From Night Shifts to Management: A Journey of Success in Construction Industry

Well, I started off at a Caterpillar Dealer in 1980. I actually was working night shift in the warehouse. And my goal was to work there long enough to find a career. So work at night in the warehouse, pay the bills, pay the rent. grocery food on the table kind of thing and I did not expect to stay at a dealership very long and then 23 years later I left the caterpillar world and went to work at a startup Cummins Komatsu dealership and then moved back to Arizona working for the Komatsu dealership there and then back to the cat to finish my career I retired about two years ago so it's been a great career We'll wait to see how the industry has changed from the 1980s when I started into where it is today and where it's going to go. I kind of wish I was a younger person that could kind of take that journey along the way because it's very exciting what's happened over the time and what we can see going forward.

I think the opportunities are there. I think the challenge is meeting the needs of the generation coming in that they're kind of like not planning to stay very long, may not know exactly what their path is, but they'll exit sooner than what I did. They won't stay long. They'll look for the first thing that comes up. And I think a big difference for me is I had a career path early on where I wanted to accomplish. I had two or three positions I targeted in within the leadership at the level and then worked my path because I had to develop my own plan. There was not a plan there. They didn't do career path thing at that time. It was kind of on your own. When I went into, so in 1980, went in for the, at that time, I had physicals done at the leadership pre-hired. You had to go to the doctor and have physical done. No matter what the role was.

And the guy says, we don't have many people coming in here for this company at the dealership with a college degree. So you're one of a few. So it really kind of showed me that in that industry, in our industry at that time, college degrees, advanced education was not really a key driver in success or promoting. It was something else. It was your job performance and doing well. And so my degree got me in the door and provided, opened my mind to other things besides just the day-to-day grind that increased my curiosity about the industry and allowed me to learn and grow from there.

Well, working on the parts side, and of course, we had to work very closely on the service side. I just found the service side very exciting. It's a constant change. Whatever you plan today, that's going to happen. Something else is going to come up. Something else machining is going to go down. And so it was kind of a combination of wanting to combine the challenge of service with parts. So that was kind of a career goal. So every evaluation I had, I want to get into service. I want to get into service. And there was an individual that provided me the opportunity to step in on the service side. And my first role was to manage a field service operation, which is as a field service manager, which was a huge change for this dealership. You got a parks guy coming to run field service. What is this all about?

Yeah, it's a blast. I would get up in the middle of the night and go out on a job site where the mechanics were working. And the same thing, put coveralls on and they'd take care of me, make sure I didn't get in the way. And the key thing, I didn't try to tell them how to do their jobs. I didn't know how to do it. That really was not my role. I had a staff, some very strong technical people that knew. how to fix machines and my job was to mesh their knowledge and experience with the objectives of the company and one of the key key requirements i always expect is change the environment we've got to take better care better care of the employees work a lot of overtime family issues at home being gone too long customer demand so find find some different solutions so we get away from doing how we've always done in the past One

Well, and so I didn't know much about the warranty side on the construction side, but I was exposed to the warranty side on the automotive industry. And that was interesting is that that is a revenue source for them. And I got the chance to visit Sewell Cadillac in Texas, in Dallas, Texas. along with a service manager I brought along to better understand how to take care of the customer better and also meet the needs of the organization. Warranty at that time was a very big thing. We're dealing mostly on the BCP product for CAT, backhoe warranties, those kinds of things with a small clientele base. So got there and their approach to warranty is that it was to be managed as a business center. There were costs involved, cost monitoring involved. You had so many hours to do a job of whatever it was, managing the parts that had to go back to the warranty claim area.

And their approach was if a service department, you have one opportunity to take care of that customer. And after that, the warranty department would address the rest. So if we drop the ball on meeting the customer's needs and warranty stepped in and made the decisions. So that took a real different view to me on, okay, well, how do we apply that within the construction business? And the objective I took is that the customer pays for warranty. And the price of that machine or they buy an extended warranty, they deserve every dollar they're entitled to, as well as the dealership is responsible to manage the cost of that that goes back to the OEM. So trying to balance that too and making sure that the dealer, the client gets what he deserves. And that kind of put us to a different focus on customer service. Use warranty as a customer service. Understand, and to me, there's warranty and there's policy.

