Parts Inventory: Elusive and Evolving

By Paul Mac Donald

paulmacdonald3altcropAs I wrote last month, the best way to facilitate first call completes is to pre-diagnose every service call before rolling a truck. But the second biggest contributing factor is also worth investigating. It’s all about having the right parts to complete repairs in a single trip. Having the right part will not only make you more profitable, it leads to happy customers who are impressed with your efficiency and speed, and inclined to make recommendations to family and friends across their social network.
Typically, replacement parts inventories are not managed well. This can be a major problem for service providers, as consumers unleash their displeasure on Yelp, Facebook and Angie’s List. Technology in modern appliances is unique to each brand and model, and repair parts are costly, making it impossible for service providers to stock their trucks with fast-moving common parts.
Service providers are being forced to take a new approach to managing parts inventories. Gone are the days of universal parts with elements that fit in eight different models. New appliance models are released every six months as consumers crave the latest gadgets and gear. Have you seen the Dacor wall oven with Wi-Fi connectivity enabling users to surf the net from the control panel? Imagine Martha Stewart walking you through stuffing a turkey via YouTube on your oven control. I’ve seen it in action. It’s impressive, but there’s not one part in that oven that can be used on a Wolf or GE oven.
Evolving technology in appliances presents a real repair challenge. How do service providers ensure they have the right part at the right time to achieve a first call complete? To make money in the service business a service provider has to pre-diagnose every call. Based on a customer’s complaint and the machine’s ability to self-diagnose using fault codes and internet connectivity, the servicer must order every conceivable part before running a call to the customer’s home. This is no joking matter since you may order three parts and only need one. The other two go back to the supplier for credit. Parts distributors are taking the brunt of this new inventory return phenomenon. Sooner or later this condition is going to come to a head and the industry will be forced to resolve it and level the playing field so that no one party takes the hit.
It is time to raise the retail price of appliances to cover the warranty and service obligations after the sale. So far we have not seen much motivation or movement from the manufacturers, however, in my opinion, they have to address the cost of this new phenomenon. Ultimately the consumer will bear the brunt of the cost to repair appliances of the future. One manufacturer has already stepped up to the plate. When you repair a Dacor appliance under warranty the manufacturer speaks to the consumer to validate the failure and pre-diagnose the repair. Then they ship all conceivable parts to the authorized servicer at no charge so that they have every chance of completing the repair in the first trip without the burden of cost of acquisition or returning of parts. Such costs have to be accounted for in the selling price of the appliance. You can’t ask for better than that. Or can you?
I predict the appliances of the not-too-distant future will not only self-diagnose, but also self-repair, via internet commands. It won’t cost much more to build appliances with dual components during manufacturing so that when one fails the central controller will simply switch to the back-up component without the help of humans.
Attend the United Servicers Annual Service Training Institute the 2015 ASTI February 9-12 in New Orleans to see all the latest technology in appliances and what’s coming next. Registration and details at asti.us.

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