How much is your time really worth?
I was cleaning up some old files when it dawned on me that we used to have a parts department. We carried fast moving parts in stock, including brakes, hoses, batteries, fluids, and more. We even carried specific brands for customers who drove foreign cars.
As I look back, I can recall that we carried approximately 200 lines of products. Twice a month the jobbers route representative would visit and do a stock order (for which we gained a better discount, plus we were allowed to restock five percent of slow or non-moving parts annually). Those parts not in stock were delivered in a timely manner after the usual panic order to the jobber.
Then vs. now
The system today is, well, completely different. We’re in a “just in time” world. Parts are ordered through the website, or in some cases during the write-up of the repair order. The computer recognizes the need and orders the parts required.
Oddly enough, while in Florida I had some work done at the local Meineke (replacement water pump on 4.6L Ford). The program completed the work order as I was dropping off the car, and they honoured that figure when the car was ready for pick-up.
So, what can go wrong? Plenty! There could be no stock at the warehouse, they could get the serial numbers wrong, etc. What I ran into was labour leakage. Let me explain.
Let’s say we would order a part at 10.00 am, after verifying that the part was available at the jobber. The part would not arrive until 11.30 am. That hour and a half was about an hour longer than it should have been. The agreement with our supplier was 20 to 30 minutes delivery for in-stock SKUs.
We tracked when the order was made and when it walked through the door, and we never achieved the 20 to 30 minute window. The lost time in delivery was hurting our bottom line.
What could we do? Fortunately, our relationship with the main supplier was good enough that we had a meeting to find out why. First off, most of their business came from nine major shops, yet their phones were tied up with nuisance calls. One could never get through.
Solution? Those major shops received their own line, plus a dedicated counterperson to move things along. Our labour leakage numbers fell after that.
Time is money
Be wise, and start looking at the time you’re losing to inefficiencies. After all, time is one of the products we sell!
Short story: How did I get the jobber’s attention? Well, we were working with Queenston Auto Parts at the time. Really a great bunch of guys that ran a good business. I was so upset at not being able to call in that I made my cheques out to “Queenston Hold.”
Mike, the owner, came over to the shop telling me his accountant couldn’t cash these cheques, and asked why I wrote them out this way. I picked up the phone, called his number and handed him the handset. On the other end: “Hello Queenston, Hold.” He got the point.