Productivity Tip 25 Keeping Costs Down

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One of the major challenges facing any business is the need to minimize costs in order to enjoy healthy margins while remaining competitive. This is particularly so in the service industry.

Customers today are usually spoilt for choice in terms of service providers. Customers look for service providers who can provide reliable and good quality service at a reasonable price. While quality of service is a top priority, quality service delivered at competitive rates is a winning combination i.e. more for less.

What are some of the causes of cost overruns in a service business? Here are some common ones:

  1. Lack of discipline in the labour force. Service technicians take too long to do the job.
  2. They forget to record parts/consumables used.
  3. They do a bad job which needs to be rectified by someone else in the team.
  4. High level of wastage. Certain parts or consumables such as leftover cables can be used in other jobs if they are properly accounted for.

If you examine the above list of causes, you can easily reduce it down to one primary factor – how well do your service personnel do their jobs?

To put it in another way, best-of-breed service providers often have the following traits:

- They have competent role models in their service team
- They have clearly defined quality standards which are regularly communicated down the line both formally and informally
- They challenge their team members to keep raising their quality standards and recognize them when they do so
- They invest in regular training to keep skills current
- They have systems in place to support their service personnel in terms of timely information and provision of required tools, parts and other supplies.
- Lessons learned through new experiences are shared with other team members as well as recorded in a knowledge base system like Ostendo Operations Software, making it easily accessible to everyone in the team
- Management, administration, support, and service personnel all share a common vision of delivering service excellence at the lowest possible cost.

If you have a motivated team of service technicians who are well trained and have well defined service standards backed up by strong, competent leadership and administrative support and systems, along with everyone focussed on the same goal then keeping costs down and maintaining service quality will be both achievable and effortless.

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