As we continue to bring you extracts from The Service Manager Handbook, published by Advanced Field Service here we look at three quick tips to help you manage your service P&L whilst keeping your field workers happy and motivated…
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Mine your data to plan for the future
Today’s customers are flexing their buying muscles and exerting pressure on suppliers to fulfil ever more challenging SLAs. To stand a chance of meeting rising customer expectations, while maintaining profit levels, you need full visibility over your contracts and tighter control over your SLA management.
Setting realistic budgets and timescales
Having access to historical information on the actual cost of similar projects, contracts and large installations helps to ensure that future bid costs and resource requirements are accurately assessed and a realistic price proposed.
You want to win the contract but not at a cost that could break you!
Without formal systems in place, many service organisations find it difficult and time-consuming to compile this historical information.
As a result, bids are based on gut feel and best guess, running the risk of perpetuating profit-killing mistakes. With an accurate budget in place – covering all your materials, labour and subcontractor costs – managers will be able to track actuals against estimates and use this information for future planning.
Optimising parts management – Don’t tie up your cash
If your organisation stores parts, you will be all too aware of the dangers of stockpiling when cash flow is so important. Rather than relying on best guess, automating the forecasting process to predict usage will avoid the pitfall of holding more parts than are required.
Your systems should give you the power to analyse your parts history, so you can recognise trends and fluctuations to ensure that levels fall within the desired optimum range and can anticipate demand at peak times. This will reduce the amount of cash held in unnecessary high numbers of parts, and reduce the overheads of managing your inventory, while ensuring that your engineers achieve maximum productivity by having the right parts at the right time.
Managing parts ‘on-the-move’
Your systems should also enable you to keep track of your van stock levels and usage, as well as automatically re-ordering and replenishing when nearing a minimum level.
A good service management solution can help to effectively manage your inventory of parts, enabling you to carry the right levels to meet customer demand, without restricting cash flow. Good planning will also help avoid overstocks by scheduling parts to arrive when you need them, and ensuring you are able to optimise fluctuations in demand and effectively manage
Monitoring and managing performance
KPIs are a vital tool for service organisations to effectively track, monitor and evaluate performance to achieve sustainable growth. It is vital to identify which KPIs align to your business success. Standard service management metrics include:
- First-time fix rates
- SLA adherence
- Engineer productivity
- Job costing
- Call rates
- Net profit margin
- Stock value
- Customer satisfaction/retention
Without proactively monitoring KPIs, service businesses are vulnerable to problems that can seriously undermine both performance and profitability. For example, failure to regularly monitor sales margins could mean that a costly recurring mistake is discovered only at year-end.
All too often, key performance information is only available to managers and directors, with staff review periods that are too infrequent to proactively affect the outcome of future jobs.
Also, this information may only be available through a central source, which can lead to a feeling of ‘them and us’. Relevant information should be available to all members of the team. Simple, clear and targeted information – not complicated reports – will help them to take ownership of their utilisation, performance and deliverables.
Using systems that can provide this vital information in real-time, such as mobile or web-based reporting, allows field engineers to see if they are on track to deliver within the schedule allocated. If not, the issue can be raised at the earliest opportunity, the causes assessed and appropriate action taken.