Since this is a three part article, please watch for the remaining portions over the next two months. As I travel internationally consulting, I continue to come across the same problems time and time again. The biggest problems I see are (in no particular sequence):
- A total lack of or very poor systems in place.
- Poor purchasing.
- No performance pay.
- More employees then the amount of monthly revenue can justify.
- No financial metrics.
You must prepare yourself and your yard for positioning. If you are not ready to position yourself when a windfall or better yet an opportunity presents itself, then your windfall or opportunity will soon be eaten up with the inefficiencies in your yard. All will be lost and you will be back to square one.
Systems – In order for a system to be effective, it must be scaleable. This means the system will work equally well if the monthly sales volume is $25,000 per month, $150,000 per month, or even $350,000 per month. If your systems are not scaleable, then at some point they will breakdown under the volume and stop working. When this occurs, some or all employees must stop performing their primary function, whether it be selling, delivering, dismantling, etc. and go into the special project mode.
In the special project mode, we must design and implement a new system or worse yet, clean up and rearrange the old system. This activity almost always causes a reduced service level, loss of focus and the end result is a loss in business. When you lose business, it is always more difficult to get it back the second time then it was to achieve it in the first place. Nearly every place I visit I find what I call, “The Make System,” of placing vehicles in the yard. Chevrolets are up on the hill, Fords are down in the valley, Chrysler products are over by the creek, and so on. This system does not work and is not scaleable. No matter what size area you designate for a particular make or model, you will invariably obtain more of that make or model then will fit in the area, and too few of another. Next thing you know, all the makes and models are mixed up again.
I believe this system originates from either not having a yard management system already in place or not trusting the information in it. A much better system would be to label each area with a sign. For example: YA for yard area A, YB, YC and so on. Then, make up signs for rows 1, 2, 3 and so on. Place a stock number on each vehicle, then enter the vehicle and its location in the yard management system. Know that this is a scaleable system. No more wasted time, lost sales or vehicle damage from moving vehicles around to get all of a particular make or model in a designated area. You do have a yard management system, don’t you? If you do not, this is the first system you need to install. You will find it gradually more difficult to stay in business during the 21st century without a computerized yard management system.
If you do these things, you will be prepared to position yourself to take advantage of any opportunity or make the most of a windfall if one comes along.
Remember, only you can make BUSINESS GREAT!
Don’t forget to go the website for my new book, www.greenweenies.com, to learn all the backroom business terms. There are 1,200+ terms in over 300 pages, with hilarious illustrations by world famous Gahan Wilson. You can register there for your free weekly “green weenie.” If you want to know what a three fingered booger is, or what’s in a train wreck envelope, it’s the only place to go!
Remember, only you can make BUSINESS GREAT!
Please email if you would like me to send previous articles.
AutoSalvageconsultant.com was formed in 2001 to help recyclers improve their businesses. With over fifty years of experience in three staff members, the group is THE definitive source for recyclers’ management and training needs. The founder, Ron Sturgeon, is past owner of AAA Small Car World. You can review his resume, with skills and experience, at our website. In 2002, his book How to Salvage Millions From Your Small Business was published to help small business owners achieve significant success. It was recently reprinted in the U.S. and published in China, Korea and the Czech Republic. You can learn more about how to help your business at www.autosalvageconsultant.com. You can reach us at 5940 Eden, Haltom City, TX 76117, or by calling or emailing Mike Gibson or Tammy Sturgeon. Mike can be reached at 817-925-0061 or firstname.lastname@example.org, and Tammy can be reached at 817-999-1224 or email@example.com