Inventory Control Min to Bin Analysis

The Min to Bin Analysis is a very simple, and often overlooked, tool to determine if the stock order process is performing as expected.

The Min to Bin Analysis reviews the stock order process by each task within the stock replenishment cycle.  The analysis begins at the point the part reach the reorder point and breaks each task into the number of days for each task.

The typical tasks within the Min to Bin Analysis are:

·         The number of days when a part reaches order point to being ordered in for stock replenishment

·         Number of days it takes the vendor to process the stock order

·         Number of shipping days for the stock order to arrive at the warehouse

·         Number of days it takes for the stock order to be placed back in to stock

·         Number of days for the stock receipt to be receipted in the inventory system

The total number of days represents the total Min to Bin Days.

Once the number of days has been identified it is important to take a closer look at each task to determine if improvement can be accomplished, instead of increase the number of lead time days, which increase the inventory level.

Below is an example:

Min to Bin Tasks	# Days	Task Improvement
Established # Days to Replinish	9	9
# Days Order P. to Order day	4	0
# Days vendor process stock order	2	0
# Days to ship stock order	4	1
# Days to receipt stock order	2	1
Min to Bin Days	12	2
Deficit Min to Bin Days	3
Updated Min to Bin Days		10

The current system is set for a 9 day  Min to Bin lead time.  Based on the analysis the process is taking 12 days to replenish the stock orders. 

After additional review of each step in the process it was determined the number days it is taking ship the stock orders can be improved by one day, and the number of days to receipt the stock orders can be improved by one day.  Therefore two days can be taken off the 12 days, but this still is higher than the systems current 9 days.  To meet the expected inventory fill rates the Min to Bin lead time will need to be raised to 10 days.

By conducting a closer analysis of how to reduce the number of shipping days and the number of days to receipt the stock orders, will prevent increasing the inventory level by two day.

Parts and Service Sales Representative or Equipment Maintenance Manager

Many equipment dealers utilize a person that conducts customer calls to assist in providing of the parts and service needs to support the customer’s fleets. The titles for this position has various titles such as PSSR (Parts and Service Sales Representative), PSR (Product Support Representative), CSA (Customer Service Advisor), and there are most likely a few other titles.

No matter the title, the roles and duties are similar:

• Assigned territory with an assigned customer list, expectations of establishing number of customer visits per day, and conduct cold calls to grow the business.

• Base pay with some type of a commission based on sales, gross profit, special program offering, customer growth, or other areas that are a focus the dealership has established as important to grow the product support business.

• Record the calls made into some type of CRM (Customer Relations Management) data base.

• Provide quotes based on customers request.

• Communicate work status of the work in process for each customer.

• Resolve customer disputes.

• Promote programs that keep the shops full, field service fully utilized, and promote the competitiveness and strengths of the dealership.

Another position that can play a key role in supporting product support business is an Equipment Maintenance Manager. The focus of this position varies considerable from a PSSR. The Equipment Maintenance Manager can provide strengths in supporting the customer and growing the product support business to a deeper level within the customer’s maintenance department, as compared to the PSSR. The primary focus would be:

• Regular review of the customer’s maintenance schedule. This could be daily/weekly/monthly- depending on the customer’s requirements.

• Coordinate the down time of the equipment within the customer’s maintenance and production departments, as well as the outside services needed to support the repairs. This would include scheduling support from the dealership, and other sublet services needed, communicating with the dealership’s rebuild shops to review the work in process, approval of parts reuse decisions, and repair criteria decisions, and final approval of the repair invoice before it is presented to the customer.

• “Walk around “of the fleet with the Maintenance Foreman, or technicians to identify repair needs and establish priorities based on production and criticalness of the repair is conducted on a regular basis.

• Review the various diagnostic tools such as oil analysis trending, warning alerts obtained from the GPS information (Komtrax/Product Link), review payload data, tire wear, bucket/dozer/undercarriage wear patterns. Utilize this information to guide the customer in modifying practices that will improve the maintenance and repair cost of the fleet.

Key difference:

• Equipment Maintenance Manager can only support a limited number of customers.

• Equipment Maintenance Manager will be onsite more often than the PSSR due to limited number of assigned accounts, and focus on managing the fleet.

