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Would
you like to be able to report next year that your service
department business doubled in 2000? The answer I get from
many of you is a really soft ... no.
I
find this perplexing. We have the opportunity to double a
segment of our business-service-but we don't seem to want
to do it. And we should want to do it. With margins on the
sale of new equipment almost nonexistent and the Internet
putting our parts business in limbo, labor is the only source
of profit left for equipment dealerships. Yet many of you
don't want to acknowledge this.
"But
there are no mechanics out there," you argue. Not true. They're
out there, but chances are they work for someone else, someone
who's willing to pay a competitive wage. Is it possible we
just don't want to compete with other industries for skilled
equipment mechanics? There have been stories in the media
recently with headlines like, "Aircraft industry entices mechanics
from other industries to satisfy workforce needs" and "Automotive
mechanics earn more than $100,000 in some parts of the United
States."
Are
we vulnerable to these new competitors in our labor pool?
You bet we are!
And
if you think it's tough to find good equipment mechanics,
try finding a good service manager. Or, tougher still, an
executive to run the parts and service department. Why is
that?
Could
it possibly be our own fault? Have we viewed the product support
function with the respect it is due-or have we taken it for
granted? Do you view your parts and service department as
your key competitive differential in the marketplace-or is
it just the group that supports the sales department? What
about your service manager? Is he a business manager or a
great technician? How did he get management training-or did
he? Who trained him to read a profit-and-loss statement? Does
he understand working capital? What about forward workloads
and shop floor loading?
If you think the solution to increasing your market share
of product support is simply to hire more mechanics, it's
not that easy. Adding mechanics only adds to the service manager's
job pressure. That's because the service manager operates
as a technical adviser to the customers, a service writer,
a personnel counselor to the workforce, a billing clerk on
closing jobs, a depository for a pile of abuse, a facilities
manager who looks after the plant, buildings and equipment,
and an OSHA compliance officer-and on and on and on. What
other responsibilities-directly related or otherwise-can we
load on him?
No
wonder the service management position is a very difficult
job to fill. To some degree, the difficulty we're having in
recruiting mechanics and service managers into our industry
is the result of years of less-than-adequate attention and
respect being paid to the product support function.
As
North American equipment dealers, we hold an extremely low
share of the actual labor applied to our equipment. Our customers
perform the largest portion of the labor. But more and more
of them are focusing on their core competencies and outsourcing
anything that does not provide proper profit and differentiation.
They understand that they will not be able to keep up with
the changing technology in the equipment or the increasing
regulatory burden. They want someone to take the problem away
from them and provide the level of machine owning and operating
costs and uptime that they both require and expect. Shouldn't
we take advantage of this?
If we look at the automotive or material-handling markets,
extended warranties and maintenance services have become a
dealer staple aimed at the goal of increasing labor market
share. Couldn't construction equipment dealerships follow
suit? Our goal is still the same in product support:
- Reduce
the owning and operating costs of equipment;
- Preserve
the residual value of the machine.
How can we meet these goals if we see the machine just once
every year or so?
How does that translate into sales of labor for your dealership?
Are you ready and willing to go for it?
The
choice is yours.
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