Bill Pyles joins us for this Candid Conversation on the Service Department Organization

Well, it's a long story, but I'll try to keep it short if it's at all possible. But yes, when I got out of high school, I joined the Marine Corps. It wasn't in the cards for me at that point in time. So I did the next best thing. I thought, join the Marine Corps to learn a trade. and be a productive member of society. So the Marine Corps put me into armament repair, which was Amtraks and tanks. And for the most part, I just think construction equipment without a bucket or a blade, rather a machine gun or some kind of armament on it. So I had a very good time in the Marine Corps repairing heavy equipment. Raised to the rank of E-5, Sergeant E-5 was responsible for several platoons of tractors. And when I was discharged, I went knocking at the local cat dealer's door. And all that Marine Corps experience got me a rock bottom apprenticeship position, entry level technician at the local cat dealer.

So, yeah, there was some ego checking that had to be done. But I did it because I was fascinated with the Caterpillar equipment. And back then, if you work for a cat, that was a badge of honor. That was the pillar of the construction industry. So they had an outstanding training program and apprenticeship. And I went through that. So I went to, I started and used equipment. Then I got the chance to get into the main shop. The main shop, I went into a service truck for a few years, about seven. Then I became a shop foreman. I was a service manager. And I capped that off, became general service manager of the entire dealership. Five locations, most of all, Northern Illinois. Pretty proud of that, starting entry level. So I would love getting in front of new technicians or go to the tech schools and let them know that you set your sights high. Don't just want to be the service manager because some potential and drive.

You can rise to the very top of that dealership. And once you've accomplished that, you can take that anywhere. They can't take their training away from you or your attitude or your desire. And so from there, I moved on to a couple other dealers, always in. product support management, fat parts and service. And then it all ended up with me coming to Florida and worked for Nortrax, which was the John Deere dealership. We had 56 locations in the U.S. and Canada. And I worked my way there to become the vice president of service for the entire company. And that was the pinnacle of my career. So I thought it's not too bad of a... of a sergeant getting out of the Marine Corps and work starting in a wash rack at the local cat dealer and being an entry-level technician.

Yes, yes. I worked for one of the largest Komatsu dealers in the country, a very, very well-run family business Komatsu dealer. And I... went there and became their general manager of product support for several locations in Pennsylvania and West Virginia. And just about before I left, they also bought the Komatsu dealer up in Buffalo. Now they're pretty heavy up and down the East Coast. And so I spent some time there as well. So I've hit Caterpillar, Komatsu and John Deere. I believe in the business so hard. Both my sons are in the business, and they've been doing very well at it. So it's a family affair. One works at Deere, and I was at Komatsu. So it made Thanksgiving a little bit more interesting.

Sure does, yeah. My one son runs like a deer, stickers, and he modifies the letters to say something. different, but he loves to, you know, throw some on his brother because he's the cat guy, you know, and Joe doesn't let up because he's the deer guy. So it's almost like I got a picture of the boys when they were small in the Confederate uniforms, one gray, one blue, and they seem to go that way.

Yeah.

I do. I look at small shops and too many times the service manager at best may have an admin, a clerk, if you will. But the first problem with some of the smaller branches of service managers, we all know, he's also the guy that if the AC quit working, gets the phone call. If there's potholes in the parking lot, he gets a phone call. If the fence fell down, he gets a phone call. So a lot of your service managers, and especially in smaller branches, are big time jack of all trades. But I like to see the service manager, he could handle three or four guys very easily if one of those guys was a working lead man. Now, I start with a working lead man position, and I expect my expectations were 60% revenue, which is obviously maybe not even breaking even with that text time. But I believe in having that lead man on the floor because in my early days, especially the hotter the weather. And this is human nature. I did it myself.

The mechanics will find every reason to stand inside the office to talk to the boss or walk up to parts to get a part or be somewhere out of the bay. And I used to think back then, to your credit, the dealership you worked at did it. Too many dealerships, especially in service, if it's a direct expense, it's like poison. We don't want nothing to do with it. But too many managers, in my opinion, don't think it through because you look at what one tech can generate for you in a year's time. I think in the last one I wrote it, if you're at 135 with an 85% revenue recovery and you got five guys, you're like about $1.2 million potential revenue in your service department. So that's a lot of money. And I agree that the more that tech is out of that bay, the smaller that number will be. So sometimes the trade-off. of a working lead man is beneficial.

