DEALER PRACTICES

Work In Process Management

Central WIP Room
Work Order Management Sub-process

Central WIP Room

1.0 Introduction & Executive Summary ....... 2
2.0 Dealer Practice Description ................... 2
3.0 Implementation Steps............................ 5
4.0 Benefits / Measures............................... 7
5.0 Resources Required.............................. 7
6.0 Supporting Attachments ........................ 8
7.0 Acknowledgement ................................. 9

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 Work In Process Management
Central WIP Room
Dealer Practices --------------------------------------------------------------------------------------

1.0 Introduction & Executive Summary

Faced with a customer’s complaint of receiving different invoices for the same work at
two branch service departments, the dealer identified the need to develop and
implement standard work order management processes focused on sustaining service
efficiency performance targets across all branch service departments and cost centers.

In less than two years after implementing centralized Work in Process management
(WIP Room) processes, Customer Satisfaction ratings have improved and the dealer
remains focused on a metric driven continuous improvement service culture. They
improved their Last Labor to Close (LLTC) metric from 22 days to < 7 days and
consistently sustain this target across all branches.

Key process improvement elements include the following:

• Centralized support for WIP management, Warranty processing, Standard Job

development, and Customer Value Survey follow-up. Implemented team
approach to problem resolution and knowledge transfer; preventing errors from
reaching the customer.
• Assigned WIP Manager to document and implement standard work order
management processes. Train new employees using standard process
documentation.
• Strategic use of service management reporting software (Blake MacArthur
Technology Services - BMTS) to identify and manage tactical branch process
improvements using key operational metric reporting. Supported by active
executive support to sustain service culture improvement efforts.
• Provide root cause analysis and process improvement recommendations for
branch performance issues. Explain and communicate financial impact of day-
to-day WIP management practices.
• Regularly request, implement, and communicate process improvement ideas
across branches.

2.0 Dealer Practice Description

View the WIP Room Process Map
The dealer’s service efficiency improvement initiative began in 2008 when they
established a Service Operations Manager / WIP Room Manager to identify and
implement standard work order management processes. They implemented BMTS
Service Management reporting software to provide the operational metrics needed to
direct their improvement efforts. The key process elements of this initiative are
sustained through the interaction of the following roles:

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 Work In Process Management
Central WIP Room
Dealer Practices --------------------------------------------------------------------------------------
Note: for a complete list of job roles and responsibilities refer to the Resource section.

Branch Service Manager / Service Coordinator

Branch Service Managers / Service Coordinators manage service ticket requests (from
the BMTS system), service work order performance, and customer communication.
Submitting a service ticket initiates a computer generated request to the WIP Room to
open a work order. Service coordinators are notified via email when the work order is
open. A technician marks the last labor complete (BMTS) triggering the Branch
Manager to review segments, segment notes accuracy and submit a request to the WIP
room to close the work order by marking work order ready to close (R2C).

Work order process and performance issue questions are submitted to the WIP room for
root cause analysis. Branch Managers are accountable for branch service operations
metrics and customer issue resolution. Key Operational Metrics Dashboard

Central WIP Room

The goal of the WIP Room is to provide strategic information and direction to improve
dealership service efficiency. WIP Coordinators focus on providing consistent customer
support and customer service documentation across all branches and are available to
support branch coordinator absence leaves. A team approach ensures knowledgeable
resources are close by for issue resolution consultation and process cross training
(including a standard job coordinator, warranty analysis, and technical information).

Daily Process flow:

• WIP Coordinators (3) receive system generated alert from the Branch Manager
(phone tone on computer) to open work order.
o Goal: Open work order within 4 minutes for assigned stores. Target 30
work orders daily per coordinator.
• Complete Work Order Open Process checklist to review & validate:
o Customer information, multiple open tickets and consolidate for customer
convenience
o Customer notes, PM due, open Service Letters
o Credit check
o Confirm standard job / segment usage
o Open work order and email WO #, Model, Serial # (in title) to branch
• Branch Service Manager / Coordinator accountable from open to ready to close
and for customer communication. After the technician marks labor complete, the
local coordinator reviews segments and segment notes accuracy. Requests work
order close and / or proforma invoice via system generated close request.
• WIP Coordinators close different stores than opened to cross check accuracy.

