement each other effectively since they both value nurture, compassion, and empathy. The Innocent conveys a sense of clarity and optimism, whereas the Caregiver offers support and guidance for customers. They may foster a safe atmosphere for one another and for customers by working together.
Mismatched examples
The Ruler vs. the Rebel: The Ruler archetype is concerned with upholding order and control, whereas the Rebel archetype is all about breaking the rules and defying control. Because the Ruler wants to maintain the status quo and the Rebel wants to change it, these two archetypes might easily collide.
The Sage vs. the Innocent: The Sage is concerned with truth, wisdom, and understanding, while the Innocent is focused on simplicity, knowledge, and optimism. Because the Innocent is pleased with the world as it is and the Sage is constantly looking to learn more and understand the nuances of life, these two archetypes may clash.
Without insinuating any relationship pros or cons, the below are some example OEM and corresponding Dealer brand identities. Advantages arise when the dealer and OEM give their best effort to make sure that their most important customer-focused behaviours are complimentary. The examples are based on simple online research and are only meant to be used for conversational purposes.
Key takeaways:
Note:
All brands, dealer names, and original equipment manufacturer (OEM) references are owned by the respective OEM entities or their affiliates. These terms are used by Active Focus Point for reference purposes only and are not intended to indicate affiliation with or approval by the entity.
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Friday Filosophy v.04.07.2023
Friday Filosophy v.04.07.2023
For Friday Filosophy v.04.07.2023, our Founder, Ron Slee, shares quotes and words of wisdom from Nelson Mandela.
Nelson Mandela, in full Nelson Rolihlahla Mandela, byname Madiba, (born July 18, 1918, Mvezo, South Africa—died December 5, 2013, Johannesburg), Black nationalist and the first Black president of South Africa (1994–99). His negotiations in the early 1990s with South African Pres. F.W. de Klerk helped end the country’s apartheid system of racial segregation and ushered in a peaceful transition to majority rule. Mandela and de Klerk were jointly awarded the Nobel Prize for Peace in 1993 for their efforts.
Nelson Mandela was the son of Chief Henry Mandela of the Madiba clan of the Xhosa-speaking Tembu people. After his father’s death, young Nelson was raised by Jongintaba, the regent of the Tembu. Nelson renounced his claim to the chieftainship to become a lawyer. He attended South African Native College (later the University of Fort Hare) and studied law at the University of the Witwatersrand; he later passed the qualification exam to become a lawyer. In 1944 he joined the African National Congress (ANC), a Black-liberation group, and became a leader of its Youth League. That same year he met and married Evelyn Ntoko Mase. Mandela subsequently held other ANC leadership positions, through which he helped revitalize the organization and oppose the apartheid policies of the ruling National Party.
In 1952 in Johannesburg, with fellow ANC leader Oliver Tambo, Mandela established South Africa’s first Black law practice, specializing in cases resulting from the post-1948 apartheid legislation. Also, that year, Mandela played an important role in launching a campaign of defiance against South Africa’s pass laws, which required nonwhites to carry documents (known as passes, pass books, or reference books) authorizing their presence in areas that the government deemed “restricted” (i.e., generally reserved for the white population). He traveled throughout the country as part of the campaign, trying to build support for nonviolent means of protest against the discriminatory laws. In 1955 he was involved in drafting the Freedom Charter, a document calling for nonracial social democracy in South Africa.
Mandela’s antiapartheid activism made him a frequent target of the authorities. Starting in 1952, he was intermittently banned (severely restricted in travel, association, and speech). In December 1956 he was arrested with more than one hundred other people on charges of treason that were designed to harass antiapartheid activists. Mandela went on trial that same year and eventually was acquitted in 1961. During the extended court proceedings, he divorced his first wife and married Nomzamo Winifred Madikizela (Winnie Madikizela-Mandela).
After the massacre of unarmed Black South Africans by police forces at Sharpeville in 1960 and the subsequent banning of the ANC, Mandela abandoned his nonviolent stance and began advocating acts of sabotage against the South African regime. He went underground (during which time he became known as the Black Pimpernel for his ability to evade capture) and was one of the founders of Umkhonto we Sizwe (“Spear of the Nation”), the military wing of the ANC. In 1962 he went to Algeria for training in guerrilla warfare and sabotage, returning to South Africa later that year. On August 5, shortly after his return, Mandela was arrested at a road block in Natal; he was subsequently sentenced to five years in prison.