Then once you get to six to seven, eight, nine texts, then you probably should have a shop foreman or supervisor. I know people call them one or the other, but a shop supervisor and a service manager. The shop supervisor, I'm trying to elevate the service manager if he's truly the service manager. And he's responsible for doing forecast, customer satisfaction, CapEx tooling, the basic overview of the fleet of trucks. That lets him think about the truly big things. And even in a smaller branch, thinking about those big things can save a lot of money. When the big things start falling on the back burner, then your expenses start creeping up and everybody wants to wring their hands and say why. So if you've got a service manager. a shop supervisor and a working lead man on the floor.

I like the working lead man on the floor because there should be very few exceptions where that tech's going to have to come out of his bay to go into this office for anything. He goes to the working lead man. The working lead man will take that problem from him and he'll be the go-to guy to go get a solution or an answer, whether it be a parts not there, it's supposed to be in or tooling. And then how many times have we seen there? It's a rental machine. We're constantly swapping buckets on little backhoes. So you end up with two guys over there changing the bucket and it's not really good use of the time. It turns into being a little bit of a BS session. So that working lead man should be the guy that hops on a machine and handles the controls. Let's say pins the bucket. Boom, that one hour flat rate does work now. You can do that in one hour and move on. You'll have the whole article, I think, in your quarterly service.

It goes on up to about 10 or 15 texts. And the people you probably should have in place, and I mentioned a technical communicator. Technical communicators are key because I have worked at a dealer where everybody had access to the OEM technical communicator. And that just created a lot of problems. And I use the example that stuck with me forever. One tech actually turned into case that the machine is overheating and the customer is very upset. What's that guy at Cat or Komatsu or John Deere going to do with that other than send it back to somebody, take more time, and then it's phone calls and trying to get more details. So I'm a big advocate. of either having your one single point of contact, your technical communicator, because then he starts to learn how to gather problems and quantify them. And here's the real key. One of your branches may have came across that problem already.

So instead of that tech over in this branch calling the OEM, he calls the tech to communicate and go, oh yeah, we've seen that before at the other branch and here's the solution. And great, you're on your way. At the end of the day, it's all about turning the customer's machine around, repairing it correctly and getting it back to him. So you have that single point of contact. But I realize some dealers look at that as a large expense and they don't want to bring that person in, which I would strongly recommend not doing that. But if you do decide to let your own technicians call the OEM, and I've worked with dealers that did that, then by all means, create some kind of a format that that tech doesn't pick up the phone until he's got the make, the model, the serial number, the hours. He has looked to see if there's any product updates or somebody has. See, that's not good use of the text time.

That's probably not good use of the working lead, man. That may go to the shop supervisor. But make sure there's a check sheet before everything is, before anybody picks up the phone and calls the OEM, you've done your homework, and now you can call and try to keep, get an answer in a timely manner.

Absolutely. And with technical communicators. Larger dealers I've worked at had two or three actually on staff, but mid-sized dealer, one is usually good enough. And it's true. I had the same concept when I talked with customers. We discussed the charging, and it was always an issue because I personally walked into the service department, and the service manager's there, and he's on the phone. He's rolling his eyes in the back of his head, and he's trying to explain to a guy the difference between deaf and antifreeze. And it's like, Why do you spend your time doing that? Here's what I found out. When I was a shop supervisor, I would get a lot of those calls. A lot of them are simple. Hey, what weight oil did I put in my hydraulic tank? You know it off the top of your head,10 weight or whatever. High guard, and you're done and gone. But when some of these guys would call in, when I was busy, the customers I'm dealing with right now came first.

So I would ask for the person's name and phone number, and I'll call them back. And more often than not, when I called them back, it was another dealer or it was a broker or it was somebody. Probably what this used to irritate me more and more, shade tree mechanics. And I mean, no disrespect by saying shade tree, because I've pulled many engines underneath the shade tree myself, not being derogatory, but usually they become somewhat popular because you don't want to go to the dealer. They charge you too much money. Okay, well, if this guy wants to spend this, so a lot of times when I'd get the call from that rental mechanic and I knew the owner or I knew that I would call them back and say, hey, this is Bill from CAT or whoever. And your guy called about a question. I got the answer for you. And so I'd make him know I'm there and really try to help him out.

But also it kind of bust him on the fact that, you know, if you want to go that way, that's what you've given up. And quite honestly, I don't think dealers charge too much. I religiously take my cars back to the dealer because the labor rate may be high, but if they're on top of their game and you get it back quickly, I mean, you know, we can all play the numbers games with contractors and how much they're losing when that machine is down. So a lot of times when you're nickel diving over an hourly labor rate, it's not worth it. But giving away free information and worst case scenario, and I've had it happen to me. You give the guy the wrong information, he breaks something. And next thing you know, he wants to call you up and have your field guy come out and fix it. So you're right. That's a very good idea. You start walking down a path where it gets very complicated. Most people will, okay, just to get off the phone, you know, he didn't get it.

