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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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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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Technician Shortage? Grow Your Own Techs!

Tonight, Learning Without Scars is proud to introduce readers to our new guest writer, Steven Johnson. In his debut post, he writes about a crucial issue we are facing: Technician Shortage? Grow Your Own Techs!

Steven Johnson retired from Associated Equipment Distributors in 2020 as Vice President of Academic Accreditation. While there, he grew the number of AED Accredited college programs to forty, and established AED Recognition of equipment programs for high schools. These include CAT ThinkBIG, John Deere Construction and Forestry and Komatsu ACT technical college programs. A robust online technical assessment and system were also created to measure students’ technical knowledge prior to matriculation and upon graduation. Established in 1919, AED is an international trade association based in Schaumburg, IL, representing over 500 construction equipment distributors, manufacturers and industry-service firms in North America. Established in 1991 and directed by AED members, The AED Foundation addresses
school partnerships, career promotion and research in the industry. This includes AED Foundation Accreditation of college diesel-equipment technology programs. Steve earned his MBA degree from Northern Illinois University. Prior to AED, he was Director of Marketing & Customer Service at I-CAR, a large not-for-profit collision industry training organization. Before ICAR, he was Director of Marketing and Manager, Market Analysis & Planning at Chicago Rawhide, a business unit of AB SKF, a global bearings manufacturer based in Sweden. Steve is currently an independent contractor and advisor to Learning Without Scars.

Technician Shortage? Grow Your Own Techs!

It’s an issue that has challenged the equipment industry for many years. That is, “Where do I find qualified technicians to hire?” Commonly, many employers have approached the problem by luring technicians from their competitors with money and other incentives. While that has worked for some, in many cases, it turns into a vicious cycle of who will pay the next $2.00 per hour more and instability in the local workforce. Sometimes the grass seems greener on the other side, however, I’ve heard of techs who went back to their original employer, even though they were paid less, because of the odious conditions “where the grass seemed greener.”

Dealers have also lured technicians from other industries or hired inexperienced technicians and used on-the-job training to bring them up to speed. That can also cause problems. Absorption rates can fall as experienced techs spend time overseeing the work of the inexperienced. In some cases, that can mean less money for the experienced techs depending on how they are paid. This is a form of growing one’s own techs, but it can take a long time to train these people to the level of an experienced shop or field tech, maybe 6 – 8 years. There are many excellent 2-year technical college programs in equipment technology. These schools allow a dealer to hire someone who can rapidly grow as a working technician. The issue here is that the schools currently do not even come close to supplying the numbers needed by the industry.

Therefore, I return to the topic of “growing your own techs.” I define this as establishing a full program for identifying and educating candidates who have the potential to be solid technicians. Here is what that looks like:

1. Efforts start by dealers working with high school, or even middle school students. That may sound a bit early but consider that today’s technicians must be good in mathematics and science. I heard one involved person say that a pre-engineering type of high school education is the ideal. Students like that often have made initial career decisions early on in high school, or even middle school. Parents often have already discussed their views on careers with their children by then. And parents often are the most important decision- influencers.

This means getting the word out early on the excellent careers in our industry, talking with the students, parents, high school career counselors and other decision influencers. Employers can present at middle school and high school career days, start “diesel” clubs at the schools, provide guest lecturers, host career days at their dealerships, and develop career materials to be handed out at such events. All of this helps, in turn, to change the old all too common misrepresentation of the “grease monkey” to the correct image of “the high-tech professional technician.” And each time a student decides on an equipment tech career, it’s an image success story.

1. Employers should support the students who made a decision to educate themselves in equipment technology. This includes scholarships, loans, helping with tool purchases, summer or work/study employment and mentoring. Finances can be a real barrier to entering the field. We all know that an initial good tool set can run up to $30,000 or more. Not everyone has the money to finance a college education either. Get creative. For example, one way of handling a student loan is for the employer to forgive that loan after three years employment at the dealership.
2. Establish solid relationships with your local high schools and technical colleges. Offer to help with teaching resources and guest lectures on technology. Offer technical training to the instructors. One of the most important things is to serve on the schools’ Advisory Boards. This is a good way to help schools improve in the ways you see are needed. It is vital for forming long-term, positive local and school relationships. By “being there,” you demonstrate your commitment to students and schools. By “being there,” one may also identify promising students to recruit for your dealership, provide assistance, and mentor in the above ways.
3. Support and hire from the technical colleges in both good times and bad times. It leaves kind of a sour taste in one’s mouth if during the bad times, you are nowhere to be seen, and in the good times, you show up asking, “Where are my techs?” Put yourself in their shoes. Even in the bad times, there are ways to support these programs; the last thing you want to see is them no longer in existence.

One final thought here. Shoot for the long term. If you start working with middle school students, it could be eight years before you hire them. From high school, it could be six years. However, one you establish a managed stream of graduating students at each level, you will be controlling your own tech destiny by “growing your own techs.”

