Back in October I promised to update you on where we ended up with our Rapid Improvement Plan (RIP) to eliminate trips to Lowe’s and Home Depot. I’m proud to announce we reduced wasted trips by almost 50 percent (with a company-wide payout to boot). We’re back in January to do it again. This time the mission is driving down “go back” trips. You know the kind I’m talking about. Some little issue forces you to roll a truck back to the job site and you can’t bill for it. So frustrating!
Related: Rapid Improvement Plan
Doing the job right the first time accomplishes so many great things for us personally and professionally. It’s tremendously satisfying to complete a task properly and know it’s done well. Customers love it and tell their friends. On the flip side, finding out something was left undone or we installed a problematic piece of gear produces nausea. Clients hate it because it means we have to come back and invade their space. Nobody profits from a botched job. Our company spent 280 hours during Q1 2018 going back to fix jobs that should’ve been done properly the first time. We value each hour (conservatively) at $115. That means we lost over $32,000 in the first three months of last year. If we average that out across an entire year, that’s over $128,000 in potential profit we could be recouping!
We realize that we’ll need to allocate some time to go back to jobs, but 280 hours per quarter is a good target to begin with. We set up a tiered payout plan similar to October’s RIP where each person in the company can share in up to 20 percent of the savings. For example, if we’re able to save 140 or more hours ($16,100), we’ll payout $3220 at the end of the quarter. The great thing about this incentive program is it’s completely self funded. If we don’t eliminate any waste, no payout.
It’s going to be interesting to see how the hours shake out as we start to review them closely each week. As we reviewed our Home Depot and Lowe’s RIP, patterns began to emerge and we were able to quickly respond by equipping our installers with extra screws, drill bits, etc. based on the trip receipt data. We’ll be doing the same review each week, though I’m sure some different antidotes will emerge. So far we’re guessing that training, better engineering, and communication will probably surface as early needle movers.
Also by Henry Clifford: Hands On With The Qolsys IQ Panel 2 Plus
One of my mentors said problems in business come down to people, process, or product. Now that we’re focusing heavily on return trips, I suspect we’ll find most of our issues lie with process and product. We have fantastic people and can easily tweak our processes and product selection to cut down on return trips. I’ll be sure to update you in April when we wrap up this RIP. I’m excited and can’t wait to see how we do.
What causes most of the return trips in your business?
Stay frosty, and see you in the field.