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SERVICE BENCHMARKS. Benchmark = Minimum Acceptable Performance. Industry Benchmark Model - Copiers Profitability Analysis. Category. % Mix of Sales. GP %. Sales Expense. Admin Expense. Individual Profit %. Weighted Profit %.

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slide1

SERVICE

BENCHMARKS

slide2

Benchmark =

Minimum Acceptable Performance

slide3

Industry Benchmark Model - Copiers

Profitability Analysis

Category

% Mix of Sales

GP %

Sales Expense

Admin Expense

Individual Profit %

Weighted Profit %

Hardware 50% 36% -25% -15% -4% - 2.0% Supplies 17% 44% 0% -15% 29% 4.9% Service 32% 52% 0% -15% 37% 11.8% Rental 1% 40% 0% -15% 25% 0.3% Total 100% 43% -13% -15% 15.0%

Operating Income

slide5

Cost of Goods Sold (COGS)

(as a percent of revenue)

GP 52 %

Service Benchmarks

Salaries 27.5%

Parts 16%

Auto 3.5%

Training, etc. 1.0

slide6

Service Benchmarks

Salaries – 27.5%

Service Department Staffing

  • Service Managers/Directors/VP’s
  • Copier Supervisors/Technicians
  • Facsimile Supervisors/Technicians
  • Dispatchers (Charged to Admin Expense)
  • Trainers (Charged to Training, etc.)
  • Parts Coordinators
  • Service Administration
  • Service - Other

47% of total company staff should be service

slide7

Service Benchmarks

Parts – 16%

All Parts used for servicing machines in the field as well as parts retailed, manufacturers’ rebates and warranty credits.

slide8

Service Benchmarks

Auto Expense – 3.5%

Reimbursed business miles for Service Techs and Supervisors, fixed dollar auto allowance, paid expenses incurred for company cars used for Service Department; i.e. auto depreciation, maintenance, fuel and insurance

slide9

Service Benchmarks

Training, etc. – 1.0%

Training salaries, manufacturer training schools, uniforms, computer related expenses for service department (ADS), phones (cell phones & pagers), miscellaneous expenses for Service Department

slide11

Service Staffing Ratios

  • 1 Service Director for 8 Field Service Managers/Supervisors
  • 1 Field Service Manager/Supervisor for 12-15 Technicians
  • 1 Dispatcher for 14-16 Technicians
  • 1 Parts Coordinator for 50 Technicians
slide13

Service Benchmarks

Definitions

Gross Calls – any calls that are generated by the customer calling in for machine repair, recalls/callbacks, incompletes and dealer originated calls

Recalls/Callbacks – service calls received on the same machine from the customer within a specific timeframe or when specific copies between calls has not been achieved

Incompletes/Reschedules – service calls that could not be completed by technician (parts, technical escalation, out of time, etc.)

Net Calls – gross calls minus recalls/callbacks and incompletes

Response Time – is the time the call is received/generated to the time the technician arrives at the customer’s location

slide14

Service Benchmarks

Customer Repair and Travel Time

Customer Time 72 minutes

Travel Time 30 minutes

Start at 8:00 a.m. finish at 5:00 p.m.

slide15

Service Benchmarks

5 Gross Calls per Day

First Call 8:00 a.m.

First Call Cust Time 72 min 9:12 a.m.

Second Call Travel 30 min 9:42 a.m.

Second Call Cust Time 72 min 10:54 a.m.

Third Call Travel 30 min 11:24 a.m.

Third Call Cust Time 72 min 12:36 p.m.

Lunch 60 min 1:36 p.m.

Fourth Call Travel 30 min 2:06 p.m.

Fourth Call Cust Time 72 min 3:18 p.m.

Fifth Call Travel 30 min 3:48 p.m.