In October 1963 the imprisoned Mandela and several other men were tried for sabotage, treason, and violent conspiracy in the infamous Rivonia Trial, named after a fashionable suburb of Johannesburg where raiding police had discovered quantities of arms and equipment at the headquarters of the underground Umkhonto we Sizwe. Mandela’s speech from the dock, in which he admitted the truth of some of the charges made against him, was a classic defense of liberty and defiance of tyranny. (His speech garnered international attention and acclaim and was published later that year as I Am Prepared to Die.) On June 12, 1964, he was sentenced to life imprisonment, narrowly escaping the death penalty.
From 1964 to 1982 Mandela was incarcerated at Robben Island Prison, off Cape Town. He was subsequently kept at the maximum-security Pollsmoor Prison until 1988, when, after being treated for tuberculosis, he was transferred to Victor Verster Prison near Paarl. The South African government periodically made conditional offers of freedom to Mandela, most notably in 1976, on the condition that he recognize the newly independent—and highly controversial—status of the Transkei Bantustan and agree to reside there. An offer made in 1985 required that he renounce the use of violence. Mandela refused both offers, the second on the premise that only free men were able to engage in such negotiations and, as a prisoner, he was not a free man.
Throughout his incarceration, Mandela retained wide support among South Africa’s Black population, and his imprisonment became a cause célèbre among the international community that condemned apartheid. As South Africa’s political situation deteriorated after 1983, and particularly after 1988, he was engaged by ministers of Pres. P.W. Botha’s government in exploratory negotiations; he met with Botha’s successor, de Klerk, in December 1989.
On February 11, 1990, the South African government under President de Klerk released Mandela from prison. Shortly after his release, Mandela was chosen deputy president of the ANC; he became president of the party in July 1991. Mandela led the ANC in negotiations with de Klerk to end apartheid and bring about a peaceful transition to nonracial democracy in South Africa.
In April 1994 the Mandela-led ANC won South Africa’s first elections by universal suffrage, and on May 10 Mandela was sworn in as president of the country’s first multiethnic government. He established in 1995 the Truth and Reconciliation Commission (TRC), which investigated human rights violations under apartheid, and he introduced housing, education, and economic development initiatives designed to improve the living standards of the country’s Black population. In 1996 he oversaw the enactment of a new democratic constitution. Mandela resigned his post with the ANC in December 1997, transferring leadership of the party to his designated successor, Thabo Mbeki. Mandela and Madikizela-Mandela had divorced in 1996, and in 1998 Mandela married Graca Machel, the widow of Samora Machel, the former Mozambican president and leader of Frelimo.
Mandela did not seek a second term as South African president and was succeeded by Mbeki in 1999. After leaving office Mandela retired from active politics but maintained a strong international presence as an advocate of peace, reconciliation, and social justice, often through the work of the Nelson Mandela Foundation, established in 1999. He was a founding member of the Elders, a group of international leaders established in 2007 for the promotion of conflict resolution and problem solving throughout the world. In 2008 Mandela was feted with several celebrations in South Africa, Great Britain, and other countries in honor of his 90th birthday.
Mandela Day, observed on Mandela’s birthday, was created to honor his legacy by promoting community service around the world. It was first observed on July 18, 2009, and was sponsored primarily by the Nelson Mandela Foundation and the 46664 initiative (the foundation’s HIV/AIDS global awareness and prevention campaign); later that year the United Nations declared that the day would be observed annually as Nelson Mandela International Day.
The Time is Now.
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Coaches Corner v.04.06.2023
Coaches Corner v.04.06.2023
In Coaches Corner v.04.06.2023, guest writer and Coach Floyd Jerkins writes this week on the topic of Behavioral Sales Metrics for Coaching Equipment Industry Sales Teams.
Every dealership organization is at a different place in time with the diagnosis of their sales teams and processes. The size of complex and level of operational sophistication are factors. Many times, it’s a location issue more than overall company-wide so that requires custom solutions. So, maybe this article is timely and you’re ready to look deeper into how to make real progress in the sales department.
