What’s On Your Truck?
Capacitors, motors, circuit boards, start devices, filters, and humidifier pads…You name it, and you are likely to find it on an HVAC technician’s fully stocked truck.
Shaun Davie, owner, Decatur Heat & Air, Inc., Decatur, TX, estimates that each of his trucks carries $5,000 to $6,000 worth of inventory and tools. “All of our trucks are stocked the same,” he says. “I can send any technician to any call, and they will be able to fix it, whether residential or commercial.”
In the summer, when it’s really busy, technicians refresh their inventory daily, often carrying more than one of many items. For example, Davie indicates his technicians carry multiple capacitors simply because they are among the most commonly replaced parts. “You would be surprised what people can fit on a van as long as it has the proper shelving and they keep it organized.”
The second-generation company started by Davie’s dad in 1980, has 16+ employees. Installations account for about 60 percent of its $2 million annual volume; the remaining 40 percent comes from service.
“I’m surprised when I talk to people how many don’t stock their trucks,” he says. “Quite a few companies go to a job, determine the problem, go get the parts, and come back. It’s so inefficient, especially if the house is out in the country, and the nearest parts are an hour away. By keeping your trucks stocked with parts you can return more calls during the day.”
Control Your Inventory
All of the trucks at DiFilippo’s Service Company in Paoli, PA, are stocked with the same equipment and organized in the same manner. “It’s a requirement,” says Vince DiFilippo, CEO. “If somebody’s truck has to go into the shop, we can jump them into a spare, and it will be laid out exactly the same. The other advantage is when we count inventory, we know where everything is.”
Laura DiFilippo points out that parts are restocked three times a day using a bin system. “Every time the service techs complete a job, they call in to say they’re done and tell us what parts they used. Our general manager then pulls that inventory out of our locked cage and puts it in bins they can easily get to and take out to their trucks. We hope that at least once a day they come in to pick lit up, but it could be more, could be less. However, the inventory is always there for them to restock.”
If a direct factory replacement is not required, the company relies on multiple parts that are interchangeable. “For example, we only carry three capacitors, which cover about 400 different applications,” Vince DiFilippo explains. “We like to use products that are flexible—one motor that can be used in six applications.”
The 100 percent residential company with 11 employees averages about $2.2 million annually. “We’re unique because we do not do oil, commercial, hydraulics, or hot water,” he explains. “We’re gas heat, air conditioning, and heat pumps. Our inventory is limited to that so we don’t have to carry everything.” In addition, technicians travel no more than 23 miles in each direction so they are never that far away from the office.
According to Laura DiFilippo, the company buys 95 percent of its parts from two main distributors and each year reviews inventory lists to determine whether particular parts should be added—or deleted—from trucks.
“Contractors should know what exactly they are using,” she says. “Go to vendors and find the exact parts you are using so you can stock appropriately. You also need to decide how much you want to spend. You can’t spend carte blanche. If you can only afford to spend $3,000 on each truck, you need to decide what that $3,000 will buy. What are the priorities?”
She believes you also need to decide what your in-house stock should look like and how far your service techs might have to drive. “If we were going all the way into Delaware, we might change the way we look at our inventory,” she says. “We might have more relationships with supply houses where they could pop in and get parts we didn’t want to carry or put on the trucks.”
As the company’s president, she places a high priority on inventory controls. “We put an inventory system in place about two years ago because our inventory was out of control. You have to have a system in place that controls what the guys get, how they get it, when they get it, and what they’re taking. Small companies have to have the same controls that large companies have.”
Now all service inventory is kept in a locked cage with access limited to three people. “It is not for theft,” she says. “It is to keep everything in there so nobody can pick and choose what they want. We used to have guys who would come in, they would get inventory and put in on a workbench, and then have lunch. We used to find inventory all over the shop. Now every part they take has to match a job. They can’t just come in and say, ‘Oh, it’s hot. I’m going to take three extras of these.’”
Vince DiFilippo encourages contractors to develop sound relationships with their vendors and then negotiate pricing. “We have an outstanding delivery service from one of our vendors,” he explains. “They’re here every day, which means we don’t have to carry six of an item on a truck or on the shelf. We can reduce that because the vendor offers just-in-time inventory. We don’t have to carry that expense.”
Four Different Levels
Matt Marsiglio, operations manager, Flame Furnace, Warren, MI, handles truck inventory a little differently. Because the company has four ascending levels of technicians, each truck’s inventory depends on the level of the technician driving it.
For example, Level 2 technicians are basic HVAC troubleshooting techs who perform maintenance inspections and troubleshooting of forced air systems. “They carry everything that Level 1 maintenance techs carry, as well as blower motors, condenser fan motors, pumps, trap kits for high-efficiency furnaces, universal pressure switches, ignition control modules, and fan boards.”
The company implemented the technician levels about a decade ago. One advantage of the system, Marsiglio says, is it gives technicians who are hired out of trade schools a very clear career path because they know the requirements for progressing to the next level. He explains that Flame Furnace is 80 percent residential and 20 percent commercial with about 70 percent of its $12 to $13 million in annual revenues coming from installations and 30 percent from service. Employees total 83, with 53 in the field.
“We just replenished our fleet and went to larger trucks for our plumbing department and to smaller trucks for our clean and check department,” Marsiglio explains. “Anybody who is a Level 1 tech has a Nissan minivan because they have a lower inventory. We have come to the conclusion that if we let our guys pick their trucks and inventory each would have a semi. We have standard 2500 series work vans that seem to do very well for all of our service. Our installers have the same vans.”
Purchasing, management, and the technicians decide what goes on the truck. “The higher level of input comes from technicians because they’re the front line,” he says. “We let them have 70 percent of the input on what goes on a truck. We listen to our technicians because they see the issues daily.”
Marsiglio also allows technicians to organize the trucks according to individual preferences. “We’ve tossed around the idea of saying, ‘This is how we want every truck laid out,’ but our only requirement is it has to be neat, obviously to save time and protect parts. Every six months we bring the trucks in and offload seasonal parts. If a part goes on a truck six months unused, it comes off their inventory so we don’t have a bunch of dollars out there year after year.”
He advises contractors to listen to their techs. “That’s where we have learned a lot,” he says. “We used to think we were smarter than the guys in the field, but they do truly know what they want out there. Then hold them accountable. If they say they want something, give it to them, but monitor the movement. If it doesn’t move, take it back.”
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