Service Company Do or Die

All services companies should develop a Lifecycle Tracking Application that is established from an operational (process) diagram. Without one their company will eventually die off. Either from the loss of an individual who knows all the secrets or from the business growing too big and there is no one who can duplicate the success of the past in new areas.

An operational diagram takes every single thing that happens in your company, connects them with all parts of the company, and includes all relationships and requirements. When I speak of breaking a company down into the elemental structures (incremental little bits) this is the exact methodology I use. Engineers use these in their system drawings and rely on them to keep a detailed view of all interconnections.

For a service company, and most other companies, this is important because of all the different people touching different parts of the company. Even if a software package is not created that allows a single system to have complete overview of your company the details pulled out in an operations diagram will allow all stakeholders to see exactly how they impact everyone else in the company.

I have helped companies put these types of diagrams together. Many a day was spent on a drawing board helping each entity map out their processes and finding where these processes connected with other entities and tying all flowcharts together until there was a single chart that mapped out the processes for an entire company. This may sound difficult but it is essential to start this process as soon as possible as the difficulty will only grow down the road.

As an example, I worked with a company that provided fleet vehicle preventative maintenance services for commercial companies. This company started by providing services near their location and would develop a relationship with a national customer who would ask if they could provide the same services at other national locations. Soon the company was working in ten states providing these services to national clients. They were bringing in a lot of money but never seemed to have any. There was a single operations manager who was running the show and had a good handle on scheduling to keep his trucks always moving but there was no real understanding of the entire process, what was impacted with each decision, and what the actual costs of doing business were. To uncover their problems I was brought in to produce a good systems map (operational diagram) and help them find out the cost of doing business. They also wanted to keep expanding their business but wanted to set up more offices for people to help in the process.

Conducting my study I met with every employee in the corporate office and simply asked them what their job was and what it is they did. I took all of these interviews and created task breakdowns with the current person/position conduction each task. These tasks were put into an overlay where I was able to determine where each task connected with other tasks either through a direct relationship or a feed and response relationship. Duration of task based upon competency was factored into each task breakdown. Everything from marketing, sourcing, sales, scheduling, materials management, logistics, project completion, quality assurance, accounts payable, accounts receivable, payroll, HR, finance, project controls, reporting, and administrative support is placed on the operations diagram to ensure that all relationships and activities were tracked. A graphic chart is created that is defined by a process instruction that defines the details of each step. From this work breakdown structure we can then allocate tasks into functional areas and define personnel requirements based upon actual work requirements. Policies, procedures, work instructions, operation manuals, training programs, and everything that helps a company run are then created from the operational diagram. Any new process that is introduced and inserted into the operational diagram and is easily connected to all other related tasks.

Once the operations diagram is created you can hand this to a software engineer and they can create a tracking system that enables the owner to track the status of all individual tasks, identify how long it takes to accomplish each task, and use reports to monitor applicable metrics that establish the health of the system. This allows a manager to build these same exact systems again, and again, and again while keeping an eye on the overall efficiency of the process.

With the company who hired me to find out where they had issues it was discovered that their pricing structure developed to cover their expenses for local customers did not cover the costs to push technicians across ten states to provide these same services. As each step was tracked and costs associated it was determined exactly how much money was being spent to send technicians to each location and minimum guaranteed work requirements were established with the customer. Previous attempts to increase the rate or set volume requirements were not successful because there was no data to present to the customer. With the new data showing the costs to perform the maintenance and showing the break even points and the “worth it to come out” points the national customer agreed to pay the higher rates as they wanted to keep the same level of professional services. The company was also able to use the information loaded into a sales program that gave the field sales team the ability to factor cost based on location, type of vehicle to be serviced, and type of service ordered. From this a guaranteed minimum would be able to be met for each new client and the company would be able to stay operational. Through management monitoring of the process they were also able to determine a more appropriate work distribution for the staff as well as let some people go and hire people who had the essential experience completing the requirements.

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