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Building in the costs
All of you are aware that the balance of 1st time fix and van stock is an extremely hard subject.Whilst those of us who do a majority of one brand have a chance of a decent 1st time completion rate (within that product group), as we all expand to multibrand the sums do not add up.The subject of no percentage mark up, on the spares bought for the work, provides no margins to encourage warehouse/van stocking on such a large range of manufacturers.
So where do we go and how can each individual business ensure that their geographical appliances are catered for?This industry now operates on fixed labour returns, which traditionally went alongside parts at cost plus a mark up. Now the trend is turning and with the advent of new players into the field of Work Provider we could well see an increase in the work being offered to us at NO mark up on spares. This is explained by the principal of the work provider supplying those spares to the agents involved, whilst in turn offering a fixed cabinet repair to their client. The profit for the provider comes from the successful procurement of spares, the distrubution and administration of spares, work and customer satisfaction,which ultimately is the key to the whole venture.We as an industry have an enormous effect on the last item. If the customer is complaining it is about our service as we are the focal point and the sole reason the appliance is not repaired. All the excuses in the world about the supply of spares, the poor service we
receive will not win that customer over as one you may count on in the future.
Therefore we should be correctly paid for our service which in turn allows us to invest in our own stock levels, our own infrastructures and procedures at call handling level, our staff and their training (office or engineering). In short, we have to invest to ensure that our workforce keeps pace with the times and that our services, when bought, are 1st class and backed up by Management structures that can offer on going support to all involved.I would propose, for the considered opinion of you all out there, that an added £3.00 per call should cover the lack of a mark up on spares and be included in the fixed labour repair charge.
I have not forgotten that we also need a profit margin, this is not about profit, this is all about ensuring you can invest into Stock levels to increase your efficiency and improve your service.Ted 8)
Re: THE FUTURE????????
ted wrote:I would propose, for the considered opinion of you all out there, that an added £3.00 per call should cover the lack of a mark up on spares and be included in the fixed labour repair charge.
That sounds ABOUT right, with the addition of 60 days credit on spares accounts either directly for manufacturers concerned or negotiated on behalf of any WP to allow any WIP to be completed before the spares are due to be paid for.
ted wrote:Ted 8)
Ted, the summer is over, remove the shades, and may I suggest a warmer hat as well. 😆
Dave.
ted wrote:All of you are aware that the balance of 1st time fix and van stock is an extremely hard subject.Whilst those of us who do a majority of one brand have a chance of a decent 1st time completion rate (within that product group), as we all expand to multibrand the sums do not add up.
This is exactly the point I’ve been trying to get across for years and a debate in itself!
When you are in a position that you describe doing single brand life is easier (note I didn’t say easy 😉 ) than doing multi brand as, quite simply, your chances of a first time fix is far, far higher than on multi brand. Indeed the same extends to niche products and brands as well as you simply will not carry stock to enable a first time fix.
The nitty gritty of this is that, in my own business, if we do not achieve a first time fix on one call it costs us the profit on three calls! You simply have to build that into your costs.
Again, with stockholding, stock costs money to get then it lies on the shelf and with the high model turarounds these days and model changes even within a production year it can become worthless very quickly indeed. You have to ask yourself if you can afford to lose that money as, in the end from past experience, we all know full well that in many cases it will have to be written off. Additionally it costs money to move stock, people forget that! You may well need an employee or employees simply to handle it, it needs unpacked, checked, labelled, allocated, systems updated and then it has to get to the engineer that needs it, that all costs time and money to do at any commercial level.
I could go on, but I won’t I’ll simply say that there are a lot of costs that repairers and work providers do not take account of in many contracts that they should and maybe this thread will provoke some thought.
K.
If on the other hand the manufacturers/wps supplied parts FOC together with a decent up front stock of useable spares, it would allow the smaller companies to free up monies tied down with van stock. At the same time giving us a better first time fix rate. At the moment we seem to be fixing stuff from such a diverse range of manufacturers/own brand groups that the first time hit is just crap.
Bonzaco has a good point there, this is especially true of the smaller WP’s who cater for the more obscure brands around these days. I tend to try and suss the job out before even making an appointment, then order part(s) in advance. It increases the first time hit, it isn’t always accurate, but experienced engineers can narrow most faults down to at the most a couple of parts required. I know this isn’t easy for the guys who are on the road and rely on less experienced staff to handle call booking, but it’s one direction we can all look at to increase our profit by achieving a much higher first time completion rate.
Some WP’s may disagree with this practice, but from experience a lot of customers are quite happy with this, especially those who are at work, mainly as it means they will only need to be there for one appointment rather than two. It saves them money as well !!
