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Making A Service Department Work

Making A Service Department Work

By Diane Calabrese/ Published February 2024

Service Department stock image

Choose one. A) Technology has made equipment maintenance so easy that in 10 years there will be no need for industrial machinery mechanics, machinery maintenance personnel, or millwrights, or B) the preceding statement is a fantasy.

Fantasy wins. The U.S. Bureau of Labor Statistics projects as much as 13 percent growth in the number of individuals who will be employed in the maintenance categories. What does it mean?

It means opportunity. That is an opportunity for equipment dealers with service departments that work.

As with all facets of business, what’s taking place today builds the foundation for tomorrow. Service departments that work are guided by principles that will allow them to keep pace with both changes in equipment and need.

So, what’s the one component a service center must have to be successful? “I can’t name one component, but I can name one word: flexibility,” says Rick Benham, president of Kepner Equipment Inc./Chaffee-Ward Equipment in Canandaigua, NY.

The flexibility extends in all directions. “A good service department must be flexible in their ability to service all brands and types of cleaning machines, cultivate flexibility in the ability to do the work in their own shop or at the customer’s site, and employ flexible mechanical talent so that any technician can do the job of another at any given time,” explains Benham.

A sound framework, one that establishes parameters, makes flexibility possible. Benham ensures that the framework is always strong.

“I’m sure many people have many ways of monitoring how their service department is performing, but I tend to keep it simple by analyzing our P&L [profit and loss] statement and leading a weekly service meeting to see what ideas our techs have and what tools are needed to be a better service department,” explains Benham.

Indeed, with regular monitoring it’s possible to take account of the three essential components of a service department. The components are the personnel, tools, and logistics.

Service department team members may have streamlining ideas, ranging from how to make better use of space to how to better queue and distribute the equipment requiring routine maintenance or repairs. Gains in efficiency will ultimately appear in a profit statement because more can be done in less time, which means more service can be offered to customers.

Regular meetings with service center team members also enable an owner to make an informal assessment of how well each person is keeping up with new developments and maintaining a good pace. Efficiency is not synonymous with speed, but working exceedingly slowly does not in itself guarantee good results.

Balance is required in every part of a business, and that includes the service center.

CONTROLS

The U.S. Army is just one entity that has a lot of equipment to maintain. Naturally, military personnel have given a great deal of thought to how to improve maintenance. Equipment operators are trained not only in the use of machines but also in monitoring how they function.

Performance observation, as it is sometimes called, is a foundation of the Army’s maintenance program. An operator is expected to recognize and report any deviations from standard performance. In doing so, he or she ensures that equipment gets the attention it requires before it malfunctions or degrades— possibly to a catastrophic failure.

In our industry equipment owners who can be persuaded to engage in performance observation will realize the full longevity built into their equipment. Manufacturers and distributors want equipment buyers to be organized and disciplined about routine maintenance and to plan for such maintenance.

The desire of manufacturers and distributors mirrors what they expect of themselves: attention to the details.

Organization, discipline, and planning are inextricably linked when making a service center work, says Dennis Black, president of McHenry Pressure Cleaning Systems Inc. in Frederick, MD. It would be difficult to narrow to just one.

“Organization—whether it is one person or ten—you must have organization in your everyday plan,” explains Black. “Controlled chaos does not always work.”

The organization has to include workflow. “A service department must have work scheduled and accounted for so anyone can track the status of a work order,” explains Black.

“Discipline,” says Black, “must be in play. Make sure the work gets completed and remain disciplined to stay on your business plan.”

And there has to be a plan. “A plan for your service department must be completed and adhered to,” says Black.

“We started our service department 30 years ago with the mindset of supporting the equipment we sell,” explains Black. “We learned that we also must make it a profit center that can stand on its own.”

In making and keeping the plan current, Black and his team assess what’s possible in the context of what’s profitable. “We have established what we can and can’t do for customers, which includes or limits what we can service and who our real customer is.”

There are many ways to periodically appraise the function of a service department, and Black shares some of the approaches he uses.

“We look at profitability,” says Black. “We have established minimum labor totals per month—base amount. Once the base amount is reached, we offer bonuses on overages.”

In addition to encouraging an optimal tempo of work, Black also keeps track of what customers are thinking. “We attempt to gauge overall satisfaction of our customers by asking them about their experience,” he says.

Another sort of feedback loop of information also helps indicate how customers perceive their experience. “Most of our commercial customers will tell you with their dollars,” says Black. “They will simply stop dealing with you if you don’t provide them the service they need.”

POSSIBILITIES

Consider the boost to profit that may be obtained by the decision to not be exclusive. “As I think about our industry, I would probably ask about the issue of whether to only work on the brands you sell or to work on all brands. If you decide to service all, do you charge a premium for equipment you do not sell?” says Jim O’Connell, CEO of Pacific Bay Equipment Sales and Service in Modesto, CA.

“For us we work on everything related to water, from water softeners to air compressors,” explains O’Connell. “We do charge different amounts for the different brands and types of systems.”

But the focus is on the customer always. “Our goal as a business is to be the one-stop shop for our customers, so our motto becomes, ‘We will fix anything we can get parts for,’” says O’Connell.

The physical, human, and logistical components of a service center are never easy to separate when evaluating results. For instance, a team member who finds the environment of the center too warm or too cold may not be able to function in his or her best capacity.

Distractions, too, can slow things down in a service center. Should a team member be listening to music while working? That and other questions must be weighed periodically when profits are tallied.

To assess a service center operation, O’Connell says he generally looks at two areas. “Number one is the amount of labor billed per day per tech, and number two is the percentage of callbacks or return visits.”

Communication among team members is also tight. “We have weekly service meetings to discuss any issues as well as to discuss current projects and problems associated with service repairs that came up so we can keep the team focused,” explains O’Connell.

There is follow-up with customers, says O’Connell. “We make sure they are satisfied with our service, or if not, what do we need to do to correct the issue?”

Strategies for keeping service centers strong and readying them for what comes next may vary a little from place to place. But there are some essential elements to all successful approaches. “First and foremost among the essentials is having trained and competent service technicians,” says O’Connell. “Second is to have an adequate supply of repair parts, and third is software to help with scheduling and routing.”

Clarity enhances operations in every way. “The goal for the service techs has to be clear and concise; whether it is labor or parts, they need to know what is expected of them as far as sales are concerned,” says O’Connell.

Getting it right the first time is the overarching goal. “On the customer side we strive to have the parts and knowledge to solve the problem and repair the equipment on the first call, as well as having zero callbacks because of our errors or lack of parts,” says O’Connell.

Ongoing training for team members is imperative, says O’Connell. So, too, is attending to all the functions that support the service center, such as vehicle maintenance and inventory.

“Be sure your outside service vehicles are large enough to carry all the parts and equipment, as well as reliable and well-kept to further promote your professionalism and efficiency,” says O’Connell. Have the correct and functioning tools that are upgraded and replaced as needed.

Prepare for the present and future.

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