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SERVICE BENCHMARKS

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

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  1. SERVICE BENCHMARKS

  2. Benchmark = Minimum Acceptable Performance

  3. 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

  4. Industry Benchmark Model - Copiers Revenue Allocation

  5. 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

  6. 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

  7. Service Benchmarks Parts – 16% All Parts used for servicing machines in the field as well as parts retailed, manufacturers’ rebates and warranty credits.

  8. 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

  9. 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

  10. Global Imaging Benchmarks

  11. 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

  12. Staffing and Productivity

  13. 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

  14. 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.

  15. 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.

  16. 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

  17. Service Benchmarks Call Back Parameters Segment Days/Copies

  18. Service Benchmarks Response Time = 4.0 Hours or Less <2 Hours – High End Machines <4 Hours – Middle Segment Machines <8 Hours – Low End Machines

  19. Other Service Benchmarks Carryover Calls Less than 2.0 Calls on the “Board” per Technician at the end of the day

  20. 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

  21. Other Service Benchmarks Territory Staffing Copies per Technician per Month

  22. 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

  23. 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

  24. 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

  25. Performance/Reporting • Productivity Report • Excessive Call Report • Quarterly CPC Report • Obsolete Inventory Report • Quarterly Inventory Report • Pro-Active Reporting

  26. PostAcquisitionService Performance

  27. Acquired Company Performance(30 – 45 Days)

  28. Top 5 Contributors Causing Current Performance Level • Accountability • Product Reliability Concerns • Field Structure • Quality of Call • Lack of Service Reporting Utilization

  29. Accountability • 8:00 – 5:00 • We consistently identify technicians arriving late and pulling out early • Inaccurate daily reporting of time. • Inconsistent work ethic

  30. 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)

  31. 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

  32. 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?

  33. 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.

  34. 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

  35. Quality of Call • Hit & Run Activity • Reliability Issues • High Call Back Rate • No or Minimal Field Audits Performed

  36. Resolution • Full implementation of “total call” procedures • Field audits to “inspect what you expect” • Tie audits passed to bonus and reviews

  37. Lack of service reporting utilization • DISCUSSION……………………………

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