PrairieLand did $36 million in parts and another $18 million in service in 2013. A few things to note:
Standard Service Job Pricing
The company is considered industry-leading in establishing standard job pricing, with 80% of all service work handled on flat-rate pricing. According to Benny Ray, corporate service manager, there are 97,000 PrairieLand job codes in the system followed by 100 techs throughout all the locations. “It’s the key to increasing service gross margins,” he says.
Loren Balzer, director of aftermarket, says implementing standard job pricing in the shop was akin to giving a long-distance runner a finish line and a time to beat. “They see that training and getting organized puts additional dollars in their pocket,” he says. “It’s fair for the customer too — if a lesser-skilled tech is assigned to his job, he isn’t billed for that additional time.”
“Used equipment is the dealership’s greatest risk and the most difficult area to manage,” says Darrell Pankratz, director of sales. The dealership now has a dedicated remarketing manager, Casey Seymour, to oversee that area. According to Pankratz, the system works because of Seymour’s analytical view of the pieces as widgets — and without any emotional attachment. “He looks at it strictly as an asset, and it needs to be a performing asset. He has a systematic way of evaluating used equipment, examining advertised prices and actual sales prices, and is well connected with other used equipment marketers.” According to Pankratz, the system applies to 80% of used pieces, with the balance being the oddball equipment that every dealership faces.
Parts Fill Rate
Brian Koehn, parts inventory analyst, manages a parts inventory of $12 million (earning praise from John Deere for an above-average inventory), but it’s the fill rate (the percent of parts needed that are in stock) that matters, says Balzer. PrairieLand aims for an 84% level. “The better our fill rate, the better we’re managing the customer experience and having the right parts on hand at the right time,” he says.
The dealership’s early reputation with forage harvesters (where downtime can cost a cutter thousands per hour) fostered a mindset of “no one quits during downtime” that permeates the rest of the company. Wayne Unruh, forage service manager, gave an example of a tech who hit the road in the morning to get to the customer by the afternoon. “He replaced the knives when the cutter was done for the day, and worked on other machines all night long. He’ll sleep during the day today and work on through the night so the farmer is ready again in the morning.”
Added Joe Pavlovsky, salesman: “If we get a phone call today and need to be 400 miles away to get a harvester up and running in a pinch, we could go out on the shop floor, ask for help and have a truck leaving within 2 hours.” In fact, the group, which has service trucks stocked with $50,000 of parts, sends two techs to the Texas Panhandle for a week at a time to make sure the cutters are ready to go.