• PSSRs typically are selling/quoting single events (PM Service, a hydraulic cylinder repair, filter agreement, hydraulic hose & fitting program.

• Equipment Maintenance Manager is balancing the repair needs with the production schedule and repair cost management.

• The PSSR would assist in selling the Equipment Maintenance Manager concept to the customer.

• PSSRs have a larger customer base and must conduct several customer visits per day.

Summary:


Both positions are critical in the growth and success of growing the product support business. Utilizing both positions can provide an expanded product support offering that adds value to the customers. The Equipment Manager position has been used in great success as Project Managers on mine sites, and can easily be adapted to the construction, landfill, and scrap yard customers.

Resident Technician Program

Resident technicians can be utilized to support and grow the product support business of a dealership. Following is some information that should be considered when establishing a resident technician program.

When territory coverage requirements continue too:

• Increase the amount of coverage between various store locations

• Provide quicker response time to meet the priorities of the customer

• Customized to meet the local customers. Resident Technician can include being assigned to a specific territory, or to as an onsite technician assigned to a single customer

• Reduce the amount of time taken to commute to and from job locations

• Build a foundation for additional branch locations

• Bring business to the branch shop locations. Component rebuilds and major machine repairs should be repaired in the branch shops. The resident’s purpose is to perform quick repairs and identify opportunities to “fill the shop”.

• Drive cost out of the customer transaction price that does not add value (travel time and mileage is a non-value added expense)

• Personalize the relationship between the customer and the dealership. A resident technician adds another “customer touch point” opportunity.

• Provides a competitive advantage and can assist in protecting an assigned territory.


When does having a Resident Technician make sense?

• Customers that have critical job sites that requires minimal downtime

• Customers where technicians are scheduled on a daily/weekly basis

• Customers that require quick response time

• Customers that are located beyond 50 miles from the nearest branch store, or over one hour of travel time one way to the customer site.


Customer Service Benefits Received from a Resident Technician Program:

• Quick Response due to less travel time and/or being onsite.

• Personalized Service from the resident technician. The resident technician becomes familiar with the customer’s machines, repair practices, and decision making approach to planning, scheduling, and performing repairs.

• Cost Savings due to reduced travel related expenses and non productive related expenses due to “Maytag Repair” philosophy.

• Resident Technician often becomes part of the customer’s maintenance team. A level trust is developed with the customer.

• Resident Technicians are available to take on additional responsibilities that meets the needs of the customers and the expertise level of the technician.


Program Requirements:
The requirements of a Resident Technician Program require attention to details that include not only supporting the customer, but also provide assistance and support to the Resident Technician. Listed below are factors that are critical in the success of the program:

• Relationship with the local community, customers, Parts and Service Sales Representative (PSSR), and Account Manager

• Service truck-  The proper size based on the size and type of equipment to be serviced and repaired.

• Tooling considerations depending on remoteness of location

• Drop box for parts deliveries and parts return

• Drop box location- usually utilize a local customer that is willing have a drop box placed on their property and access is available for deliveries and pick up by UPS and LTL truck lines. Access to a forklift is helpful.

• FAX machine at home

• Phone line for employee to use for FAX and data transmission via lap top

• Voice machine or dispatch service available to receive customer calls and schedule jobs

• GPS unit on truck for safety and locating of technician.

• Procedure established on frequency of calling in to home store.

• Procedure established on paperwork flow and transmission (time cards/entry, service reports, parts returns and credits, core inspections and credits, COD (collections and processing)

• Wireless connection

• Procedure on having service truck repairs performed

• Local customers identified- needs to be enough to support technician

• Fliers sent to local customers of phone numbers and technician name

• PSSR and Account Manager buy-in- involve in interview process

• Visit customers to introduce Technician

• Ability to work on other products as necessary

• Lap top

• DVD parts and service material

• Portable printer

• Cell Phone

• Process for working in different assigned areas. Where does the revenue go? Example: Technician is not busy in assigned areas, so works in at another store for a week. Where does the revenue go?

• Monthly reports to resident technician- Resident Technicians like to see revenue/non productive time/expenses

• Regular visits by manager, PSSR, Account Manager

• Relationship management between local customers, PSSR, and Account Manager.

• Local suppliers to purchase shop supplies and parts needed locally

• Training in the areas of customer relation skills. It is important the technician can effectively work through any issues with the customer.