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Digital for Data’s Sake

Our new guest writer today is Sara Hanks, sharing her knowledge about going digital for data’s sake. In her own words, Sara introduces herself: My career launched 22 years ago as a mechanical engineer but shifted quickly into continuous improvement when I became a Lean Six Sigma Black Belt. Early on, I learned the value that could be extracted from data and the importance of digitally collecting that data. After several years in manufacturing, I transitioned to leading programs and teams to do Digital Transformation. Eventually, I was promoted to the Senior Director of Data Analytics, leading a team of data scientists, gaining firsthand experience with machine learning and artificial intelligence. Currently, I am the Director of Continuous Improvement at Wabtec Corporation, a supplier in the Rail and Mining Equipment industries.

I enjoy bringing joy into the workforce by solving a problem, creating user friendly digital products, or providing easy access to data. In 2020, I launched Leverage 4 Data to provide a platform to do all three – create a solution to digitize workflows with an intuitive user interface and accessible data.

Digital for Data’s Sake

Digital transformation has been a buzzword that has been talked about for years, yet many people struggle with what it means. Often, when asked about digital transformation, more jargon appears, and we are swimming in a sea of acronyms and terms like CRM, ERP, and Digital Twin. What exactly is a digital twin? I am not going to go into that here, but I will talk about digitization. I like to simplify the concept by talking in terms of the business processes. Digitization is taking an existing business process and transitioning it into the online digital world to drive value. Improving the customer experience or implementing technology to retain younger talent are some of the benefits to digitizing processes. However, my favorite outcome of digitizing a key process is the creation of data. 

Focusing efforts to extract value from the data can be daunting. Here are four examples of how data from a digitization can improve operations, costs and even culture.

Creating KPIs to Measure Performance

Recently, I had a dental procedure done. When I arrived and was checked in, I noticed that the receptionist looked at a paper logbook to verify my name. The same logbook was used to make my next appointment. I was shocked! They lacked a system to track a major part of their business, managing appointments. How could they know who failed to show up or how often people canceled? What about tracking how long the actual appointment took vs. the scheduled time to make sure procedures were planned well. It is difficult to improve what you don’t measure.

The easiest place to measure the effectiveness of a process is with a time-based metric and a quality metric.

1. A time-based metric. Speed is everything – how fast are customer orders being fulfilled, how long does a service event take, what is the cycle time associated with procuring parts? When the process is managed in a digital platform, such as an eCommerce platform, or an ERP, there are time stamps for each event, providing the ability to measure the total time, as well as the time it takes for each step of the process. Creating KPIs for overall process can create a mechanism to add urgency and improve the time.
2. A quality metric. Whenever a time-based metric is introduced, it is important to balance it with a quality metric. I remember when my team introduced a cycle time metric on customer issue management, unfortunately a quality metric was not added. The solutions to the customer issues were delivered quickly but occasionally resulted in rework, and sometimes costly rework. When the data is in a platform, it is possible to calculate the rework or first pass yield of a process. 

Improve Operations with Insights

I’ve seen plenty of operating rhythms that reviewed KPI scorecards. Bringing a scorecard with red on it to the leadership team, was sure to be met with scolding. What I found surprising was how little the leaders asked questions when the KPI was green. Wouldn’t that be insightful? I like to understand why the red exists, as well as the green metrics. This is where dashboards and visualizations can help. Visualizing the operational data in a dashboard is one of the simplest, yet impactful ways to use the data to improve operations. 

My teams have made some amazing analytics dashboards and visualizations. One dashboard built allowed the service teams to visualize the best performing shops against the worst. The user could drill into why product needed service to see which workorders impacted quality. Nobody used it, even though I thought they provided a ton of value. The biggest pitfall was not connecting them to the existing KPIs.

Now when I approach dashboard development, I start with the KPIs. Perhaps they are KPIs created to measure time and quality, or they are something else that is already adopted. With a cross functional team, we brainstorm all the possible data points that could impact that metric. A visualization is built to provide an exploratory experience to drill into the data in a consumable way. I recommend bringing the visualization into the operating rhythms and use the dashboard to answer questions in the meeting. A scolding leader is likely to become intrigued. 

Reduce Stress

Another use of data from a digital system is never talked about but is probably relatable. We’ve all been there. It’s 4:30 on Friday afternoon and you receive a call from a customer or your boss. They are upset about something, and you need to find answers. The panic sets in and you start to put together the story to provide an answer. This usually involves digging through papers, email and perhaps phone calls to colleagues to find information. Data retrieval is difficult. I remember one issue took 19 hours of rummaging through paperwork over a 3-week span to identify which parts were impacted by a quality issue. When the process exists in a digital system, and the critical data is captured, answering the mail becomes much easier. The stress in these situations is reduced, making it much easier to enjoy the weekend. While the ROI is not clear, spending time fighting fires is certainly non-value add. Extinguishing them quickly is a win.

Increase Revenue from the Data

Finally, the operational data collected in your digitized processes is to identify revenue opportunities. For example, the historic services data can be used to predict future service events. Offers could be targeted to those customers to provide those services. The historic service data could be used to cross sell during a maintenance event as well. For equipment that is serviced on a regular basis, are there probable breakdowns between planned events? Additional preventive services or upgrades could be offered at a discount during the maintenance as an alternative to fixing a failure. Could the customer buying patterns identified by the dealers be useful to the OEMs, providing leverage for the dealer? 

Netflix transformed the movie renting experience by making it more convenient, i.e., going digital, but their revenue gains were from using the data to provide binge worthy shows and keep people on their platform. Imagine the possibilities for equipment dealerships.

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