Skip to main content

parts are parts, or are they?


The plain simple truth is most service businesses would not survive without parts.  On one extreme parts can be considered materials for projects; or those parts you sell during a service call. How many service companies do you know that would allow a client to say… "just send somebody and I will provide the parts". Unfortunately, as we all know this happens many times in commercial building environments where management companies may want to procure their own materials. Of course, from a revenue and profitability perspective (because a lot of us apply the hardware model to price parts, the smaller the dollar value the higher the mark-up) parts are important. 



One of the biggest challenges service organizations have, regardless of size, is the ability to compel purchasing behavior. When you take a project that is for the most part being managed by either a procurement manager or a project manager, the purchasing of materials can be fairly straightforward. In the other case when you relinquish your control to the field and allow purchasing to be managed directly by field technicians, the results can vary. Many factors influence the decision criteria around where and which part to purchase. The real key is ensuring that we drive the most value in that purchase. Value includes the price, distance to procure the part, OEM requirement or not, etc..  All of these aspects can be joined together to form the best value based decision.  As hard as the field technicians may try to drive the best value into an organization, they just do not have enough information.  This is where we see procurement or marketplace systems really shine.  Our ability to compel decisions at the point of purchase by using tools that can aggregate, catalog, and compare the value between suppliers.  PO books, P Cards, credit cards, are all certainly effective in the service business, however, you are simply not getting the most value that you can out of your material purchases.  Regardless of your size you should reassess your purchasing process as you are likely leaving money on the table.



-----

Next post:  improving customer perception

-----

Comments

Popular posts from this blog

resilience, do you believe?

Seeking out the closest spot to the door of the office was not a common practice; however, at 07:00 on August 24th, 2022 the temperature was already 96' and 98% humidity.   The building would have a hell of a time keeping up today, rolling black-outs and brown-outs would be inevitable.   It likely won't be an outright equipment shut-down, instead we will have to endure the impending "brown-out" conditions, a slow, low voltage and high amperage stressing of our electrical infrastructure and connected systems. Our deliberate and continuous leverage of Industrial IoT (IIoT) technology and the companion AI prescriptive models have positioned us well. It had to be around the year 2018 when we invested in IIoT.   Heck, most were comparing our endeavors to the "Nest" thermostat, a pioneer (yet very fundamental) entrée into home-based IoT.   Naysayers were laughing that we would never see the benefits; however, our fragile National infrastructure and Mothe...

is your "score", you?

Avid Andy begins to wonder if he may be schizophrenic.   Or could it be a sign of true genius when he can see a problem from all sides? Andy was reflecting on a service meeting that happened last week.   Conversation was around our ability to objectively measure things and make better decisions. At the center of almost any measurement environment are the fundamentals of math. To determine priority or influence, it seems logical when dealing with inanimate objects like sensors, assets, and sites in a portfolio to move towards "point-based systems". The real dilemma for Andy seemed to comes when we begin scoring humans and letting pre-determined algorithms establish an individuals path. Our service meeting quickly changed from tactical to philosophical discussions and one of the technicians, Pragmatic Paul, made mention of a black mirror program (Netflix) named "Nosedive".    In this futuristic episode, an individuals score dictates their behavior and those ...

In$pired

As the steam from Avid Andy's coffee fogged his glasses on this crisp January morning, he reflected on last year and thought enthusiastically about the year ahead.   Sometimes the noise of business is deafening, we rarely take the time to contemplate our moves, instead are often thrown one direction or another.   Hey, face it, if you are reading posts to gain perspective you fall in the group of folks who pride themselves as obsequious hoop-jumpers.   We live to help others and expect that all of those around us feel the same way.   I just love Influential Irene.   Okay, it is out in the open, she is an inspiration for me and so many others.   Irene reminds folks every year, without fail, these three statements which she fondly refers to as "the punchline" (although this is no joke).   Businesses, of any size, will be successful if they remember that it is people that make a company.   Put this advice into practice, today: Sincerity |...