Professional Sales Management and Salespeople
Great salespeople are great salespeople, and in the equipment industry it’s no different than other industries. There are particular aspects unique to every industry due to a product’s life cycle, style of customers and personalities, buying patterns, and market conditions. And the best salespeople know they have to understand these industry specific characteristics to succeed, but there is more. When you learn to sell, you can sell anything. Yea, I know, I know, but it’s true.
Being a professional sales manager or salesperson in the equipment industry isn’t for everyone. There are real superstars doing this work every day and many of them make it look easy. They have a natural and personal approach that gets the job done. Others have tried and failed. Many linger on with average performance. Yet, owners who sell often do not follow the system they expect their salespeople to follow or they have a perceived top producer that no one can touch.
There are typically high and low performers when you have a large sales team. Improving the performance metrics of sales managers and salespeople can be challenging to establish what particular actions need to be taken.
Building a sales team of all superstars is a great plan, but not always realistic or practical. In my experience, sales management and sales teams usually have a mixture of age and talent with varying skill sets and competency levels.
A Sales Managers Rally Cry – To Sell More, Talk to More People
To sell more, talking to more people always seems to be at the top of the list of things to do. Still, if a salesperson talks to a lot of people and prices a lot of people but doesn’t have a good measured closing ratio, it makes me wonder how effective they are and whether they should be allowed to keep talking to your customers. When a sales manager influences the sales team with a whip and chain or talks more about the problems than the solutions, is that the most effective leadership style to use in today’s business climate? I don’t think so.
The traditional metrics for sales success include new and used margins, sales volume, new and used turns, and a mixture of others. To be an excellent asset manager, you must know these metrics and how to positively influence their outcomes.
Performance Metrics Created Before & After the Sale
Like many traditional metrics, margins, turns, and other sales department indicators are created after a unit is sold. The efficiency of your booking and accounting practices determines when the sale appears in a statement. That could be anywhere from one week to sixty days past when the actual sale was made. Once the numbers are current, you can assess what’s going on. If you’ve followed my articles about this, you know where I am headed.
Let me ask a few questions:
Perhaps you took a few seconds and thought about your answers. I appreciate the effort. Now, consider your answers and what you know and don’t know.
“The goal is to coach performance in the areas that help salespeople become more effective with real-time data. Becoming more effective in sales and marketing your business requires a deep understanding of your customer base so you can focus the sales and marketing team on what matters the most.”
Behavioral Customer Segmentation
The old saying is you can’t improve something unless you measure it. One of the first principles of process improvement is as a process evolves make sure you are measuring the right things.
You probably already know the customer by machine or product sold, sales volume, and parts and service sales, so tracking this kind of customer segmentation can reveal even more real time data. Even a basic CRM system can track these customer categories.
Total Customers
Customer Categories
The sale is the end result of all the activities performed by a salesperson. By coaching performance on these sales activities that happen before and during the sales process, we can naturally increase a salespersons effectiveness.
When you measure these you learn a lot about how your sales mix is made up, how effective sales and front-line people are in each category, and even how well your marketing is doing. It also speeds up the learning curves. If you don’t know these, you are at the end of the sales cycle making decisions. When you are looking at unit sales, you are best guessing how effective your sales and marketing efforts are.
A Behavioral Sales Mix- BSM
Each salesperson should log every Customer Contact interaction each day. To get buy-in, a sales manager communicates with the sales team to create the “rules of logging” they’ll follow. For example, if the salesperson is at the parts counter talking with Joe Customer and he asks how much that used machine is, that should be logged. Each person inputting into the system should understand what the code means when they log it. GIGO- garbage in, garbage out.
Salespeople shouldn’t be allowed to post at their discretion, and that’s part of the rules created in the early stages of implementation. You don’t allow your accounting staff to post credits however they like, nor do you allow technicians not to record their time. Salespeople should be required to a certain standard of recording their day-to-day activities. Its good business.
It’s essential to know how many Closes to Face-to-Face Contacts there are in the same time period. This establishes one of the fundamental Closing Ratios for performance improvement.
By tracking these customer categories and how many face-to-face contacts by salesperson and how many closes by salesperson, you are ready to create a new view of your sales mix. Stay tuned, next month’s article will be on the analysis of these metrics.
Floyd can be reached at fl****@**.com or www.floydjerkinsexecutivecoaching.com.
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For our course lists, please click here.