But on that same theme, we would have a couple trainers in service. And again, trainers, God bless them, but usually when it gets slow. They're the first to go with the oil lab people. All these non-revenue generators are the first to hit the door. But what I did, one dealership, I couldn't get guys to sit down in the summertime. My service managers would scream bloody murder, but we would line up a nice class, maybe have the OEM come in. And that Monday morning, three of the guys aren't there because the shop got busy or the field got busy. So we tried to do most of our training in the northern part of the country. In the winter and fall. In the summertime, we offered contractor training. And I remember having a discussion with the dealer principal. Why would you want to train the contractors to do your job? I go, I don't. I want to train them to know enough, to have enough information. It is time to call the dealer.

You know, so we would deal in basic electricity, basic hydraulics, and just basic functions of the machine to make them knowledgeable of their equipment, which is a good thing because we, want to make customers but then the emphasis on the point that when you get to here like when the hydrostats first came out years and years and years ago if you've got to pull that valve cover off the hydrostat machine you should really call the dealer because chances are you're going to do more harm than good but it's just the the outside type repairs and customers loved it and you wouldn't believe i guess i was so i don't know so used to undercarriage to me it was just bulwark undercarriage. There is a real science to how that undercarriage works on that machine and how to get the life out of it. Like when I came to Florida, when I was in Illinois, if a customer didn't get $3,000, $3,200 on a turn, he was looking for policy consideration.

I come to Florida with the sand and everything in a coral. If they get 600,700 hours before all the changes in technology, the world of turn thing, which is in the... Deer came out with their, they called it Armadillo assist SC2 with the hardened bushings. So I made a lot of good customers, even better customers by going out to them and having an undercarriage seminar and especially keeping the track tension where it needs to be. And that builds good faith between us and the customer. And it was something I thought, well, this is so simple. You know, I don't mind sharing this with a customer. I think it's in good faith. You buy my equipment. I'm going to do everything I can to make sure you're happy with it. And that means sometimes for you to be happy, you've got to bring it to the dealer and pay that maybe a little bit larger bill because you're going to get it back and it's going to produce for you. When I was in the field.

Absolutely.

Yeah.

Yeah, you're absolutely right. And that has happened. Once I got to be in general manager orbit, I got to go to a lot of those dinners just because I was general manager, executive management level. But I remember more than once, one time it was so appropriate, the theme of the sales meeting, everybody got a pin with a, like they cut out of a puzzle piece. And everything was, don't be the missing piece or we're all interlocking. There was some theme with these puzzle pieces. And I remember we were in the meetings discussing this upcoming sales dinner. I did ask the dealer principal. I said, well, are any product support people going to be there? And it just seemed so foreign to him. Why would we have product support people there? And I said, well, I'd like to think that they actually contributed towards this really killer year we've had in sales. And boy, do people in product support really like to hear it.

And I don't want to beat a dead horse, but, you know, I've seen it early on. You know, your product support, that's why I'm so passionate about product support. They're your first people that come in every day. They're usually the last people to leave. You know, they may sell a $250,000 powertrain rebuild, but what do they get for it? Maybe, hey, great job, but they didn't win a contest. And they would always hear about salesmen. Oh, yeah, he sold two loader backhoes, so now him and his wife get to go to the Caribbean for a week. And it's like, what? So it's very important. I would have to say the success, the really good dealers that feel good to work with, and we always hear about silos, silos, silos, is when those disappear and those disappear when upper management starts treating all the players as really well-needed equals, and we all contribute to the health of this company. That's why I go back to Confessions of a Service Manager.

You know, Ron, when I pull that thing out and read it, it was written in 2002 or 2003 for the A &D Magazine when our friend Matt Diorio was there. And because I was talking about him about it one day and we both worked at Patton for a while. I read that and I talk to other people. Some of that stuff is still going on. And I just shake my head that, wow, after. 30,40 years, we've progressed so much with technology and training and the availability of training. Now a lot of it's online, so you don't have to get up and go places. I mean, it doesn't seem like either A, they're taking advantage of it, or B, they're not practicing it because they'll still be swapping labor around or back charging a sales department for something they shouldn't. There's always that animosity between sales and service. And I understand that. I get it.

