CUTTING COSTS – BUILDING A TEAM!
As a business owner over the last few years, one of the things that I’ve learned is of utmost importance for a healthy business is having an understanding of your costs. Knowing the costs associated with producing your product/service and then working to manage those costs can mean the difference between success and failure.
As a DOM, you are likely responsible for the margins between what you are charging for a job and what your costs are to do that job. Profit margins can vary due to numerous influences. Your business can suffer from the volatility of errors, rework or unhappy customers. One mistake can cost thousands, and even tens of thousands of dollars to correct. One unhappy customer can mean that bad things are said about your company, which may result in loss of jobs from other potential clients.
How can you work to control those costs while you build an efficient, loyal team?
Many managers are too swamped to think ahead. They come to work and have all they can do to catch up with the problems of day-to-day business. They end up putting out fires and never seem to get out ahead of their work. What they need to realize is that this will never change unless they consciously start a process of turning it around.
Based upon what I’ve seen in the hundreds of facilities that I’ve visited, and on many DOMs with whom I’ve spoken over the years, there are two simple steps that I’d like to propose to help you get you started in the direction of a profitable (or more-profitable) business.
1. Incentivize
Your mechanics might be paid well — but regardless of how much work they do, or if the job is or isn’t on time, they still get paid the same thing. What if they had some skin in the game? I’m not suggesting changing their salary in any way — after all, mechanics should receive consistent pay and feel secure about their job. How about some kind of bonus incentive that each of your mechanics receives for doing a job on time and without errors? Whether it’s a $50 bill or a $500 check, they will hold each other accountable if they know that there is something special waiting for them at the end of each job. There is no better way to say “you are part of our team” than to reward your team members with a tangible pay check.
I recently talked to a maintenance VP who told me that the company had to refund more than $50,000 to a customer for a job coming in more than two weeks late! What if the mechanics at this facility were incentivized to get this job in on time and had succeeded? If they had 10 mechanics working on the job and they had come in on time and been rewarded $500 each, that maintenance facility would be $45,000 ahead today!
2. Train
When I sold aircraft maintenance training, it always amazed me how many maintenance facilities found training “too expensive” or never made time to send mechanics to training. Whether you do in-house training or send your mechanics to school, training can save you HUGE dollars.
It has happened more than once — a technician replaces a component that appears to have failed with a new item, and ends up damaging that new item due to a short in the aircraft electrical system. Shotgun electronics/electrical troubleshooting can be costly. In the case of today’s sensitive avionics and electronic components, it’s not difficult to damage a unit in excess of $100,000 if you’re not properly trained to troubleshoot electronics. Compared to the losses you can expect from mechanics that aren’t properly trained, training is cheap insurance.
As a manager of a maintenance facility, or any business for that matter, it takes more than “winging it” to be profitable. Sure, you might get lucky and have little rework and few errors — but even if you are doing OK, you never will realize your full potential as a manager and as a business if you don’t put steps in place for improvement.
Greg Napert, Proud to be an A&P