Being someone that is into lists, which many of you already know, it is that time of year. Many of you will have completed your objective e setting for the year. Many of you have ambitious plans ahead of you. Let me share with you some of the items that are on my mind and hope that many of you share these goals.

• Customer Satisfaction

The true measure of customer satisfaction is retention. So how did you do last year? Was your customer retention higher or lower than in 2004? What did you do that caused that result? And for those of you calculating retention for the first time were you surprised at your results?

Now what are you going to do to improve the situation?

Do you have the supervisor of the job call each customer after a shop job has been completed?
Do you call after backorders have been found?
Do you ask employees what we should be doing to make the customer more satisfied?
Do we ask the employees what they need in training, tools and systems to allow them to serve the customer better?

These are simple questions with really straightforward answers that have a serious bearing on the satisfaction of your customers.

• Asset Management

More and more pressure will be placed on return on capital employed in the future. This is directly driven by asset turnover. Yet we are stuck in age old paradigms on parts inventory turnover. Take a simple test.

How long does it take for a stock order cycle to be completed? The cycle starts when there is a need for a part to be ordered on a stock order and it ends when the part is back in stock and on the computer records.

So what is the cycle time? For most of you it will be about one week.

If that is the case I submit to you that your parts inventory turnover should not be less than twelve times in a year. That is right the turnover should be at least 12.

How about the Service Department?

Is there any reason that a job should not be invoiced within a week of the last labor? I don’t think so either. This means that a turnover for work in process of less than 26 is unacceptable. 52 is more in line. How do you stack up?

• Operational Effectiveness

The Product Support Best Practices Handbook published a few years ago pointed out many areas for the Parts, Service and Product Support groups to improve. Have you purchased the Handbook? Have you reviewed the suggested actions and implemented them? There is a lot to do here. Constantly taking cost out of process is a continuing challenge and one on which we must succeed. How are you doing?

• Sales and Market Coverage

Market share and customer perceptions are driven directly by how well we cover the market. We have talked about market coverage for years now in the Parts and Service area. We have asked the critical question repetitively. “Why don’t we have as many Product Support salesmen as equipment salesmen?”

What is the answer?

Unless the answer is we are getting there it is unacceptable. We pay lip service to the basic truth that a salesman sells the first machine but parts and service sell every succeeding machine...or not. Yes we don’t have customer coverage at the parts and service level that is adequate.

Check out the Parts and Service Opportunities Handbook for some attention getting survey information. Our customers think our competition is better technically, more responsive and produces higher quality work. What is going on here?

• Market Penetration

How well we have succeeded in our jobs in parts and service is measured by market share. I know we don’t have a precise tool to measure market share but suffice it to say we can do a much better job. Again in the Product Support Opportunities Handbook we were told that 44% of our customers had chosen other sources for the maintenance and repair work. Market share is in decline. What are you doing to fix this?

If you take on the above items I believe you will be on your way. So let’s get with it.
 
I wish you all a safe, happy and prosperous 2006. I hope to see you in San Diego at the convention.