If the sales manager is looking at his P &L and he sees these huge expenses coming back from the service department, I'd get a little hot, too. Because, number one, we didn't even treat him like a customer. And a lot of times they don't even know these expenses are coming. Machine comes back in on rent. Well, it's all busted up. And, well, someone should have stopped and called the customer and his rental damage. But you're right. Upper management needs to recognize the contributions. They do. I'm not saying they don't. But if they all got treated on an equal playing field, you can reduce these silos. And when everybody is on page, on the same track of dealer health, dealer profitability. But I got to admit, when I was a service manager, I saw one P &L, the service P &L. It didn't make a damn bit of difference to me what the other guys were doing because I'm either nailing it. or I'm losing it, or I'm whatever.

And the biggest thing is once I finally became, had responsibility for parts, when I went to the other dealer, Anderson became general manager of product support, I started looking more at the parts. And I realized why parts managers get upset when you return non-stock items, why you overnight them in and you don't need them. They see them sitting in the corner for a week later. That gets back to why you're a parts expediter. If he works for you in service, you can tell him, I don't need these right now. So bring them in the cheapest way possible, the least expensive. I don't need to overnight them. I've worked in dealers where every back order for service, everyone automatically was overnight. And it may be a large, large job that you don't need. But those expenses wasn't hurt getting my P &L. Normally I wouldn't worry about it. But then I started seeing how, oops, this all comes together.

That's how you start eliminating the silos is you need at an earlier phase to get your service manager and people involved in the health of the dealership and where the money's coming and going.

Yeah. It's too many times. I think the unscrupulous service department, they don't know it shows up as an expense over here. They're doing what they think is the right thing, just keeping other guys busy. I can remember the day I had a service manager. Walked me out to the backyard and said, you'll never, ever have a minute of lost time or non-chargeable time, whatever you call it at your dealership. We called it lost time, non-chargeable. And I said, well, how am I going to do that? Well, there was a fleet of machines. This dude had a big yard. And he said, there's probably something wrong with every one of those machines. So I didn't feel good about that at all because I quickly learned. I became. somewhat friends with like the dealer OEM. Our cat rep was a great guy. And I quickly learned that as soon as they think you're trying to zoom them on something, you're cut off. And we all know there's black and white and gray.

And I feel very, very proud of the fact that I was able to cash in on some of that gray area because I had a relationship with the OEM and he knew we didn't go out in the backyard and find all these warranty claims back there. just to keep techs busy. Sometimes people don't realize your reputation and dealers have been canceled over stuff like that. I mean, I've tried to let my boss know in some places I've been where they're maybe not aware of it or they've never read a dealer agreement. I said, you own the property and you own the building, but the OEM owns that sign and your business. So, and I know I'm rambling.

You had about 12 points. I go all over the place.

And he said, sir,

Yeah, yeah.

I started up a lot of PM programs at dealers. And I can remember working at the dealer when the PM concept first came up and i remember actually thinking that customers aren't going to pay us to come out and change their oil i mean they don't want to pay to come out and and actually fix something they won't change oil they're going to hire some guy and blah blah blah but so i remember the dealer we started out with a trailer and then the guys kept bending the neck on the trailer and the mechanics hated pulling the trailer to a job site and it was a pain so we finally bought a pm truck well needless to say pm is a big business now you're absolutely right And I went through the same thing too.

And I would sit down with a customer because I'm convinced that the machine gets maintenance done properly and on time, it's going to have a probably a little bit longer life than otherwise I'm going to be talking a policy consideration on a 3000 hour transmission because something wasn't done or whatever. But sometimes, especially the PMs, I would challenge the customer. Now, hopefully you're going to use OEM filters and fluids, which. I'm a firm believer in that stuff too, because I know it's made for that machine. But the customer says, I can go to NAP and get the filter cheaper and I'll tear those arguments up all the time. It's either a different micron rating or there's something why it's less expensive. So I would tell them if you're buying the filters and you're buying the fluids, the labor is actually your cheapest part of that equation.

If I have a M-Tech come out there and he does the inspection, plus pulls all the oil samples. And then once we get you signed up on the program, if we see something that can perhaps wait till the next service, then we can bring those parts with us. You don't have any more downtime. Or the PM guy may say, yeah, there's a serious leak on this thing. Now you can schedule that downtime. And that's all the touch points of a customer. And I used to love doing because if you can save him the aggravation of unexpected downtime, we can get it scheduled. And you can show him that you buy the parts. Our labor isn't that expensive. It's not a bad deal. And several dealers now have really, really good PM programs now.

Oh, yeah.

Oh, yeah.

Yeah, you're absolutely right. And that's what I really enjoyed more than anything when I got into upper management is all the ways you have the time, if you manage it correctly, to figure out the ways that you can honestly provide value, as you said before, add value to the customer, keep him happy, keep the longevity of that machine there. Because when it does get time to bring it home, he's probably going to come back to you and trade it off. My phone just rang and just threw me all out of whack.