Mastering Nonconforming Material Management for a Leaner, Meaner Business
Mastering Nonconforming Material Management for a Leaner, Meaner Business
Guest writer Sara Hanks offers practical tips on mastering nonconforming material management for a leader, meaner (but nicely!) business.
It is great to be back with another blog post. While the title might suggest that I’m advocating for a “meaner” business, I’m not encouraging cutthroat tactics. Instead, let’s explore how to master nonconforming material management and make your operation leaner and more efficient.
As an operations or quality leader, improving the nonconforming material management process is essential to reduce waste, enhance efficiency, and prevent recurring defects. We’ll delve into three practical steps to accomplish these goals and showcase an example from my personal work experience. Managing the nonconforming material process in a timely manner will avoid costly consequences.
Segregate and review defective parts daily.
Start with establishing a visible area to segregate the defective parts, as this will prevent the defective parts from being used in production or in your service center. Review the parts in the segregated area on a regular basis. Daily reviews are ideal to keep the parts top of mind.
While I was the quality engineer of an electric motor manufacturing company, there was an issue where a part failed due to an electrical issue during the final test. The motor was set aside to make room for production. A day or so later, another similar issue occurred, and a day or so after that an electrical issue occurred with a component that went into the motor. Eventually, we discovered the root cause of the issue – the wire that made the electrical parts that went into the motor had a defect. The defect could pass several tests and go undetected; piles of parts have accumulated. If we reviewed the issue regularly, the root cause would have been discovered sooner, saving a lot of rework costs.
Define ownership and measure cycle time.
There are four major steps to a nonconforming material management process: identify/segregate, disposition the fix, execute the disposition, and verify the completion. Each phase needs an owner. In the execution phase, different teams own the step based on the disposition. For example, scrapped parts or parts that need to be returned to the supplier are managed by materials, whereas parts that require rework should be managed by operations.
Once it is clear who owns which step, measure each step of the process. If the process is managed in an IT system, there are date stamps recorded as parts move through the process. These can be used to create the measurement system. Set goals for each step. If you are not sure what goal to set, try a 10% improvement over an established baseline, which can be determined by measuring the data for 8-12 weeks.
With the electric motor issue, the lack of ownership of each step extended the time to resolve the issue. The purchasing team was responsible to send the motor out to be torn down, however, the parts did not ship for several weeks after the root cause was identified because they weren’t held accountable. The accumulated defective parts sat in inventory – remember these are nearly finished goods, not supplied parts, so the inventory impact was significant. Additionally, the customer order was finite. We left the repairs to the last minute and used overtime to ship the parts on time. Measuring the process by the owner would have prevented the unnecessary cost.
Implement a Continuous Improvement Framework
My favorite continuous improvement framework is the DMAIC process, or Define, Measure, Analyze, Improve, and Control. However, when it comes to continuous improvement for everyone in the organization, the DMAIC process may be too challenging to learn and adopt. A simpler, more accessible framework is the Plan-Do-Check-Act or PDCA framework. Here is a brief overview of the PDCA cycle:
Encourage everyone to participate in PDCA projects. Create a reward system to promote engagement. Rewards can be simple, such as recognition during an all-company meeting, or celebrating with a small party. Company swag is good, especially if employees can wear it during work hours. Buying a jacket or a hat for completing a project is extremely low cost compared to the savings of the project. This approach helps in addressing the root cause of defective parts, which will impact the cost of quality over time.
In the electric motor example, we did identify a corrective action project to prevent a recurrence. In the wire manufacturing process, a preventive maintenance schedule was created to replace components likely to wear on a regular basis. The small cost of changing a roller is minute compared to the larger expense of reworking the finished product. I cannot remember if we celebrated with a pizza party or not, but in hindsight, if we didn’t, we should have!
Take inspiration from my electric motor example, where timely root cause analysis could have saved money and contained the issue. Don’t let nonconforming materials pile up and obscure underlying problems. Instead, tackle them head-on with proactive measures that involve the ENTIRE team. By doing so, you can avoid missed deliveries due to quality issues and foster a culture of continuous improvement.
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Leadership
Leadership
This week, our guest writer Christopher Kiely writes about the ways in which Leadership can become more effective when it comes to people.
