Step Up Your Service Level And Profit By Attending To Metrics

by John Hickey | Tech 2 Success
Posted On: 12/11/2018

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  John Hickey
We often read articles about companies enjoying success by using technology in their businesses. Many of us are fortunate to have worked through a technology revolution in the convenience services industry that has introduced handhelds, DEX, remote monitoring, cashless, micromarkets, GPS, e-commerce, digital signage, cloud hosting, pick to light, iPads, smart glasses and more to our operations. These are all wonderful additions to our industry that have accelerated our processes, improved metrics and helped grow top-line revenue. 

Although technology has automated much of the decision-making in operations, an overwhelming majority of operators will say that service and a personal touch is what differentiates them from the competition. This claim may be true; however, it is seldom backed up with service metrics to substantiate it.

In the 1990s, Six Sigma became a popular operations method for reducing defects and delays in business. Today's operating model is more focused on people and empowering them to provide the best consumer experience in your business. I recommend that operators take a combination of the two approaches to be able to confidently boast about providing the best ser­vice in their marketplace, with the numbers  to prove it.

There are metrics that are available in each of the primary management systems on which operators should focus to reduce the number of defects in daily service.

How many services had a defect today? 

A defect is any mistake that causes a potential issue or loss of revenue in the future: Missed services; stocked-out products; picks not matching the pick order; columns left empty; collections less than $75 (or amount of choice); and repair visits left unresolved.

Each time a defect occurs, there are two very expensive ramifications. The first is the potential for lost revenue. We all know that when consumers don't get what they want, they may not come back – and even if they do, they won't purchase two of that item.  The sale is lost. The other effect is an added low-revenue service. The most expensive part of our operations is sending a staff member to visit a location. It must result in a profitable transaction.

The good news is that while these defects happen in every operation, most have the technology in place and the people in position to reduce service defects at the root cause, and so enjoy the benefits of truly measured best service.

Here are ways you can empower your team to reduce defects in your services.

Keep score

Assign a scorekeeper to track these metrics and post them daily for everyone in the company to see.

Publicly displaying this information will create an environment where those responsible for the metrics will want to make sure their items are appropriately handled.

Identify high-volume machines

Pareto's model states that 20% of your business will produce 80% of the revenue/profit/issues, etc. Your business may not be exactly 80/20, however it's likely pretty close – and eye-opening when you analyze it.

Mark the high-volume machines in your system so that every member of your team will easily see when they are working with one of them.

Treat high-volume machines with a new, unwavering level of effort that will ensure that they receive, without a doubt, the most exceptional service your company can provide. It's not possible to be perfect all of the time, but it is possible to be perfect in 20% of your accounts. Empower your team to provide the best service possible to high-volume accounts.

Focus on tomorrow

If you are an operator, you likely have several staff members in the field currently executing today's game plan, filling shelves and machines, making changes and fixing issues. Their efforts will produce an additional list of tasks to tend to, sometimes by management stepping in when all field staff has been deployed. This is the most difficult mindset change to make, but it is the most important improvement on which your management team should focus. You must commit to making sure that your field staff has everything they need to execute tomorrow's work. This includes the proper list of accounts to service, and all the products they'll need to fill the shelves.

If the warehouse doesn't have a product, you need to know about it and make a conscious decision of what to substitute, or else replace the item; in either case resolve the warehouse fulfillment issue.  With hundreds of items carried in each warehouse, this occurs daily on different items.

If a product is out of stock, that must be communicated.  Drivers picking off their truck need to be instructed on which product to use as a substitute, and be instructed to stock their truck with the appropriate amount of that product. 

Pre-picked/forecasted routes that are picked in the warehouse have the benefits of applying the overrides in the LightSpeed pick-to-light system, for operations that are using it, or otherwise simply directing pick staff on what to use as replacements. Displaying a list of out-of-stock products and their replacements on a large white­board in a common area of the warehouse for all to see is a good practice.

Review your stocking policies

Vending management systems have settings that enable operators to defer replenishing a product until it is depleted by X%, when generating an order for a machine or forecasting products to be loaded on a truck for the next day. The systems also have settings that allow operators to choose a bundle in which an item is picked, for example six-packs or 12-packs, rather than individual units of each product.

