Parts and the Cost of Service

The MCBC (Mean Copies between Calls) is affected by parts in a couple of ways. The most damaging is the concept of parts cost per call. If technicians believe that they are being evaluated on their parts usage, they will start scrimping on parts. The second is parts availability in the technician’s car stock. When a technician needs a part, and he doesn’t have it available, that automatically means a second trip to the client to install the part.

Parts That Don’t Matter

In each machine, some parts wear on a regular basis and need to be periodically replaced. The technicians should be encouraged to replace these any time they suspect it might fail before the next service call. If a feed tire costs $50 and they change it while they are on-site, it is a $50 feed tire. If they fail to change it and have to make an extra trip, it is now much closer to being a $150 feed tire.

Just looking at the example of our mythical feed tire, if the tire is rated for 100,000 copies, then the cost per print for that tire is $0.50 per 1,000 copies. If the technician changes it 10,000 copies early, that is a loss of $5.00 in the life of the tire. If the technician doesn’t change it and it fails at the 100K mark, the technician will have saved the $5.00 in tire value, but the cost of the service call, drive time, and mileage will most likely exceed $100 for most dealers. This would then be a net loss of $95.00.

A case in point, I was visiting with a service manager at a dealership, and the dispatcher asked us if we could look at a machine at a national account of theirs. The technician had been in the previous day for jamming, and the machine was now jamming again. We went to the client site and checked the machine. We found that the previous day the technician had changed the feed tires on one side of a tandem cassette, but not the other. The machine reports showed that the tires on the side where he didn’t change the tires were past due for replacement. A simple check of the machine reports and a few extra minutes could have prevented our visit and customer dissatisfaction.

It is vital that everyone understands the negative impact of not replacing the wear parts. Make sure that the techs know that you are not looking at this type of part when evaluating their parts usage. Make sure that when looking for ways to control parts cost that these items don’t get included in what matters.

Parts That Are Not in the Car Stock

The second issue is parts availability in car stock. The challenge for the service manager and the parts manager is to balance the inventory of parts in the warehouse and the technician’s car.

Maintaining parts inventory is a complex issue. The dealership needs to consider the time value of money tied up in inventory. This means that every dollar’s worth of inventory is a dollar that can’t be used in some other way to generate revenue for the company.

Understanding the cost of having parts and the cost of not having parts highlights the need to actively manage both the inventory in the warehouse and the car stock of the technicians. Active management means reviewing the parts that each technician has in his inventory and how often he uses them. Another fact that needs to be considered is how many times a part causes the call to be rescheduled because the technician didn’t have the part available. A third factor to be included is the cost of the individual part.

For example, if a technician has a low-cost part in his inventory that he uses very infrequently, the part probably should be left in his inventory because the cost of rescheduling would far outweigh any benefit achieved by removing it. The converse is true; if a technician has a high dollar part in his car stock that he uses frequently, it should be left there as well. What will need to come out are high dollar parts that are infrequently used. These parts should be returned to the warehouse, where they are available for all the technicians when needed.

Another factor to consider is the distance from the technician to the warehouse. If the technician is remote, then his car stock would need to be larger than a technician who frequently visits the office. Associated with this is the frequency with which the car stocks are replenished. The longer the time between restocking, the more the tech needs to have on hand.

Parts That Matter

When evaluating parts cost, there is one that matters. These include using parts for troubleshooting. In many cases, a technician may not know what the issue is with a machine. To try and resolve the problem, the technician may then start to throw parts into a machine until the problem is solved. This is the most expensive and frustrating method of copier repair.

When this happens, the technician may leave all of the parts he ordered in the machine and discard perfectly good parts. This becomes especially expensive when the tech orders high-value parts like circuit boards and entire units. The policy needs to require that a technician remove any parts used for troubleshooting that do not resolve the problem. These can be returned to the manufacturer or kept in the warehouse for future needs.

Inventory Control

The frequency of parts ordering can play a significant role in the success of a dealership’s success. In many cases, there is a minimal cost difference between ordering weekly, monthly or daily, and yet these choices make a significant difference in the necessary inventory on hand.

If a part is used twice a week, then with monthly ordering, you would need to keep a minimum of 9 in stock. You would need that many to cover what would be used plus a spare for the shelf. The same part with daily ordering would only need to have 2. There is more labor involved with regular ordering, but that starts to be offset by the total time spent compared to monthly ordering, overall cost, and the need for storage space.

The same holds for the technician. If you can restock him daily, the quantity that he needs to carry diminishes. This is important given the limited space that a technician has for parts. For remote technicians, the restocking becomes more challenging, but the more frequently it can be done, the less he needs to carry with him.