And the warranty side of it is know what's available. Your database has got to be current. So if you get going on this machine, this repair while you're there, can you do another warranty repair that will take care of an issue that the client or customer may not be aware of yet, but can also help them prevent a downtime further down the road.

That was probably in the mid-80s.

No, I did not.

Yeah, I would agree. I think very often the warranty is seen as It's kind of filler work. When things are slow, then you dust off the list of repairs needed to be done or about to expire, and then you go knocking on doors. And that would be part of the everyday process. If you can let a client know, hey, there's an update here. This is required, or you may not want to do it or whatever it is, but the information we can give them can help them make better decisions. And it builds trust. It builds confidence. And again, I really believe that they're entitled to that warranty. And our job is to make sure that they get what they paid for.

Well, the job code and standard time, those are extremely important that on the Caterpillar side, that dealership, they had that mapped out pretty good. I mean, that was a very well, the focus was there and how that really helps not only the client and the dealer, but it really helps the OEM by properly coding those. They can go back and look at those. That repair history, we were even looking at mean time between repairs. So if you go out and do a warmth repair and you go back out on that same machine and, hey, dealer, hey, OEM, we've got this backhoe, for example, that we're out there every 10 or 15 hours, and we've got to do something. So it's really a responsibility to help the customer, but it's kind of that linkage between the customer and the OEM on. future needs of manufacturing, parts replacements, whatever is involved with that. It's extremely important to utilize job codes and component codes.

Yeah, especially if you can get on a repair and they do a walk around on the machine and they can identify, hey, your cutting edge is going to need to be replaced here in another week based on how you're using the application. You want to do it now while we're down or any of those kinds of things. So just going out and fixing that oil leak and then you leave and now he's going to be down the following week to get the GT replaced. Those are the kind of things that that's kind of opening our vision, looking around that machine and looking for the opportunities to that. That isn't really saving them anything. They're going to spend that money anyway, but it does cut down their downtime later on that provides them more productivity. in financial hips in the long run. Yeah.

Yeah, and I think some is driven because of the skill level we have in it with staff, one, and I think the volume of work coming at us. So we try and skinny back the staff, and so they're overworked. They don't have the time to do the analysis. Our systems don't pull information in fetus reports that we can make decisions. So I think there's a lot of little pockets of issues that... that prevents us from providing that kind of value back to our customers.

Yeah, we did. And we got at one point providing the field service technicians with their own financial statement.

And it really drove the technician. One, they're very competitive. very proud of what they do. And it also provides them a chance to understand the business side of that. So when you provide them a report that shows their non-charge time and they understand non-charge time. Now we want to make sure that they're not penalized on training and help they gave on coaching another technician. Make sure we pull those kinds of things out so they're not penalized because they will feel penalized if it's perceived as being negative. But those kinds of things really provides the technician to better manage their own time. If you're about to finish, wrap up on a job, then you call and say, I'll be done in 30 minutes, whatever it is, I'm ready for the next one. So we're not losing time between he wraps all up, cleans up the truck, machines ready, and then he calls.

Well, now let's scramble and see where can we put you in the next two hours left on your shift. So they learn little things that can help the office staff schedule their time that makes them more effective as well.

I think it's a good idea if you get the right flat rates and the mentality. What I've seen, though, is how some labor jobs will become inflated. So they'll add a little bit more time here, a little bit more time there to where it is safe. Not understanding that being safe is we're losing business on the other end because we've become with an inflated flat rate. Yeah. As long as those things are in there. But I think there's no reason we can't get down to a flat rate in a percentage part of the jobs. And getting down to where they're not having to enter time when they get back to the office, let's get the time entered now to where it really can be as close to immediate billing as possible.