Fifth Call Cust Time 72 min 5:00 p.m.

slide16

Service Benchmarks

Net Calls Per Day Per Technician

Average Gross Calls 5.0

Average Recalls 10% (0.5)

Average Incompletes 5% (0.3)

Average Net Calls 4.2

slide17

Service Benchmarks

Call Back Parameters

Segment Days/Copies

slide18

Service Benchmarks

Response Time = 4.0 Hours or Less

<2 Hours – High End Machines

<4 Hours – Middle Segment Machines

<8 Hours – Low End Machines

slide19

Other Service Benchmarks

Carryover Calls

Less than 2.0 Calls on the “Board”

per Technician at the end of the day

slide20

Calculation:

Total Contract Copiers multiplied by (1

plus Time & Materials %)

divided by Copier Techs and Working Supervisors

Other Service Benchmarks

Territory Staffing

Copiers per Copier Technician - 150

slide21

Other Service Benchmarks

Territory Staffing

Copies per Technician per Month

slide22

Other Service Benchmarks

Parts and Car Stocks

  • Parts Inventories
  • minimum of 4 planned per year and 1 random per tech per quarter
  • Target Car Stock (black & white service)
  • $2,500 - $3,500
  • Remote territories require more inventory to cut down on incompletes
slide23

Other Service Benchmarks

$145,000 Service Revenue per Service employee (excluding Dispatch)

$75 - $95 Service Revenue per Unit in Field per Month

2.5 Parts Turns

$18 Parts per Call per Service Technician

industry standards copiers
Industry Standards - Copiers
  • Annual Sales Per Employee $360,000
  • Annual Revenue Per Admin Employee 1,100,000
  • Annual Service Revenue Per Service Employee
  • (not including Dispatchers) 145,000
  • Annual Supply Revenue Per Direct Supply
  • Sales Employee 415,000
  • Annual Equipment Revenue Per Sales Employee
  • (not including Supplies or Drivers) 330,000
slide25

Performance/Reporting

  • Productivity Report
  • Excessive Call Report
  • Quarterly CPC Report
  • Obsolete Inventory Report
  • Quarterly Inventory Report
  • Pro-Active Reporting
slide30

Top 5 Contributors Causing

Current Performance Level

  • Accountability
  • Product Reliability Concerns
  • Field Structure
  • Quality of Call
  • Lack of Service Reporting Utilization
slide31

Accountability

  • 8:00 – 5:00
    • We consistently identify technicians arriving late and pulling out early
  • Inaccurate daily reporting of time.
  • Inconsistent work ethic
resolution
Resolution
  • We immediately implement “Clearly Defined” expectations at the field level
    • Tech, Supervisors, etc.
    • Stress 8:00 – 5:00
  • We implement AM & PM checks throughout the team
  • Clearly define how daily reporting should happen
  • Monitor reporting in detail for the next 30-45 days
  • Define our Benchmark of
    • First Call Completion 9:30
    • Last Call Completion 4:30
  • Monitor first and last call of day (always the longest)
product reliability issues
Product Reliability Issues
  • Heavy call activity
  • No internal benchmarking
    • Who services what the best
  • Minimal Pro-Activeness
    • Aggressively addressing excessive service
  • No “total call” procedure in place
    • No inspection process (audits)
  • Not utilizing all available service reporting to identify reliability issues
    • Excessive service
    • Reliability CPC data
resolution1
Resolution
  • Full implementation of “Total Call” procedure
    • Audits…”Inspect what you Expect”
  • Eliminate “PM” lights
  • Aggressively begin visits to all excessive service machines/stop excessive activity
    • Primarily performed by supervisors or product specialist
  • Immediately eliminate hit & run activity
  • Train managers to “target” audits
  • Begin internal benchmarking at the CPC level
    • Why are Bill’s machines running so much better?
field structure
Field Structure
  • Most companies are in a “generalist” structure
    • Techs work on anything within an area
  • Low Territory Integrity
    • 50 – 60% same tech
    • No ownership
  • Uneven workload distribution
    • Bob with 1 call, Jim with 10!!
  • High incomplete rates due to ineffective car stocks
  • Inadequate training/lack of effective car stocks, manuals, etc.
resolution2
Resolution
  • Perform territory analysis
    • Determine all machines in each zip code & associate volume
    • Determine product specialization split, i.e., 10 cpm to 40 (LV) 41 and  (HV)
  • Plot workload by copy volume in each zip code
  • Develop territories based on volume
    • Start in most populated areas first
  • Analyze parts usage by model (top 50 used parts)
  • Develop car stocks based on exact product mix, utilizing parts usage reports by model
  • Implement territories with product specialist
quality of call
Quality of Call
  • Hit & Run Activity
  • Reliability Issues
  • High Call Back Rate
  • No or Minimal Field Audits Performed
resolution3
Resolution
  • Full implementation of “total call” procedures
  • Field audits to “inspect what you expect”
  • Tie audits passed to bonus and reviews
lack of service reporting utilization
Lack of service reporting utilization
  • DISCUSSION……………………………
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