Yeah, there you go. See, that's what I got. You off the phone with the customer. It's a perfect illustration. But I had responsibility during my career at one time for the oil lab, and I just found that fascinating. And all the, you know, oil is not oil. And so I would go to the manufacturers, which they're kind of stingy with their spec sheets. I don't want to see your promotional flyers where your oil lasts forever and it's great. And it's made out of unicorns and pixie dust. I want to see the spec sheet on your oil. I want to see the pour point, the flash point. I want to see the additive package. Because when I used to work at the cat dealer, I truly, it was frustrating. I'm trying to help a customer. Bill, your oil is too high. I'll never buy cat oil. It's too high. Who are you using? And then he would tell me, and I got very well versed on this. And most people don't know the number one oil is not regulated by the federal government.

There's the API ratings, which is just a group of people. It's not government regulated. And I got really educated on it that if you brought a 1040 oil to the market, there's a picture of this big window from here to here. And when the API rates your oil, you can come in here or you can come in way here, but you're still in that 1040 window. So that means I can come to market with a lower quality oil, with a smaller additive package. It's not going to last, you know, all these things and sit down in front of you and say, well, yeah, why should you buy cat oil? Because I've got the same 1040 oil for a whole lot less. But when you as the dealer can use facts, I love facts because it takes the emotions out that, well, okay, but you're getting what you pay for here. And I'm trying to give you some longevity.

And like you said earlier, if you've got a customer doing PMs or even if he's doing his own, but if he's using OEM fluids and filters, he's doing everything right. The OEM and the dealer is more inclined to make a policy consideration when something does fail and it did just go out of warranty.

Yeah, yeah.

My guideline was always at the end of the day, your shop supervisor should be on the floor. several times a day. And towards the end of the day, he should have a good idea, but you ask every technician, where are you at with this? And because someone needs the information too to contact the customer. Now, I like for the service department to call the customer pretty much every day if progress is being made. But if the machine is sitting there for two or three days waiting for a backorder part, sure, don't call the customer and say, well, it's still backwards, still backward. And I think they're aggravating. But you're absolutely right. If that technician can finish the work, and my golden rule is an hour, and depending on the customer, I'd stretch that one way or the other. You're absolutely right, because if you watch your techs in the morning, a lot of times it's slow getting started.

You know, they're by their toolbox, and they got to unlock things, and they got that cup of coffee going and got to go to the tool room and get some more shop towels or do this or get the tooling that they had to turn in. Well, by all means, invest that time. And I used to. When I would even quote work orders, if I thought, and you touched on that earlier, I do believe almost everything without exception should be quoted when it comes into your service department. And it takes away that hourly rate thing. Contractors bid their jobs as well with performance bonuses. So that's nothing new to them, but giving them a cost. But what I would do if it was a small job, I'm like, you know, it's going to come into your shop and you know, it's only going to be like eight hours or so. quote the guy 10, because you're going to tell me you're going to put two hours of overtime or just leave it in a quote.

Because if your straight rate is 150 and your overtime rate is 180 or 190, whatever it is, that's only $40 more you're charging. People look at the entire dollar amount and go, oh, I can't stick that in. I'm going to quote you the job. And we always put an hour or two of overtime in there. If you need it, great. If not, then you got something you can either give back to the customer or find something else to do that it needs. But by all means, everything should be quoted all the time.

Well, if you're a service manager, you do need to be educated in some financials. Again, there's dealers that they call the position service manager, and he's kind of the shop foreman. And then there's a service manager that does generally sit in an office away from service or whatever. But they should learn the financials, never quit training. themselves and more importantly their technicians. I used to run that get a rundown of all my texts every month and see who was doing any training and you didn't want to be the guy that was doing little or no training. They'll never be your best text. So that training goes all the way from entry level tech up to the product support manager. There's materials that they can use. Never take your customer for granted. Always follow up with a phone call. All the things that you say we're too busy to do are probably the very important things you need to do.

And I've seen them want to make, they'll make phone calls when they're not busy because it's no problem. When it gets busy, we quit doing it. But that's the other goal. If you break the consistency, if the customer knows he sends you something, his expectations are you're going to keep him informed, you're going to give him a quote, you're going to live with that quote, you're going to have a happy customer. And then when the job's done, car dealers do it for me all the time. Someone has the time to call up and say, Mr. Piles, follow up on a repair. Were you happy? Did you leave the car? Was it clean? And I feel good about that. It tells me we care. Yeah.