Wow. That would be a change for this industry. What I have seen is those, the technicians working in the automotive industry, the burnout rate for those guys, because that flight rate, that eats their lunch. Yep. And so we've seen them move from the automotive industry coming to our industry because we're not quite tightly controlled on their flat rates. And there's so many things they can't control. Parts availability and getting parts to the bay. And now I've got to go back into approval for this because somebody else is not available to approve it or those kinds of things. It eats up their time. And so as long as that process works well, it's a win-win for everybody.

We as a dealership need to learn to better understand how can you apply those flat rates more effectively and not just add to the cost, but remove those obstacles, remove those barriers to a good, honest, I don't mean honest, not dishonest, but we just get where we inflate things that we really shouldn't be. It wasn't intended for that.

Yeah, that's really the way to go. To me, the shop is much easier on doing those kind of flat rates. Of course. The last role, one of the roles I was in was on, we manage flat rate on rebuild. So having engine rebuild, we provided three levels of rebuild to the client. It was a firm price up front. So this is what's included into that. Now that's agreed upon between the service side and our repair history we've had in the past, the parts list that will be used and utilizing the repair use guidelines that CAT has. to make those decisions. And then before we start the job, it's a level one, two or three rebuild, and that is your price. Now, anything above that, if it's the crank is scored or something else with that, so that's an add-on and we'll get to that as it occurs. And I think that that provides confidence with the customers. Some of the larger customers have a lot of, that made it easier for them to do business with us.

as compared to others that, well, there's always a surprise. Well, we've got to stop the job because you've got to approve this. We've got to stop that because we need approval for this. And so we saw the larger clients really actually onto that concept, and it kept their machine rebills moving quickly. They knew what their bill was going to be at the end, and it built confidence and trust with the dealership, the client, and the technicians.

Yeah, I think if you can provide the grocery list of this, this is the rebuild and these are the parts that are pre-ordered. So you're going to do an engine rebuild. It's a level one. Here's a parts list. The technician doesn't need to enter anything. those parts show up based on the level one. Now, if there's something outside that, so then he's only looking for a, you'd use the 80-20 rule, he's only looking for 10 to 20% of the parts that's not on the list because it's outside of scope. So I think that's really making that efficient is use your past history and get those flat rates for parts and labor really fine-tuned and honed in for consistency's sake. And then the technician is not entering parts very often, except there's more of an exception than it is the rule.

Yes, you use 100% of the time. Yeah.

I think we should. From a dealership perspective, our challenge is utilization of technicians. Yep. If you're a dealership that isn't large enough to have a separate lube team versus field service team versus troubleshooters, you have a mix that you're pulling from constantly all the time. So this morning, you'll have your top troubleshooting technician out troubleshooting a hydraulic, electrical issue, but in the afternoon he's changing oil. Well, that really makes it hard to get a highly compensated technician, highly skilled level technician, but yet he's changing oil and services. So if you can manage that, it has to manage with the scope of the repair. So I think the dealerships have more to learn about how to do that and utilize that variable labor rate.

Yeah, we ask my seat of the pants as the dispatcher, really the dispatcher. Well, we can send. We can send this guy. He can do this job. Well, I don't know. We ought to send this guy. This may be, yeah, we better not do that. Or, well, I have another choice. We got to send him and we'll just have to do what we got to do. But I think having that certification or evaluation done to where you get your different levels of technicians and your attempt is to sign the job within that scope of work for them that matches and you got to sign the right helper or they have someone they can call if they get into a bind. Yeah, that's part of the career path for technicians that is extremely important doing their assessments, both on the Azure assessment and then also the on-hands portion of it. Yeah, that really can go a long ways that we could connect it back to assigning of their job assignments too.

