The Trouble with Technology - Product Support Round Table
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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SECTION: Product Support Round Table

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Contact Kim Phelan at (800) 388-0650 ext. 340.

The Trouble with Technology

By Mary Sedor and Kim Phelan

Article Date: 08-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.

Machine sophistication poses serious challenges for dealer product support departments. This and many other subjects were addressed during the AED Product Support Round Table.

New technology on equipment, while it offers enhanced features and many benefits for the dealer and end user alike, is wreaking havoc for product support. So say participants from AED’s annual Product Support Round Table, which convened in May.While manufacturers are finding they have to hold more training for their newest products, dealers are finding the advanced technology poses great complications and stumbling blocks for the technician trying to diagnose problems and submit warranty claims. Finding a tech to work on the machine is still a perennial problem, and one for which members of the Round Table offered a variety of solutions. AED’s Product Support Round Table is a focus group comprised of senior executives – both manufacturers and dealers – of major construction equipment lines. The group is charged with the task of analyzing, developing perspectives, and providing recommendations for AED on key issues and trends affecting the distribution channel. Following are some excerpts and summaries from the Round Table dialog; quotes are not attributed to individuals in order to preserve and encourage candor and freedom of expression throughout the meeting.Technology Trouble and Changes
When it comes to technology, the advancements are definitely welcomed with open arms. However, when it comes to actually diagnosing and trouble shooting the equipment, dealers are having a heck of a time locating the problem. Dealers said:
  • “A lot of the diagnostic time is directly related to electronics.”
  • "There are software programs to help troubleshoot, and the machines have onboard diagnostics but they can’t factor in everything. They may take care of 80 percent of the problems but there’s that 20 percent that tears you up."
  • “We’re rethinking how we buy service trucks. There’s no sense in having booms and welders when they spend time fixing wiring and changing sensors.” 
  • “The technology is requiring us to look at office support – [these days] you can’t just take a field service call. You have to go online and check Komtrax, pull the information out, have training on electronics then dispatch them. And the guys working as PSSRs have to know how to read the dashboard in the new machine.”
  • “Because of the electronic engines and other electronics build into the product, a number of shade tree technicians and moms and pops out there have been dwindling because they don’t have the expertise. If they have it, they don’t have the capital to invest in the tools required to do troubleshooting. It’s hard to stay up to date, but it has presented an advantage and opportunity for the dealership. We have a situation where we have the technical ability in our service folks that others can’t provide.”
Manufacturers said:
  • “One of reasons you saw cars evolve to the technology that they are today is because the automobile industry couldn’t get the technicians, they couldn’t train these kids fast enough on how to work on electronics. They were getting eaten alive with diagnostics and time, so out came fault codes and the kid plugged the machine into the computer and the fault code said change the alternator. I think that’s the kind of thing we’re working toward because it ties into the availability of technicians. And it’s one of the things we have to do because it will eliminate those eight hours of trying to find that bad wire that we can isolate with a fault code, which will at least send the trained technician to the right area.” 
  • “Another big thing that’s coming into the industry – and I saw everyone’s display at CONEXPO – is the telematics, the onboard diagnostic systems the service manager can do from his office, Cat, Komatsu, Volvo – a lot of them use QUALCOMM so that’s something that’s going to help us aid in cutting down that diagnostic time. We are trying, as manufactures to reduce that time wasted because that’s the kind of money that doesn’t go back to help any of us; it comes out of the dealer profit, which weakens our dealership, makes it expensive for the manufacturer because you want me to cover it and I really shouldn’t, and the customer isn’t going to eat it, so it’s money that gets lost. That’s the stuff we really have to focus on.” 
  • One manufacturer indicates that while new product training can range from one day to three depending on whether it’s a new feature or a completely new model, the real diagnostic challenge for dealers has occurred in the transition to Tier 3 and 4 engines. “They can’t take it from the fault code to the next step. It’s not that we haven’t trained the dealers; it’s that we haven’t trained our people to that level. We’re redoing that one, and the lesson out of it is, as we get ready for Tier 4, to take a completely different view in order to not get ourselves caught in what we did here.”