$366 billion dollars. If you spent $366 billion dollars on training only to obtain negligible to non-existent results you might start thinking you were wasting money, or at least most people would. Not corporations though. In 2019 an article by Chris Westfall for Forbes magazine¹ put the yearly global Leadership training expenditures at $366 Billion, yep Billion with a B. You can use your Doctor Evil voice, it is appropriate. $166 billion of that is apparently spent in the USA alone. The article goes on to claim most of that training does not work and then cites another article from Chief Learning Officer Business Intelligence Board² that says 94% of corporations “plan to increase or maintain their current investment in leadership development.” Wow!
Let’s recap, $366 Billion spent, mostly on ineffective training, but the vast majority of corporations plan to continue spending on the ineffective training. This is a condemnation of leadership training in and of itself. Who has the gumption to point out the emperor has no clothes (a leadership trait BTW) when it comes to leadership training? Apparently, almost none of the people that had $366 billion spent on them.
If you Google “effective leadership” you will be presented with lists upon lists of “characteristics” and “qualities”, those seem to be the two prevalent terms used, some lists will be 6, some 10, others 12. There seems to be variation in how many qualities are required. Just as there is variation in what those qualities are, but a few do stand out. Listening, empathy and being “authentic” come up a lot. Not sure how you train those things to adults and apparently after billions spent neither do leadership trainers.
I have been in the communication courses where we learned what designated colour or shape everyone was and how their colour or shape changes how we communicate with them, I was a blue square, for what that is worth. I have taken the course where we all learned each other’s Meyers-Briggs personalities and how to effectively work and lead different personality types. I have taken part in different forms of empathy training and team building initiatives. None of them changed anything, the next day we all went back to being ourselves and doing as we do… which is what people do, because it is what people want. They want to be themselves, warts and all.
If you Google “define leadership” you get “the action of leading a group of people or an organization”. A not infrequent case where a form of the word being defined (i.e., leading) is being used to define the word (i.e., leadership). A leader leads. Ahhh… got it, thanks for that Google.
What even is a leader? How does one become someone that takes part in the “action of leading a group”? Most people are simply designated leaders. Paying big bucks for some MBA or other C-suite qualifying degree from some fancy business school makes you a “leader” apparently, then you move up the leadership ladder chosen not by those you will lead but those that designate you to be the leader. Seems dubious to me.
Some people are leaders, and some are not and most of what is learned about the basics of leadership characteristics is learned young. Most the “characteristics and qualities” used to define effective leadership are developed during youth or they are not developed or even developable at all. If billions down the drain with little to no positive results proves anything it is that training adults to be leaders doesn’t really work. Sure, you can perhaps blame some bad training, or cliche training programs with more sizzle than steak and even a leadership development industry that is more about personal branding and making money than developing leaders. There are plenty of all three.
But a follow up article³ to the initial Forbes article was written by Kevin Kruse a year later, in it he gives 6 reasons for why the money was wasted. He begins to get to the heart of the matter with “Reason #2: Training Too Late”. If you are seeing the need to train adults how to “listen” have “empathy” and be “genuine” (i.e., don’t only think and listen to yourself and try not to be a phoney). It seems to me you don’t have a training problem as much as you have a narcissist problem. Leadership training is full of these sorts of nuggets. Harvard Business School online⁴ adds “Integrity and Accountability” with “…’high moral standards’ as the most important leadership competency.” I’m not sure “morals” are a “competency”. If you are planning to train morals into a bunch of 30-something C-suiters, good luck to you.
What has happened to create a corporate culture where hating one’s boss is common, where the phrase “people don’t quit their job, they quit their boss” becomes cliché? When it is already becoming difficult to attract young talent can we really persist with known issues of decades past? There needs to be a fundamental shift in the notion of corporate leadership. You may begin to notice I like the “fundamental” changes; we’re swinging for the fences over here folks, I need to make it worth the price of the ticket for you.
That same Harvard Business School online post that talked about needing morals had “Ability to Influence Others” as the number one characteristic of being an effective leader, stating:
“…influence is “the ability to produce effects on other people’s behavior.” Influencing others requires building a strong sense of trust with your colleagues. “This means [you] need to understand the types of resources people value when it comes to achieving safety and self-esteem,” says Harvard Business School Professor Julie Battilana.”