And hey! If they want us to carry out double visits for 50{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of the calls they pass us, then revue the rates, try double faxing/emailing 50{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of every call you handle. (But then some will try and tell you they already do 😉 )
Dave.
Quite so bonzaco that would, in a great many cases, help us in getting our job done tremendously as I almost refuse to invest in stock now as it simply becomes dead money sitting on a shelf more often than not and I have over £10K’s worth to prove the point as well! I may as well have thrown my money down the drain and it’s a mistake I fully intend not to repeat if at all possible.
You may have noticed too that whilst the spares prices for many have risen to ridiculous levels for some machines the stockholding in the UK has also gone down, if there even is stocks held in the UK these days. At times I feel as if the burden of stockholding and, by default, the cost of it as well has been shunted onto us *and* we have to pay silly money for a lot of it. Servis being a prime example, I mean they’re having a laugh with a motor that costs more than a new appliance, modules that cost more than half the price of a new machine. Problem is, many customers, insurers etc. seem to think it’s us that’s ripping them off when it’s not.
Stock levels can make or break a service organisation very easily and they can also be used to gauge whether a contract is worth having or not and, on investigation, you’ll find that you’re not being paid enough for a lot of them to justify investing your hard-earned in stock that will ultimately become worthless. For example when we finished with Zanussi we had over £60K of stock on the shelf, that was all the slow or non-moving spares we didn’t want, we kept the useful gear. 😉
K.
Dave_Conway wrote:Some WP’s may disagree with this practice, but from experience a lot of customers are quite happy with this, especially those who are at work, mainly as it means they will only need to be there for one appointment rather than two. It saves them money as well !!
This comes down to one thing though that *WE* understand and see the huge benefit in and that’s manning the telephones with people that know what they’re talking about, even many of the good ladies out there like Roni and Brenda have an in-depth knowledge of what they are doing and how to book calls and/or pre-order as needed. It’s not the cheapest option on the face of it, but it is the cheapest option in the long term. Hence I do almost all of the calls now as I can answer most queries off the bat and can kill a lot of calls on the phone, in particular customer errors etc., in the main this is extremely effective and can even save the manufacturer/WP/insurer a shedload of cash, but trained staff cost more, it’s that simple.
Dave_Conway wrote:And hey! If they want us to carry out double visits for 50{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of the calls they pass us, then revue the rates, try double faxing/emailing 50{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of every call you handle. (But then some will try and tell you they already do 😉 )
LOL, like I can see that happening anytime soon and I have no idea to whom you are reffering! 😉
K.
On an associate subject, we have been lately noting that a certain company (sos) seems to have great problems advising what the model numbers are on jobs coming our way. As Ken so rightly says, to cover all the models, we need a removal van and add to that the ‘you will buy from our designated supplier with no mark up’ & you’re up the creek. Mind on the bright, side if all the manufacturers keep going belly up, we’ll soon only have afew models across the market.
We now refuse to carry a vanstock that isnt created by our own unique usage .
Different parts of the country can cause different faults due to simple things such as limescale,I knew a hotpoint engineer in the fens-Cambridgeshire who used to have an abundance of farmers on his patch all he repaired all day long were top loaders!,Then the powers that be did a uniform national vanstock and his first fix rate plummeted all because someone in an office looked at figures and decided what would be would be.
As has been quoted before we the very people that know this trade are ignored ,treated as stupid ,and basically cr****d on by the WP’S ,wether they be insurers ,manufacturers ,sos,whoever
Also has anyone noticed how these contracts revolve on an approx three yr cycle ,Its all the same work being passed around the same ever diminishing service providers ,And why are we diminishing because the buggers dont pay a realistic rate to start with ,I had a discussion with a large insurer recently who wanted to know why my office wasnt manned on a sat ,my response was that they dont pay me enough ,they were genuinely amazed at my response as they thought they were paying the “industry rate ” so theres the challenge we have to raise that rate to a standard we find acceptable I have been in this industry all my working life and I am becoming more and more disillusioned with itthere I feel better for that
Daf wrote:I had a discussion with a large insurer recently who wanted to know why my office wasnt manned on a sat ,my response was that they dont pay me enough ,they were genuinely amazed at my response as they thought they were paying the “industry rate ” so theres the challenge we have to raise that rate to a standard we find acceptable I have been in this industry all my working life and I am becoming more and more disillusioned with it
there I feel better for that
Exactly! Well put Daf and that’s what UKW and to an extent DASA is all about.
You’ll feel even better after a glass or two BTW. 😉
K.
Gentlemen,
Might I just start by congratulating you all on one of the finest topics yet, and the quality of the reply’s thus far show this community working at it’s best.
