Discussion:
Workshop and on site labour rate

Recently I had a discussion with one of my friends, who's active in the trucks service business, concerning the workshop technician and field technician labour rate.
Some say, the field technician labour hour rate should be higher, because this gives the customer the comfort of controlling the repair, TOA (Truck Out of Action) factor is usually lower, the technician must be highly equipped and trained.
Other say, the workshop technician labour rate should be higher, because of the cost of the facility, medias (electricity, water etc).
In my company, we charge an equal rate for the workshop and "on site hour, but recently, one of my friends from south decided to raise the workshop rates, claiming that his calculation shows higher costs of workshop repairs. My analysis shows similar results (the workshop hour is about 5-8% more expensive, mainly because we rent a facility, and the rental rate is pretty high), but it's hard to convince the customer he should pay more for the job which is done in "friendly conditions", under the roof (not always happens on site) in warm room etc.
Additionally, he has to pay for the truck transport, which is usually more expensive than the technician travel cost, the replacement truck etc.
Please share your experience. What are the accepted standards on your markets?
  • Posted 31 May 2013 21:13
  • Modified 31 May 2013 21:14 by poster
  • Discussion started by Karait
  • Poland
I know your deepest secret fear...
J.M.
Showing items 1 - 8 of 8 results.
Doing all repairs on site does offer economic benefits when you consider that if all work is done on site- having a large shop ( and all the related expenses) is not needed.

I have a small shop which is where I do all my subassembly work, but unless the customer requests it, the lift stays at their location.
If a customer requests the lift be moved to the shop- I have access to a larger shop for these purposes. Of course- the related costs of renting the space for the job have to be included in their bill- a fact which keeps moving lifts to the shop to a minimum.

At times such as these, having the economic advantage( ie- less expensive labor rate), comes in handy when companies are checking their options.
  • Posted 4 Dec 2013 02:10
  • Modified 4 Dec 2013 02:12 by poster
  • Reply by bbforks
  • Pennsylvania, United States
bbforks (at) Hotmail (dot) com
Customers love technology- until they have to pay to fix it!
Good point about the transportation time- most all cylinder repairs in the field we do now get removed and come to the shop. That way it can be pressure washed and we have a bead blaster to clean the gland nut grooves. If you had two tilt cylinders to build, along with a steer cylinder, it is sometimes better to make it a shop job since you are looking at at least two travel times to the no site. Customer probably wouldn't pay and more just to have it hauled. HOWEVER, I do have the ones that seem to never want to let their machine leave their yard.
  • Posted 29 Nov 2013 01:04
  • Reply by Forkliftt
  • Louisiana, United States
Steve
steve at forkliftt dot com
We charge the same for in shop or on the road labor hours, and most places I have worked over the years do the same, we base this as much upon what the techs are paid (equally depending on skill sets and experience), as any other factor, and we would not want the road techs to not be as willing to sell shop jobs because they don't bring as much per hour. We do use the shop as where most of our apprentices do their learning with more supervision.
IMHO, the cost for facilities should be shared equally between the road and shop, since a lot of what happens in the facility are support functions for the road service (management, parts, and dispatch, etc..).
as far as; "Doing all repairs on-site offers many economic benefits to both parties" I would say 'false" mainly because of the "ALL" repairs. I don't think there is any repair that -requires- my shop, but I do firmly believe the best use of assets would dictate that some/most longer jobs are best done where the machine can sit out of the way while subsystems are being repaired (I almost never pull an engine out on site, if the transportation of the entire forklift would not take any longer than transporting the engine).
  • Posted 29 Nov 2013 00:29
  • Reply by edward_t
  • South Carolina, United States
"it's not rocket surgery"
"Doing all repairs on-site offers many economic benefits to both parties. "
TRUE! But shop jobs keep you out of the cold and rain!
  • Posted 23 Nov 2013 13:03
  • Reply by Forkliftt
  • Louisiana, United States
Steve
steve at forkliftt dot com
As far as starting the business with a workshop- I didn't. My father's business was on site repairs which I continued after I took over.

I believe the workshop first mindset comes from where the owner first was introduced to the business- usually in a workshop situation. Doing all repairs on-site offers many economic benefits to both parties.

I have added a workshop to the mix because my client base now requires that larger jobs be done off site.
  • Posted 5 Jun 2013 06:03
  • Reply by bbforks
  • Pennsylvania, United States
bbforks (at) Hotmail (dot) com
Customers love technology- until they have to pay to fix it!
Thanks for the input.
As I've stated above, our charges are equal too. But it means -the onsite repairs are more profitable for us. Why then start the whole bussiness with the workshop. It's usually expensive matter.

Concerning the travel time - yes this is an issue ;-), but from the other hand the customer must pay twice for the platform trailer transporting the truck to and fro.
Not mentioning the replacement truck, the customer often requires, because the workshop repairs usually take more time.
  • Posted 5 Jun 2013 00:21
  • Reply by Karait
  • Poland
I also charge the same rate for on site or in-house work. As duo states- the farther away the customer the more of a challenge it becomes because of travel time.

I base my rate on the cost of shop time. On-site work is convenient for the customer- convenience has a cost. If the customer would rather me take the lift to the shop for every repair- no problem- the choice is theirs.
  • Posted 4 Jun 2013 23:48
  • Reply by bbforks
  • Pennsylvania, United States
bbforks (at) Hotmail (dot) com
Customers love technology- until they have to pay to fix it!
We charge the same for both shop and road work. I know some charge more for road work.
The big issue we always face is travel time. It really comes into play for customers that are over an hours drive one way. They usually have a big issue paying a lot of money for someone to "walk through the door". Some people call it a zone charge. Some people charge travel time from the previous job. We charge all customers as if we were driving to and from our shop.
  • Posted 4 Jun 2013 21:48
  • Reply by duodeluxe
  • United States
duodeluxe

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