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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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Service benchmarks

SERVICE

BENCHMARKS


Service benchmarks

Benchmark =

Minimum Acceptable Performance


Service benchmarks

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



Service benchmarks

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


Service benchmarks

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


Service benchmarks

Service Benchmarks

Parts – 16%

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


Service benchmarks

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


Service benchmarks

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



Service benchmarks

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



Service benchmarks

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


Service benchmarks

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.


Service benchmarks

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.


Service benchmarks

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


Service benchmarks

Service Benchmarks

Call Back Parameters

Segment Days/Copies


Service benchmarks

Service Benchmarks

Response Time = 4.0 Hours or Less

<2 Hours – High End Machines

<4 Hours – Middle Segment Machines

<8 Hours – Low End Machines


Service benchmarks

Other Service Benchmarks

Carryover Calls

Less than 2.0 Calls on the “Board”

per Technician at the end of the day


Service benchmarks

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


Service benchmarks

Other Service Benchmarks

Territory Staffing

Copies per Technician per Month


Service benchmarks

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


Service benchmarks

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


Service benchmarks

Performance/Reporting

  • Productivity Report

  • Excessive Call Report

  • Quarterly CPC Report

  • Obsolete Inventory Report

  • Quarterly Inventory Report

  • Pro-Active Reporting


Post acquisition service performance
PostAcquisitionService Performance



Service benchmarks

Top 5 Contributors Causing

Current Performance Level

  • Accountability

  • Product Reliability Concerns

  • Field Structure

  • Quality of Call

  • Lack of Service Reporting Utilization


Service benchmarks

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……………………………