Flat Rates
While flat rate can save technicians time in the service department, some dealers say there are other factors hindering their use of flat rates, including technological advancements in equipment that make it difficult for technicians to diagnose the equipment, and reimbursement for warranty work.
One dealer established a steering committee to target the high opportunity machines and high opportunity repair items, defining the scope of work within the categories and then creating a repair bill of materials, parts, and defined labor hours for various activities. Another dealership has tried unsuccessfully to build flat rates.
And another dealer said he has customized flat rates based on customer needs. “If you have a customer who wants a full engine rebuild, we customize the flat rate based on the customer. Block time is where we’re selling a block of hours – the customer says he needs a technician for the next 30 days; ok, it’s X number of dollars, at the efficiency we want. That’s a flat rate. It gets away from the bickering over each individual work order. We’ve also focused on doing flat rate for the sales and rental departments. We can standardize those, attachments installs and those kinds of things. It takes away the arguing that goes on internally between sales and service.”
Warranty and Flat Rates
Submitting warranty claims, specifically when it comes to flat rates, is an issue for dealers. Manufacturers say they are open to changing their ways.
Dealers addressed the frustration of having predefined hours that the manufacturer will pay but that in some cases they’ve successfully negotiated additional warranty coverage. One dealer employs a specialist who files for every hour spent. Another added that it’s better to have an administrative person to facilitate reporting, because techs aren’t expected to be English majors.
Consistent notes from techs on every job paint a more thorough picture for both customers and at the factory, and has helped a dealer build a database of work involved in various repairs in order to begin establishing a flat rate system. One dealer recommends that OEMs begin collecting data from all their dealer warranty claims and create more realistic, contemporary time ranges for different repairs.
One manufacturer agreed that use of averages is indeed fair and enables the factory to demonstrate that at least half of a dealer’s peers have performed work in a certain amount of time. Other manufacturers commented that the set warranty rates typically do not account for efficiency variances between apprentice versus veteran skilled techs, nor do standard factory warranty times take such things as breaks or travel allowance into consideration. “I’m not suggesting that it’s fair,” said one, “[but] that’s the way it is, and as long as that’s competitive, it may not change.”
Another manufacturer reminded the group that OEMs have the added layer of their own suppliers to contend with, who may or may not pay for parts that have failed. Additional Discussion Points
  • On the subject of extended warranties/maintenance contracts it was evident that dealers are shifting from fixing what’s broken, to managing the assets. While acknowledging that they can’t compete with $20 or $30 oil change trucks, the demand for maintenance contracts is rising and customers are expecting dealers to shoulder more risk, such as providing loaner machines when theirs are down – risk, dealers said, that needs to be managed. One dealer finds it’s more profitable and valuable to the customer to provide 1,000- and 2,000-hour service intervals, and sells parts and oil to the customer to perform their own 250- and 500-hour maintenance.
  • When it comes to employing product support sales reps (PSSRs) dealers and manufacturers are on the same page, asserting the importance of this role in fostering customer growth and raising satisfaction levels, and even more so during a downturn. One dealer requires PSSRs to make regular CRM database entries, which facilitate rapid follow-up on customer complaints. “They are the eyes and ears on the product support side,” said one dealer, who employs 16 PSSRs.
  • For the most part, as the group discussed the issue of customers completing warranty work dealers say if their customers want to do it, it’s ok by them. Manufacturers agreed.
  • On the technician shortage front the group says the key to finding more technicians is to look in the right locations, and to enhance the image of the technician, which is still widely perceived as a dirty job. Aligning with an AED accredited or recognized technical school is, said one dealer, a key strategy for mining new techs. The group affirmed that technicians won’t generally leave their geographic area, so local recruiting is effective. Manufacturers play supporting roles to both colleges and their dealers; one hired a consultant to help evaluate the problem for its distributors.
  • Tapping into the pool of technical talent coming back from Iraq and Afghanistan is another successful approach. “They are looking for jobs,” said a manufacturer. “They are trained, responsible and very well disciplined; they make excellent employees.”

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