With the expanded placement of glassfront beverage machines, using these settings in combination can cause an item to be passed over for replenishment until it's completely sold out. This is a very common cause of stockouts! It's extremely frustrating to send staff out to service accounts and the reason they do not have the product required to fill the account is a math mistake created by us!

For example, one selection of energy drinks might call for putting a maximum of eight cans in a beverage machine. If the system is set to pick canned beverages in six-packs, and also set to pick this selection when it is 40% depleted, then the system will ignore this product until there are only two cans remaining.  Whenever five units are sold, the column is left with three – not enough inventory to last until the next scheduled visit. If the schedule is dynamic, it will trigger a stockout, resulting in low revenue and lost profit. 

Leveraging these settings can positively impact field inventory levels, allowing operators to capture the value of excess inventory.  But improperly applying these settings can have the inverse effect, triggering unprofitable services.  Do some root-cause analysis on stockouts in your machines to see whether these settings are being used appropriately.

Finish today today

If you sit down at your desk in the morning and start reviewing the end-of-day reports from yesterday's routes, you are already behind in resolving issues. A manager's day today needs to be concentrated on the work that is being performed in the field now, and being absolutely prepared for tomorrow's work. If you are chasing issues from yesterday, they are likely 24 hours old – no longer fresh in the minds of your team to gather more information, and potentially already  causing lost revenue and customer dissatisfaction. Today's fires are likely starting to pull at your attention, so completing a review may not be possible. Collect information throughout the day. 

Create a culture of communication

"Overcommunication" can prevent many or most of the problems that happen in a business. Creating a culture of communication is not easy; however, the benefits are tremendous.

Route drivers and field service staff put eyeballs on 20% of your field inventory every day.  Beyond the transaction data, you also must retrieve the other information they're obtaining about your business. This is done by a daily check-in process.

Review and address defects in today's work: missed stops; mis-picks and excessive stockouts. Are there any issues not already reported, and do any accounts not look the way we would want them to? Is anything going on at an account that we should know about?

Communicate important items for the next day's work

What products are out of stock and what are their replacements? What accounts are scheduled for service? Have any clients made requests? Are there any administrative issues, accountability items, etc.?

One of the best technologies that has disappeared from field service is the "Nextel" radio pager. Nextel devices made it easy for a route driver or service tech to just quickly report an issue to customer service or the manager. The benefits of modern smartphones are their ability to recognize voice commands, and the high-resolution camera in everyone's pocket to illustrate the issue they are facing.

Encourage the field staff to text all issues immediately to the customer service desk, so they can be tracked and distributed to managers who may be in the field and not inclined to record notes from phone calls. Waiting for the end of the day to retrieve this information will lead to incomplete information and a delay between the earliest time that an issue can be addressed and its actual resolution. Encourage the team to take photos and share them so that they can be referenced when solving an issue.

Management huddles

Managers work long hours and are sandwiched between the needs of their customers, employees, management directives, and the daily issues that arise.  Being at the center of it all creates a lot of stress for managers, which in turn can cause resentment if they are constantly processing all the requests without having an easy way to obtaining additional resources or guidance to solve problems more effectively with a team.  Schedule a weekly phone call or meeting to review open items, and allow management teams to help each other solve problems.  Schedule a daily managers' huddle, no longer than 15 minutes, to review items that need to be addressed ASAP. This is especially effective when there are projects coming due like new installations, etc.

Collaborate

Using tools like Microsoft Teams or Slack can help your management teams share information and collaborate between each other.  These tools encourage group chats and information sharing without a big administration task.

Operations is hard. As the team is making an impact on open issues, more issues are coming to light that need to be solved too. By keeping score of the issues identified, empowering your team to communicate effectively, prioritizing resolving issues and being 1,000% prepared for tomorrow, your operations team will be able to use the technology available to improve your business. 


» JOHN HICKEY co-founded Tech 2 Success in 2014 to provide cloud hosting, OptConnect connectivity for micromarkets, OCS e-commerce sites, Internet marketing, website design, and operations improvement and IT consulting to vending, OCS and micromarket operators of all sizes. Tech 2 Success also provides support for several manufacturers and payment system providers. Prior to forming Tech 2 Success, Hickey served in executive roles in IT and operations for several vending operations. He led a diverse team of IT and operations professionals to achieve unmatched service metrics, inventory and cash accountability and data intelligence by developing and implementing a remote monitoring and dynamic routing system that was just a vision at its commencement. Tech 2 Success is online at tech2success.com.