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January 2018
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It's Insanity

Einstein wrote: “Insanity is doing the same thing over and over again and expecting different results.”
Several weeks ago an equipment dealer asked if I could send him a copy of our article “End of the month blues.” He, like so many equipment dealers, continue to face this problem every month. We see it as nothing more than establishing discipline among your employees and explaining to your customer’s exactly what your payment policies are.

In too many equipment dealerships closing out the month is almost as if somebody has pushed the panic button on the 25th to 30th of every month.

Do you and your service manager(s) get frustrated with the amount of time it takes to close your out work orders? Do the two of you get frustrated with the amount of “work in process,” or WIP, you have to account for during the last three to four days of the month? We have worked with some fairly large equipment dealers who will book and bill as much as 33 – 40 percent of their shop work in the last two to three days of the month.

Work orders in this dealership were taking an “estimated” time of 23 days to close. We indicate “estimated” because no one really tracked this number. Do you and your Service Manager know or estimate the average number of days to close your work orders? At our suggestion, this dealer hired someone from outside his industry as his director of operations. This individual did not know enough about the dealer’s customer base to draw any false conclusions. He analyzed the problem, stepped in, set up a flow chart and assigned accountability and responsibility to personnel to get the job done. Employees were told that their number one priority was to cut down the amount of time spent in closing work orders.

We followed up with this dealer. It took a bit of time to drop the number to an average of 17 days, a little bit less to hit a five day average closing time and eventually this manager pushed it to hit two days. Then he achieved his ultimate goal of “point of purchase invoicing” and/or same day computer billing. They are presently processing 800 work orders a month for seven branches.

This manager states that it is all a matter of discipline and in having everyone believe it can be done. Webster says that discipline is: Training to produce a specific character or pattern of behavior, training that produces improvement.

We have an Operations Manager who firmly believes it is as important to write memos to tell employees why changes need to be made, as it is to tell them that these same changes must be made. We have asked his permission to provide us with an example and his memo is worthwhile for all our readers:

“When we say focus on the basics some may wonder how basic do we want to be? We are at times overwhelmed by issues which are caused by us not doing the basic jobs. An example is billing which should be a very basic chore. Our billing people have to be geniuses to figure out what and how they are supposed to bill something as basic as a work order. If all the information required is not on the work order or not legible they have to hunt for it instead of doing their job of billing. They are frustrated because they are delayed because someone else did not do the basic functions of completing the work order as required. Why does this happen? This happens because we allow it to happen, the manager is not managing. This is an example of something which happens in every location daily. Why don’t we take the time and make the effort to eliminate this basic problem forever. Taking the time now to repair this basic problem will save many times the amount of time it took to fix it. In this instance we are not making the people accountable for not doing their job, causing the burden to be put on someone else. Establish a process, train the people to do it and hold them accountable when it is not done. When the billing person gets the work order it should be ready to bill.”

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