Technician Requirements:
The requirements of a Resident Technician vary from the what is required of a Field Service Technician that is scheduled to visit a customer jobsite, perform a repair, and move on to the next customer.
• Technical and repair skills that exceed the skill set of the customer’s technician, and exceeds the skill level of most distributorships Field Service Technicians.

• People skills that promote a positive attitude, a sense of urgency that is acceptable to the customer, and flexible to the every changing situations of meeting the customers’ needs.

• People skills that promote a positive attitude within the dealership. Working effectively together with the sales force, other technicians, and office staff are critical in the success of growing the territory.

• People skills that continually seeks additional business for the dealership, while adding value to the customer’s operation.

• Knowledgeable of the local customer base and their expectations will assist in growing the business.

• Maintaining a flexible work schedule that can adapt to the needs of the customer and the dealership, while accomplishing the personal needs of the employee.

• Willingness to work on all brands of equipment, and knowing the personal skill set limitations. To grow the business there may be a need to take on some tasks that others would not, or cannot, while keeping the success factor high, and the risk factor at a minimal.


Market Territory Assignment:

• An assigned territory with specific customers within the territory

• PSSR/Account Manager/Technician work effectively and on a regular basis to share information and provide potential service repair opportunities.

• Resident Technician is expected to schedule visit time with customers. Continual customer contact and visibility are critical in the relationship development.

• Supervisory visits to the territory are critical to support the resident technician.

• Performance measurement and communication is critical for the Resident Technician to fully understand the importance of the business elements and customer relationship required to support the territory.

Four “R’s” of Employee Retention and Recruitment

 Four “R’s” of Employee Retention and Recruitment
As we move into 2011 there are expectations the economy will improve, and some employers are beginning to hire and investing in longer term projects.

One concern that is beginning to arise is the potential of talent loss due to dissatisfied employees seeking opportunities outside their current employers. These are the employees the company retained through the downsizing and various reductions due to their skills and talents to help the organization succeed through the economic downturn. These are the employees that accepted the challenges assigned to them, and are now expecting some return on their sacrifices.

To avoid the loss of talent, and attract the new talent needed, organizations will need to take a look at how they support their employees and identify specific areas to improve the moral and attitudes and contributing to the employees future.

There are four critical areas I have identified that will assist the organization through the challenge of keeping the talent and attracting new talent.

Effectively utilizing the “Four “R’s” of Employee Retention and Recruitment “, will improve the retention and attract the new talent for the future:

Recruitment- This “R” focuses on recruitment of talent from outside the organization. Recruiting to fill the immediate and long term needs for skilled talent in our industry will continue to be an obstacle to our growth potential. Therefore, out of the box and creative approaches will be needed to recruit talent.

• Recruitment of talent from outside the organization will include a variety of approaches. There is no one successful approach in finding skilled talent.
• Advertisements will take a focus on what organization has to offer as a career and a long term employer with very competitive wages and benefits, seeking employees that will take the company into the future.
• Special events utilized to identify skilled talent. Some examples are: rodeos, race car, motor cross events, trade shows, and vocational schools.
• Apprenticeship programs will be utilized to “grow” the needed talent.
  

Retention- This “R” places a great deal of emphasis on developing the talent within the organization to meet the immediate and long term skill set needed to take the organization into the future. Development of internal talent will include the skill sets for technicians and non-technicians.

• The first priority will include developing the skills in the basic skills needed to accomplish the individual’s current job responsibility.
• The second priority will include the opportunity to develop skills that will support the employee's desire to advance within the organization. 

Respect in dealing with each other will lead us through the challenges that will occur. There will not always be an agreement in everything we do, but everything we do can be handled in a manner of respect. The issues should be addressed based on the issue, and not on the person.

Relationships that are positive between employees encourage an environment that allows growth and development as individuals and as teams. Through positive relationships the organization will recognize the needs of the market place and introduce competitive products and services that add value to our customers. Strong internal relationships encourage strong relationships with our customers. Recognition is important to all of us. It is important we seek the opportunities to recognize individuals and teams of employees on their successes and contributions to the organization. Each supervisor should develop their own way of providing employee recognition for their areas of responsibilities. The types of recognition will vary based on the event, the location, and the employees.