Uhm??? Not tell Harvard what-is-what, but that is kind of messed up. Leaders should not be seeking to “produce effects” on their employee’s behaviors by manipulating their “safety or self-esteem”, that is Machiavellian nonsense. Do we wonder why we have a narcissist problem? Do we really wonder why people hate their boss if this is what the elite schools are telling the C-Suiters? Enough with the designated top-down “leaders” and the billions wasted trying to turn adults in to caring empathizers with morals that then apparently will seek to “produce effects” on people’s behaviors by manipulating their self-esteem. What a colossal mess this whole corporate “leadership” notion has become.
I played a lot of youth sports when I was young. You know youth, when you learn empathy and morals. The best most effective team I ever played on was barely coached, it had no top-down leadership at all. We had a head coach that was always busy and a few dads that supervised us. We lost one game in two years of competitive rep-football. That team was successful because even at 12-15 years of age it had strong natural leaders, no billions needed. And they mentored a culture of caring and accountability. Where each and everyone of us knew the other had their back and would perform at the expected level and if we didn’t, we would call each other out on it, but only in the huddle and only ever that once. And if you needed help blocking the giant from the other team, you got it. All that leadership pre-Harvard business school. Wow, almost like you don’t teach that stuff…
I have spent 20 years now training various corporation’s employees all over the world. If you have been a mechanic’s trainer you know a lot of venting goes on in training sessions, perhaps this is unique to mechanics, but I don’t think so. When people are removed from their daily work environment they tend to talk, probably where the slang “talking out of class/shop” came from. They say as a trainer you learn more from the class than they do from you, it is often true. I have learned most people do indeed hate some of their bosses (there are layers) and often for good reason. I have learned some people are leaders and some are not, and some are active (in the moment) leaders, the doers, and some are passive (after the fact) leaders, the listeners. The main lesson on leadership I learned is that it is naturally occurring in almost all groups, a lesson I originally learned on the football field when I was 12.
What most corporations fail to do is recognize, legitimize and foster it and you don’t really do that by designating anyone “the leader” or by bringing in “leaders” with big degrees from outside the group, unless you have some serious problems with current group dynamics. You foster internal groups with a sense of accountability and caring that have people that are the natural leaders of the group acting as mentors, not designated top-down authorities. If done right, you are selecting the people the group wants in those positions, no authority is required. No one needs to be “in-charge” and these types of working groups if structured right will often self-regulate to ensure no one considers themselves such. If the quarterback of a football team suddenly starts thinking he is the main man-in-charge, the offensive line quickly reminds him otherwise. If the people who are natural leaders lack the business acumen or skills to be entirely successful in the designated rolls than corporations should be training those competencies and skills, not trying to train “listening, empathy and morals” to the tune of $366 billion a year, that is a lot of college MBA degrees.
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Service Department Efficiency Gains through Repair Options
Service Department Efficiency Gains through Repair Options
Guest writer Ron Wilson continues his series with “Service Department Efficiency Gains Through Repair Options.”
Four-part series relating to Repair Options offerings:
This is the third in a four-part series relating to Expand Product Support Offerings with Repair Options.
The first article outlined the overall advantages Repair Options provides the customer and the dealership. The second article outlined how Parts Kits used in Repair Options can be a benefit to Parts Department of a dealership.
The Service Department can benefit from the utilization of Repair Options due mostly to efficiency gains in labor hours utilized in building a component. The hours utilized in building a component include:
Based on the list above the key element is to reduce the number of labor hours relating to non-wrench time, while providing a quality rebuild within a specific timeframe. Pauses during the rebuild process adds to inefficiencies, delays in completing the rebuild timely, and can contribute to quality issues.
Repair options addresses several of the above items by providing:
As can be seen using repair options can streamline the overall rebuild process. The customer pre-approved the level of rebuild, Parts Department has the parts kits delivered to the shop bay, and the technician focuses on the rebuild.
This is a Win-Win for the customer, the Parts and Service Departments, and for the overall dealership.
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Friday Filosophy v.03.31.2023
Friday Filosophy v.03.31.2023
For Friday Filosophy v.03.31.2023, our Founder, Ron Slee, shares quotes from comedian George Carlin.
George Denis Patrick Carlin (May 12, 1937 – June 22, 2008) was an American comedian, actor, author, and social critic. Regarded as one of the most important and influential stand-up comedians of all time, he was dubbed “the dean of counterculture comedians”. He was known for his black comedy and reflections on politics, the English language, psychology, religion, and taboo subjects. His “seven dirty words” routine was central to the 1978 United States Supreme Court case F.C.C. v. Pacifica Foundation, in which a 5–4 decision affirmed the government’s power to censor indecent material on public airwaves.
