Process Management - Aftermarket
Construction Equipment Distribution magazine is published by the Associated Equipment Distributors, a nonprofit trade association founded in 1919, whose membership is primarily comprised of the leading equipment dealerships and rental companies in the U.S. and Canada. AED membership also includes equipment manufacturers and industry-service firms. CED magazine has been published continuously since 1920. Associated Equipment Distributors
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Process Management

Written By: Ron Slee

Article Date: 06-01-2006
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.

Do your systems and processes support your employees and customers?

Who is checking your systems and processes? An exciting segment of The AED Foundation training is called "sacred cows." It's a tool from the book "Sacred Cows Make Better Burgers." It's a wonderful exercise. Managers are asked to list things in the dealership that have been going on for years but add little if any value to either customer support or operations. You would be amazed at what is revealed.

For example, you don't have enough people. So how does your company calculate the level of staff that is required in the parts department?

I use the standard sales per employee of $600,000 per year per parts employee, excluding parts managers and product support salesmen, unless those functions are involved in processing orders. Many people convert that to $50,000/month. Instead, use a rolling 12-month period that neutralizes weather, seasonality, and holidays. And then go further by putting a floor on it and a ceiling.

If sales per employee are less than $480,000 for three consecutive months, you have too many people. If it's $720,000 for three consecutive months, you have too few people. Too few people is just as serious as too few people.

How do you start? Every day you should be able to:

  • Find every part that is backordered the same day it's ordered
  • Process all orders the same day received
  • Process all received backorder the same day received
  • Put up all stock orders the same day received.
You can't get this done without the correct number of employees.

And then there's process: the parts sales order process. Systems should make the process easy.

Many times a customer is looking for availability and price information. How cumbersome is that process in your parts department. What about your mechanics - do they order their own parts on the system? They should. Is the customer's machine population on the system so that you know how many teeth are on that bucket? Why not?

Plus, why does someone have to check the bin in the warehouse when a customer calls to see if they should come in to get a part? Doesn't the "on-hand" quantity showing on the computer match the reality?

What about invoices - why do you need a paper file copy? And do you use signature pads?

You don't need paper file copies at the dealership any more. How much time would that save parts department personnel? How much money would it save?

Now look at your invoice. Customers tell us they have a hard time understanding invoices. Is your's easy to understand? Is it accurate?

Let's say you operate effectively and your processes are current and efficient, and support good customer service. That means you'll have time to make sales calls to your customers and try to recapture business you've lost to others. That also means you'll be able to make those customer satisfaction calls you don't have time for.

And what about parts delivery to your mechanics in the shop and field, and to your customers wherever they're working?

There is a lot here to evaluate. It's not sexy or sophisticated, but it is fundamental to what you do. Check it out. You might be surprised.

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Article Categories:  Product Support