Yeah, assigning apprentices, absolutely. And the challenge we're getting into is that we are doing so many apprentice training as well. How many apprentices can you take on? How many apprentices can you, if you get a Think Big class, for example, or it could be the Komatsu Think Big class, but you've got a class graduating, you're about to put 20 new apprentices in the program. How many can you put in that shop and not impact the number of hours on the job or quality of work? So you kind of get into how do we balance the number of people we have, but assigning those apprentices, and it needs to go beyond their skill set of just turning wrenches. I really think we do what I call silo training, where we'll teach them how to do an engine rebuild, but we don't teach them work ethic. Yeah.

or we don't teach them other things that they need to do instead of providing a complete training program that includes, that wraps in safety, that it wraps in your work habits and wraps in your technical skills to provide a well-balanced employee. We'll sign an entry-level technician to a really good, sharp technician, but his desire is not to teach him work ethic and his desire is... It's really on how to turn wrenches, and it really needs to be a balanced training program.

Yeah, we had one technician, I remember he was, we also measured their age and their whip. Yeah, we had a working process and and we measured that as well. And one of the technicians, very highly skilled technician, very sharp in their long time. He came out on his performance for the month of very low in terms and it just broke his heart. He said, I'll never be there again. you and we got we walked through what's the issue well you're you're not getting your service reports turned in on time they're waiting for parts credits to come back we can't find your warranty cores so so we working through that we're able to process his work orders quicker and and but those are things that a technician they're off the next job i mean if you haven't got that locked down when they finish that job you'll never find those parts again you won't find the cores again and you're fighting the battle of where does it where do the dollars go So it can be very

successful.

Well, if you get down to hours, really, how many hours does it get that invoice done? That's really the goal is to get to, is get that into the hand of the client. They're more likely to pay that invoice the closer it is to the timer of the repair. Then if you're having to wait 15,20,30 days and now then their thing, I wouldn't know what happened with that thing. Well, by the way, we've got another issue with that because of that invoice you did or their repair you did. You got to come back and fix that first. So we had one of the first jobs when I became the field service manager. There was a client disputing a bill. It was fairly large. I'm guessing around somewhere around $10,000. Disputing the bill. He was a COD customer from out of the territory. So I met with my boss, the director of services. I'm going to send this guy a letter. And I said, OK, I've reviewed it. Here's what I think happened.

You send me a check for whatever you think is fair. And that man says we'll never see that money. And so I sent the letter off. Now, this is back before emails were very popular. So it took a while to get the mail, going on that kind of stuff. But he sent back a letter with a check for the full amount. And he said, you know, I've never had anyone ever ask me, well, you pay what you think it's worth. And it gave me an explanation of what you guys actually did. Not only will I pay the bill, but I will use you guys again. Yeah. So I think being fair and honest and asking the customer, but it isn't always about pay this or pay that or write this off, write that off. It's just sharing of information, having confidence and trust in each other.

Yeah. And giving them the tools, if you look at hydraulic cylinders, for example, or hydraulic parts or exchange parts, doing the core inspection. to determine the core value, to determine what kind of credit you issue back. Well, let's just do that ahead of time. If you have hydraulic cylinders and CAT's pretty good at it, and so is on the commodity side, you have reuse guidelines. A parts counter person with no hydraulic experience can utilize those core inspection guidelines. Use the guidelines, cut the core credit, and move on. Yep.

You're not waiting for the cylinder to go back to the shop and you've got to find time to disassemble it and inspect it. Now you've taken up time on the technician. Where do the hours go? You've got to put it back together to send it back to CAP. Use the guidelines, use the information available, and they can make the right decision if they have the right tools.

Well, at that dealership, it was a Cummins dealer that had acquired a Komatsu dealership.

Yeah, my role was to come in as a general service manager and start up the service side on the Komatsu side. So there was a really interesting, and as we know, on-highway truck business is a lot different than the equipment business. So you have a, and sometimes those don't mesh very well. So you're walking into a Cummins dealer and adapting the tractor side of the business. So we had some learning to do. It really was a really good dealership. The dealer principals, and they've sold the Cummins dealer now, but very first-class people. good customer service skills on the Cummins side because they've been in the territory a very, very long time, very well respected. So my role was more of implementing the Kamatsu side within the Cummins network that they had.