Carlin said that he picked up an appreciation for the effective use of the English language from his mother, though they had a difficult relationship and he often ran away from home. He grew up on West 121st Street in the Morningside Heights neighborhood of Manhattan, which he and his friends called “White Harlem” because it “sounded a lot tougher than its real name”.
Carlin joined the U.S. Air Force and trained as a radar technician. He was stationed at Barksdale Air Force Base in Bossier City, Louisiana, and began working as a disc jockey at radio station KJOE in nearby Shreveport. Labeled an “unproductive airman” by his superiors, he received a general discharge on July 29, 1957. During his time in the Air Force, he had been court-martialed three times and received many nonjudicial punishments and reprimands.
Over time, Carlin changed his routines and his appearance; he grew his hair long, sported a beard and earrings, and typically dressed in T-shirts and blue jeans. He lost some TV bookings by dressing strangely for a comedian at a time when clean-cut, well-dressed comedians were the norm.
In this period, Carlin perfected his well-known “seven dirty words” routine, which most notably appears on Class Clown. The Supreme Court upheld the FCC action by a vote of 5 to 4, ruling that the routine was “indecent but not obscene” and that the FCC had authority to prohibit such broadcasts during hours when children were likely to be among the audience. The controversy increased Carlin’s fame. George Carlin was arrested seven times for reciting the “Seven Dirty Words” routine.
Carlin was honored at the 1997 Aspen Comedy Festival with a retrospective, George Carlin: 40 Years of Comedy, hosted by Jon Stewart. His first hardcover book, Brain Droppings (1997), sold nearly 900,000 copies and spent 40 weeks on the New York Times best-seller list.
In 2001, Carlin was given a Lifetime Achievement Award at the 15th Annual American Comedy Awards.
Carlin had a history of heart problems spanning three decades. This included heart attacks in 1978, 1982, and 1991; an arrhythmia requiring an ablation procedure in 2003; a significant episode of heart failure in 2005; and two angioplasties on undisclosed dates.[ On June 22, 2008, at the age of 71, he died of heart failure at Saint John’s Health Center in Santa Monica, California. His death occurred one week after his last performance at The Orleans Hotel and Casino. In accordance with his wishes, his body was cremated and his ashes were scattered in front of various New York City nightclubs and over Spofford Lake in New Hampshire, where he had attended summer camp as an adolescent.
The Time is Now.
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College of Western Idaho Press Release
College of Western Idaho Press Release
College of Western Idaho Press Release: College of Western Idaho Is Now a Center of Excellence for Online Delivery of Learning Without Scars’ Online Dealer Management Programs.
HONOLULU, March 21, 2023 – Learning Without Scars (LWS) is pleased to announce the establishment of its first Center of Excellence (COE) at the College of Western Idaho (CWI). As a COE, the College will deliver Learning Without Scars’ online dealer management educational programs in parts, service, sales and marketing through both its academic and workforce development channels.
Offering premier programs and degrees that make a difference, CWI, a fully accredited public college, remains a top choice for higher education in the Treasure Valley. Empowering the community one student at a time, CWI moves fearlessly forward paving the way to bold new futures with flexible options, exceptional tuition value, and support every step of the way.
Students soon will be able to earn up to seven academic credit hours by completing up to fourteen LWS elective classes in conjunction with the two-year Heavy Equipment Technician Program at the college. Mr. Alex Beal, Assistant Dean, School of Industry, Engineering & Trades at CWI, Nampa, ID, Micron Education Center stated, “Working with industry has greatly enhanced what we can offer as training and development for our partners and communities. Learning Without Scars establishes and important link between education and workforce development. We are honored to be named a Learning Without Scars Center of Excellence.”
Through the workforce development channel at CWI, students soon will have the opportunity to take their selection of thirty-six classes in each parts management, service management, and sales & marketing management. Professional certification in these disciplines will be available.
The fundamental purpose of Learning Without Scars is to present meaningful and relevant professional educational theories and methods in an understandable manner. Our students take away ideas that have the potential to impact productivity, market penetration, and profitability in dealerships. We pride ourselves in being able to transfer knowledge to our students without them having to get the “scars” of mistakes along the way. Learning Without Scars is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.