I just hope I dont let side down with my twopenneth. From the reply’s we can all see that there is a very diverse approach by members to thier particular circumstances and the w.p.’s they work for. To carry enough spares for first time hit’s, as far as I am concerned is a non starter, because like so many others I work for, in excess of 20 manufacturers and w.p.’s and it is very hard to work a fully loaded eighteen wheeler pentacnican for every engineer into the price, especially when I am expected to fund the stock levels from my own pocket and make no mark up on said spares.
The closest opinion in the reply’s to my own position, is that of Dave Conway i.e. to monitor the call’s closley and try and send the engineer with the part.
The problem with this is, that if the part is out of stock or a special order you then get the customer complaining to the w.p. that we havent even called to the appliance, they usually omitt to tell the w.p. that I have discussed thier appliance with them and told them that I am ordering the most likley part.
We are all aware, that we somtimes have to send an engineer along just to show his face or when the customer can,t be bothered to look for a model / serial number. IMHO we should demand certain information from the w.p. and customers before accepting the call, such as model no’s and serial,no’s or reject the call. The w.p.’s are quick enough to reject our invoices for far less important information.
The most important item of all IMHO is the issue of vastley overpriced spares. We should approach all interest parties i.e. Insurance companies, trading standards, office of fair trade, the press, cosumer agencies, etc etc. to stamp out this total ripp off by manufacturers. Only then, will we see the return of correctly priced appliances and the possibility of a return to economical appliance repairs and fairness to all.Best Regards as ever Del
TBH Del sometimes I wonder if the WP’s or manufacturers have that right, by that I mean what do you do if you get a hood that only works on speed 2, why you order the motor and PCB/switch *before* you go if it’s under warranty as the cost doesn’t matter, you have to do things like that to get the 1st time hits up. Now if we all do that for all the calls how much is it costing them? Would they not be better just to give us a free stock and pay the right rate for the job in the first place? We’re hardly likely to blag the stock and it costs them pennies anyway, but the impact on the service levels that they recieved would be nothing short of profound, we’re happy and the customer’s happy, who loses?
It seems insane to me that some of the manufacturers have not tried this to any degree, there have been some in the past that have dabbled in it, but they know what’s being sold by what distributors or retailers in the area so they should have a fair idea what to stock. But as Daf said that is often times ignored in favour of the “one-size-fits-all” approach to stock which, IME as well, simply does not work. I can understand it with the big players and direct agents since I know how that game is played only too well, but with the small manufacturers with limited ranges I can’t really see an issue. A prime example from me is Fagor, they recently sold a shedload of boxes into the local council for the refugees but we had to buy stock basically, but for two models of washer! Now why not give us a starter stock of a few modules, a few pumps, a couple of doors seals and a few other common spares and have an excellent 1st time kill rate? It makes them look good apart from anything else and could well be make or break on a contract like that.
One of the biggest compliants I hear about manufacturer service, one in particular ATM, is the speed to get back with spares, now from us ordering I can see why that happens with delays etc., but direct??!!
The reason I mention the above is that said manufacturer may well lose several contracts over that one factor, the cost…
Millions and, I do mean MILLIONS in sales!
Go figure?
K.
Indeed the service especially to I/G repairs is seen as paramount to customers. At the end of the day they don’t actually expect it to go wrong within 12 months in the first place (understandably from a customer perspective), but if it does, a first class speedy service will quite often mean the difference between:
1/ the customer ever buying that brand again.
2/ a contractor installing that brand again in a new development.
3/ the retailer actually stocking the brand again.
The list could go on.
Just a couple more points to consider.
Dave.
At the end of the day they don’t actually expect it to go wrong within 12 months
~ Oh but they should if its a Servis(if ever a name was a contradiction in terms )
🙄
but if it does, a first class speedy service will quite often mean the difference between:~ But the manufacturers are only interested in volume it seems
the retailer actually stocking the brand again.
~ Unfortunately if the price is right they invariably will 😕
Ho HumAh – now to continue where Daf left off – if ever there is a wonderful scenario – Servis oh service? – Call comes in, it’s been sold by DSG, service visit follows, module fault, order parts (well there are about twenty five different modules for this model each at £75 apiece) Return call 10 days later (if your lucky) to find customer has had an exchange. Quote ‘we only pay half rate if its exchanged’ Thought – whats the point of repairing anything for DSG if its within 28 day exchange period. Or better still an infamous work provider. Zanussi job, bearings – out of stock. They arrive 5 weeks later and the parts supplier phones up same day to ask why you havent repaired machine within the timescale. Its of course your fault and they give you a bollocking – God really is a comedian!
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