We all know how it works...
You send an engineer to a customer but when he gets there he realises that he has the wrong spare part. He gets on the phone to the office to check if you have the right one but you are speaking to another customer or in a meeting with the boss...
He then goes back to his van to check his timesheet and discovers he has to get to the next appointment. So he tells the customer that he’ll need to come back another time – the office manager will let the customer know when. But as the customer points out, she has already taken time off work and now she is without hot water …
Have you ever been in this situation or a similar one? It’s not your fault. It’s not the engineer’s fault. But it’s frustrating for both, and even more so for the customer, and perhaps even more so for your boss. You know the proverb, “For want of a nail the shoe was lost …”
If you don’t have the right part when you need it you lose chargeable time, you may lose a customer, you damage your reputation and suffer from poor cash flow due to delayed invoicing.
As an office manager you obviously know that attention to small details can make a big difference. And as your company gets larger and more successful, these small details can add up, giving you a big headache.
If you try to solve the problem by overstocking, you just create a new one. Stock that sits on the shelf or in engineers’ vans for weeks on end reduces the capital at your company’s disposal and could also cause your cash flow to dry up. That’s why large companies invest in inventory management systems so that the right parts are available “just in time”.
So what is the solution? Here are some tips:
Tip #1 You need to keep on top of your suppliers
Which parts have you ordered? When do you expect delivery? How reliable have specific suppliers been in the past? Which parts from which suppliers are frequently returned e.g. because they are faulty? Who are your alternative suppliers?
You probably have a lot of this information in your head but you could save a lot of nervous energy if all of it was on your computer, at your fingertips.
Tip #2 Keep track of every single part
Second, you need to keep track of every single part that passes through your organisation and a mechanism for replacing them whenever they are used in a timely manner. The industry jargon for this is just in time supply management – impossible these days without computer software.
However, you also need a mechanism to ensure that your parts tracking system is kept up to date with timely information. If engineers do not bring back job sheets in time, if they don’t tell your office which parts they used or (in the worst case scenario) lose the job sheets altogether, you’ll soon be heading into a downward spiral causing delays in invoicing, bad cash flow, invoices that do not charge for all of the parts consumed or even forgotten jobs that are never invoiced at all.
Tip #3 You need an integrated system
Therefore, thirdly, you need an integrated system that tracks the entire movement of each individual part, so that you know exactly what action you need to take next. Parts should be seamlessly requested, ordered from the supplier, checked into your company, checked out, installed, and invoiced to the customer.
With intelligent categorisation of parts and appliances your engineers will also be able to put their hands on an urgently needed item at a moment’s notice. If your engineers could check parts availability remotely via a smartphone or tablet – even better.
Moreover, if you have a record of which parts and appliances have been installed at specific sites, you will be able to respond more effectively and more rapidly to any emergency or service callout.
Want to see what Commusoft can do for your parts management? Get a full walkthrough with our webinar:
Tip #4 Take it to the next level
Getting these basics under control is easy with job management software. But it will also put you in a strong position to take things to the next level, working with the boss to improve your commercial strategy.
For example, through segmented pricing. Does your company service a broad geographical area, or different types of customer? With effective parts management you can apply different prices with different margins, which will increase your profitability while at the same time increasing customer satisfaction.
Tip #5 Identify which parts are the most profitable
You can also move beyond managing at the purely operational level. With historical data of parts procurement and sale, you can generate reports that enable you to identify which are most profitable and those that do not generate profit – perhaps because you are under-charging.
As you know, your relationship with a supplier is a two-way street. If your company raises purchase orders effectively and pays the supplier on time, and is generally a joy to work with, you will find yourself in a stronger negotiating position to purchase more effectively – and again, your boss will see the benefits in terms of cash flow and the bottom line.
Is that your parts problem sorted? Headache easing off a little?
Commusoft parts management software allow you to improve your efficiency and your reputation with customers.
Click here to learn more or watch the demo below: