General Equipment Reduces Non-Value Added Time for Technicians through Process Improvement Tools
General Equipment
General Equipment (www.genequip.com) is in the business of selling, renting and servicing of heavy equipment to agencies and businesses engaged in construction, mining, oil exploration and municipal services. In addition to sales and service of heavy equipment, General Equipment manufacturers equipment for aggregate processing customers.
Starting out in harsh economic times (1984), General Equipment has succeeded in building a regional organization of over 230 full and part-time employees working from nine locations in the northern Great Plains. The privately owned company is headquartered in Fargo, North Dakota.
General Equipment has been quick to recognize that continuous improvement is essential to their growth and development. They are committed to building internal capacity in continuous improvement. They are a founding member of the Red River Valley High Performance Consortia – in order to share best practices and accelerate their growth, learning and problem solving with other like-minded companies.
Employee Disruptions
One of the major ways that General Equipment supports customers is through the services performed on equipment and done by their technicians in their shop locations and in the field. These technicians are highly trained and represent a high value add in their work with customers. Any disruption to their work negatively impacts the company’s revenue stream and its ability to meet customers’ needs on a timely fashion.
General Equipment was certain that their services could be greatly improved by ensuring they had the parts needed to support service and that non-value added activities were reduced in order to help technicians better carry out their jobs. They didn’t know quite how large an opportunity this was nor how best to address the problem. In addition new perspectives within and outside the company would help them identify new ideas and how best to implement them.
General Equipment has had several staff participate in Lean Enterprise Certification Programs (LECP) with Impact Dakota. One of the features of this program is to design a significant improvement project hosted by one or more of the participating companies. As a result, General Equipment committed to a project tailored to improve the parts availability within their service operations. In addition to General Equipment staff, other LECP participants from other manufacturers would assist the project. A Impact Dakota Senior Business Advisor – Reza Maleki, would facilitate the improvement project with General Equipment project leader – Ann Pollert.
LECP, A3 Planning Tools, Problem Solving / Root Cause Analysis
The current system and all activities related to getting parts for and to service technicians was assessed. Surveys were conducted to determine what the major problems were in getting parts to those technicians and root causes were identified for those problems including (1) finding that the company had no standards in place for service parts delivery, (2) company departments had not communicated with each other very well about the process and (3) there was resistance to change.
Using the A3 tool and other problem solving tools resulted in the developing a new process flow, new process responsibilities and an implementation that would free up service technician valuable time – versus finding or ordering parts. Getting a team to work on the project from the impacted departments along with the “fresh set of eyes” provided by LECP participants from other companies helped General Equipment identify new ideas and opportunities to help them solve their problem.
Increase in Potential Revenue by Technicians
As a result of the improvements made by this two day focused improvement project, General Equipment will be able to greatly increase the parts availability to meet equipment service demands while also increasing the potential for service revenue as technicians are freed from the non-value added time of hunting down parts and/or being engaged in ordering parts.
As full implementation is completed in the future, a conservative estimate of four hours of non-value added time will be available to each service technician weekly. Converting this technician time to billable time will result in an increase of $500,000 annually for 20 technicians.
Customer satisfaction with General Equipment improves as they experience much less down time with the equipment they need to operate at full capacity to get their work done. As a result of greater customer satisfaction, overall sales and rental revenue with existing and new customers General Equipment makes should increase. As a result of these positive impacts, General Equipment looks to implement similar improvements in all of their service facilities.