In 2016, Valley Truck & Tractor achieved a parts and service absorption rate of 106%. According to the Western Equipment Dealers Assn.’s (WEDA) 2016 Cost of Doing Business study, the farm equipment industry average absorption rate was 64%, with an industry benchmark target of 80%-plus.
Valley’s sales of parts and service last year accounted for 39% of the dealership’s total revenues — service 11%, parts 28%. This compares with the industry average of 33% (service 7%, parts 26%).
Despite the exemplary performance of its service department, the 9 store John Deere dealership group plans to continue fine tuning this area of their business.
Chris Cardoza, Valley’s chief operating officer, says the company is taking a deep look at how it might increase the service department’s efficiency. “One of the things we’re working on right now is long term capacity planning. This involves studying historical values to determine the volume of work that comes in. For instance, we’ve gone back 5 years to determine on average the number of work hours that have been required on each of the facilities. With that, we will determine the number of people that we need within those. A lot of flexibility is required in service. We have in-house technicians and field service techs for mobile service. We also have, what I’ll call a SWAT team,” he says.
“In this way we can deploy techs to those areas where we have high service requirements and move individuals in the team around to the various stores as needed. This requires us to have a couple individuals who are not necessarily pegged to a specific facility and help us balance the service requirements throughout the group,” Cardoza explains.
With the technological changes in farm machinery that are rapidly emerging, he says another important area that needs attention in the dealership’s long range planning is the type of technicians that Valley needs. “We have a wide range of products to service, from push lawnmowers to riding mowers to large agricultural products. It’s becoming even more important for us to recruit and hire techs that are able to respond to customer needs.
“For example, do we need people who focus on smaller equipment and others who specialize in large equipment? Then, can we develop technicians who are flexible enough to service whatever comes into the shop?”
Developing the “pool of service techs” is a program that’s still in its infancy at the dealership, but Cardoza adds, “We’re embracing this approach.”
He says John Deere is putting systems in place to help dealers schedule service work that provide a lot more visibility. “It helps service managers to see where their people are. So if a call comes in and we’ve got a service truck over here and a call’s right here, rather than having someone else drive over there, the tech closest to that location makes the call,” Cardoza explains.
“Boom! They can go right over and take care of the customer quicker and more efficiently.”
As Valley Truck & Tractor brings in younger talent, Cardoza says it imperative that they have the “gray beards mentoring new folks that are coming into the organization. “Finding technicians is a difficult thing to do. So once we get them, we need to do everything we can to keep them. What we’ve found is money isn’t always the most important thing, but finding a sense of family is often a priority for them.”
What’s also important to young talent, says Cardoza, is having a career path. “One of the things we’re building out is a technician career ladder that goes from being an entry level technician, where we can determine their unique skills, qualifications, as well as training and certifications required to go from being a Technician I to a Technician II, all the way up to a Technician IV. It gives them something to aspire to and a long term goal to work toward.”