Well, the first thing I was really surprised at is their structure. They had their branch manager. They were all... service people or the branch managers, which was interesting now that I think about it. But their responsibility included parts, service and sales. And they're required to have a monthly meeting between parts, service and sales on client issues that's going on. How are we doing as a store overall? So I really, whereas from the from the the Caterpillar side where I came from. parts as parts and labor as labor and sales as sales, and they didn't get in the room together very often. So it was very refreshing to see the effort being made to pull parts of the dealership together to work through customer issues and common goals in moving forward. So I was very, very impressed with their approach on combining the efforts and communicating it back out to the teams.

Well, I think it's a good idea. I think our challenge is the transitioning from what we have today to the electric side. In my opinion, the dealers are really way behind on getting that transition done. It's going to happen fast. It's happening fast. And I think there's a fear on the technician side of working on the electric product. It shouldn't be, but we've got to do a better job. And power system side probably, no doubt, way farther ahead on most dealers if you can work on the CAD side or common side. We have the knowledge and expertise on how to work around electrified stuff. Well, let's take and transfer that knowledge to the machinery technicians. But it's coming. It's here. I think we just need to learn how to use it. I do think it's going to change the model of the dealerships. Yeah, I agree. Count the number of engine rebuilds you're going to have. I mean, that's some of the auto dealers are facing that now.

And well, in the recent union agreements with Ford and the other OEMs there, how do we handle? people. We don't need as many people assembling engines now or transmissions or whatever it is. So it's really going to change the structure of the leadership network overall. And I think the sooner we get on that and understand it and apply the principles of change to that, the better off we'll be.

Yeah. Yeah, it's hard to become a dealer anymore. I mean, acquiring a dealership is almost next to impossible as a private owner. Large corporations can, but financially, it's very, very tough to start a dealership. Yeah.

Well, I think it's a real disadvantage to the dealer because they lose the data. That third-party access, unless the owner of the equipment allows you to have access to that, they won't have the information on schedule PM services, operating hours, locations. I mean, it's really a disadvantage. So it's just so important to those dealers that whoever they're working with is their own internal team. or who the vendor is, they've got to understand the importance of the telematics part of that and the role it plays. And then make sure the customer feels comfortable that it's not to be used against them. It's a sharing of information to be used properly. But yeah, that can, to me, be a very big shortcoming for a dealership is not having access to that information.

it is. And a lot of cases, like on the Kamasu side, you can use a... You can use the CAT product on there on some items. You can't get into everything. But yeah, no, that's a big deal. The other thing is we're seeing a lot of the newer technology now that are having to upgrade. And it is massive. I mean, when you get your, whatever your platform is using, whether it be a Komatsu or the CAT unit, and you've got to go in and replace that unit because it is now obsolete. And you get a couple thousand units out there and at this date, it becomes dark. You can no longer read the data. You know, you start thinking, well, whose expense is that? Is that the OEMs? Is it the clients? Is it the dealership? That's a huge expense on those kind of conversions. And that's not going away. That's going to continue to be a major issue.

Yeah, we are. Yeah.

Yeah, I think so. Very exciting. You know, the artificial intelligence, where it's going, what it can be used for, how to apply it, how it can make our jobs easier, how it can help train employees sooner. So, yeah, I think it's just very exciting. Data analytics, I think we're just slowly beginning to use data analytics within our business operations to help identify potential clients, when machines do for replacement, pulling all this data together. and doing something with it. One of my roles was in, I was assigned to marketing and my goal was to start the data analytics portion of the dealership within marketing. So you had a separate marketing. One is to the traditional marketing, the flyers and brochures and events and those kinds of things. And mine was to take all of the data points within the dealership and how to utilize it to better market to our clients and use that internally within the business to make better business decisions.

It will always be a challenge. Be sure and be partners with the sales side, the rental side, because they're part of the team, as well as being partners with the finance side and the internal pieces of that dealership, because it takes everyone hitting on all cylinders in order to be effective in the overall roles. And the client, they may not always be right, but they're always first. Yep.