By Paul MacDonald, Expert Service Program
Efficiency is the (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without waste. — Wikipedia
- Increased efficiency can mean more calls, and increased calls can mean more revenue.
- More revenue, on top of the fixed costs of a service department, can result in increased profits.
- Increasing first call completes through greater efficiency is not easy, but it is essential to making your service operation profitable.
A service business purchases man-hours from technicians for the purpose of solving a customer’s problems. Whether in warranty or not, the goal is to accomplish this by repairing a household of a malfunctioning appliance. In doing so, efficiency is defined by our ability to charge for as many of those purchased man-hours as is possible.
Similarly, service efficiency can be defined as the number of service calls we complete in one trip to the customer’s home. Referred to as first call completes, or FCC, the more FCC per day, the more man-hours can be charged to customers and manufacturers in hopes of increased profits.
A concerted focus on increasing FCC is paramount to delivering profits. The more billable hours we achieve, the greater the ability to spread department overhead costs over those hours, thus lowering the hourly cost to run the business and increasing profits per call. Increasing FCC through greater efficiency is often overlooked, as the rewards are not obvious and often elusive.
Consider this example: A service company with four technicians performing four FCC out of eight service calls each day at an average of $80 per call generates $307,200 in revenue annual. If each technician completed just one more call per day, they would generate $384,000, or an additional $80,000 in revenue to help pay the overhead. This is significant, as the cost of doing business (CODB) remains the same since we are selling a repair service and not products.
While the financial impact on business is significant, completing one additional FCC per technician is not an easy task. Indeed, increasing efficiency to improve FCC is often overlooked, as the rewards are not obvious and often elusive. Increasing FCC also requires a team effort from all service department staff.
FCC are impacted by many influences in the day-to-day operations of business. These include dispatching techniques; technology for field technicians; correct inventory, parts ordering and supply; pre-diagnosing calls; technician skill sets; industry resources; and specialized tools. Let us take a closer look at some of these factors.
Dispatching Techniques: You may think it’s obvious to schedule calls in a geographic chronological order that prevents the technician from back tracking, but this is not always a priority as time commitments to customers often overrule. In multiple technician companies, repair skill sets often trump geographic or time commitments. Rush hour traffic can impact the efficiency of a route as well. Regardless of these hurdles, the dispatching of a technician has enormous impact on FCC; give dispatching/routing the respect and resources it demands to limit a technician’s non-billable drive time each day.
Technology in the Field: Smartphones and laptops have come a long way and have dropped significantly in price. A smartphone will capture a product’s correct model and serial number every time and document any pre-existing damage of the workspace. Computers in the field provide instant access to service manuals, diagrams, parts availability, and customer history, giving technicians the much-needed ability to be more efficient on every call.
Parts Inventory: Having the right part at the right time is no accident, and yet so critical to increasing FCC. Repair parts must be monitored, managed and inventoried based on usage and availability. Parts inventory is the second biggest influencer on FFC and efficiency. Give repair parts inventory the respect it demands. Failure to stay on top of parts inventory can cost you dearly in outdated stock.
Pre-diagnosing Service Calls: This is the single largest factor when it comes to FCC and can make or break service profits. Unfortunately, most companies overlook this crucial step. Every service call should be pre-screened as many as three times before a service truck is permitted to roll. First by the customer service rep, to get the model, serial number, descriptive complaint, and correct customer address. Second by the service manager, to assure the legitimacy of the call, the required skill set, and the tools and parts required to enable completion on the first trip. Lastly, the technician himself must screen the call by calling the customer to confirm availability and details of the reported complaint. Only he can accept responsibility for the best use of his time, and paying him on commission will encourage him to execute this vital step toward being the most efficient he can be.
Training, Tools and Resources: Last but far from least is to equip technicians with the specialized tools necessary to complete specific jobs, and prepare them with regularly updated skills training. Ensure field access to the vast resources available today via the Internet and Intranet to help technicians solve appliance repair problems.
Appliance repair is not easy, but then if it was, customers wouldn’t need our services.
BrandSource service consultant Paul MacDonald ran his own 38-tech service business and is a past president of the UASA. He currently operates the Expert Service Program, which helps servicers run their operations more efficiently and profitably. You can reach Paul at (647) 500-7785 or Paul.M.MacDonald@gmail.com.