Spending Too Much On Fuel?

As the price of fuel has skyrocketed in the past decade so have the operating expenses of field service companies. So much so that fuel costs now make up a substantial portion of those companies’ operating expenses. Having to travel 20 miles to a job site could easily cost $16.00 in fuel and the round trip $32.00. If the job generates $300.00 in net profits it means that fuel accounted for nearly 11% of your job costs.

Now let’s say the technician did not have all the parts for the job, or does not have the right skill set for the job, or the time needed for the job was not taken into account and the tech will have to return for a second day; you could end up with 2 trips which now brings fuel costs to $64 or almost 22% of the job costs. Imagine if the job was 30 or 40 miles away…Fuel could eat up 44% of your profits. While the price of fuel can be easily figured out we need to consider that travel time also involves labor costs and vehicle wear and tear.

In the service business there are a lot of unexpected events which will have an impact on your profitability but none of the examples above should have been unexpected. The parts needed or potentially needed should be with the technician the first time he goes. The technology to be serviced should be identified and the adequate technician(s) selected, and the time needed should be accounted for when scheduling the job so you don’t dispatch someone out at 3pm for a 5 hour job.

A good dispatcher tries to account for these situations but without a proper decision support tool he or she most likely will be unable to. And those cited situations are only a fraction of the things to consider. Used properly, a good decision support tool can save you thousands of dollars each month if you are a small group of 4 or 5 technicians so imagine if you have 10 technicians, or 20 or 50 or 100? You are now talking about reducing operating costs by tens of thousands of dollars a month. Here is the kicker, fuel is but the tip of the iceberg and the examples above as said before are but a fraction of the events your team has to deal with on a daily basis.

So next time you look at your P&L don’t take the operating costs as a given. Instead, think of them as an opportunity to increase efficiency and profitability. Think of the opportunities and that you are most likely not alone, your competitors are in the same situation, and if you address these challenges you will have the edge over the competition.

When searching for the ideal decision support system for you field service operations, first identify those opportunities and consider the potential causes. Then, when evaluating solutions, ask the solution provider what their system will do to leverage those opportunities and how effective it will be at it. Then run the numbers to measure the value of their solution versus your goals. There are obviously other decision factors to evaluate the solution against but first things first: is this solution something that would be financially worth it and if the answer is yes then assess the features and functionality versus your requirements. If it is not financially worth it then you can eliminate them from your list and focus on those providing you the best return on investment.

**Terminal Business Velocity is a top tier provider of Field Service Management and Decision Support systems. Our mission: cut your operating expenses down by up to 45%. Contact us at 866-563-7579 ext 4

Copyright © 2014 Terminal Business Velocity, Inc. All Rights Reserved.
Home  |  Contact Us  |  Terms of Use  |  Privacy Policy  |  Website Map