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 Work In Process Management
Central WIP Room
Dealer Practices --------------------------------------------------------------------------------------
• Complete Work Order Close checklist: Work Order Close Checklist
o Validate charge codes, tax codes, check for missing Purchase Order
numbers, over-time authorization, and required customer documentation
attachments. (BMTS enables technicians to attach electronic customer
documents like CTS reports, Customer Damage reports, Good Will forms,
etc.)
o Review core returns
o Validate warranty entry codes in the Cat system (BMTS launches Cat
systems).
o Review segment parts usage, validate SIMS codes (in SIS), and check
for missing segment notes.
o Transfer service history notes to customer notes field and update notes
from customer perspective.
• Identify close issues. Facilitate timely resolution of items preventing work order
close including credit issue resolution, and update web notes to ensure
customers receive timely notice of status changes.
• Provide process instructions and process training support when requested by
branches
• Goal: Respond to close requests within 2 hours and close all work orders by end
of day (unless complex error resolution requiring customer follow-up next day).

Generate weekly service operations exception / root cause reporting for branch
coordinators and managers:
• Examples: Employee utilization, tool balance remaining, rental agreements > 30
days (indicating PM needed), last labor recorded > 30 days, 10 days no labor,
WIP trend dollars, policy report (down status machine still in shop, ready to rent
delays), and work orders > 30 days with warranty (to ensure won’t miss 60 day
reporting deadline).

WIP Room Manager / Service Operations Manager

Role established to develop and communicate standard service processes and to

implement the WIP Room which provides the strategic focus to enable branch level
tactical improvements. Use of the BMTS service management reporting software
enables more responsive, relevant reporting for branch / cost center root cause analysis
on a weekly basis.

The WIP Manager reports to the Product Support Operations Manager. Together they
focus on sustaining metric driven service culture change improvements and building
enterprise service process capability. Their ultimate goal is to provide a good Cat Dealer
service experience for their customers.

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THE INFORMATION HEREIN IS THE PROPERTY OF CATERPILLAR, INC. AND/OR ITS SUBSIDIARIES. WITHOUT
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 Work In Process Management
Central WIP Room
Dealer Practices --------------------------------------------------------------------------------------
Role responsibilities:
• Manage WIP room employees.
• Develop, maintain, and communicate dealership work order standard work.
• Develop and distribute Monthly Service Operations Metrics Dashboard for
Product Support General Manager. (Distributed to Branch Service Managers /
Service Coordinators during monthly operations review meetings.) Refer to
Appendix for Metrics Dashboard Report.
o Conducts performance issue root cause analysis and improvement
alternatives research for the Branch Service Managers. (Example:
identifying the sources of good will and policy work.)
• Distributes branch coordinator customer satisfaction surveys to solicit process
improvement feedback.
• Identifies and implements continuous process improvement opportunities.
o Example: Noticed several inventory models had different decals and were
positioned incorrectly. Established decal photo library of correct decals
and correct position. Photos are attached to Pre-Delivery and Make
Ready prototypes. Have eliminated incorrect use and replacement of
decals.
• Train new branch service personnel using standard service process
documentation.
• Provide vacation / absence resource support for branch service coordinators.

3.0 Implementation Steps

Work In Process Room Implementation Process

• Communicated with other dealers who had implemented the Blake MacArthur
Technology Services service management reporting software (used in
conjunction with DBSi 5.0) to identify successful practices.
• Began changes during slow service season.
• WIP Room manager met with main branch internal sales and service
departments to document service management processes and identify
opportunities for improvement.
• Started with internal equipment work orders and processes (for New Machine
Prep and Rental units):
o Established prototypes for New Machines and Make Ready
o Established Rental prototype work orders:
Small Rent 1 (≤ 2 days)
Rent 2 (> 2 days)
o Enabled service history to establish and monitor flat rating.
o Developed Customer Equipment Damage recovery standard process with
cross-team input.
o Monitor service department rental service revenue recovery.
o Monitor rental machine throughput. Improved cooperation between rental
and service department via analytical approach, providing standard

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 Work In Process Management
Central WIP Room
Dealer Practices --------------------------------------------------------------------------------------
processes and executive reinforcement of changes. As a result, rental
unit availability has improved due to higher service priority.
• Documented initial baseline processes and established standard process safe-
source. Validated process guidelines with sales and service personnel.
Communicated process changes recommended by employees.
• Initiated WIP Room support process with home branch, validated process and
made corrections before adding another branch.
• Deployed to one branch at a time (9 branches).

Central WIP Room Resource Support

• Refer to resources list for roles & responsibilities.

• Select people with great customer skills and good work ethic.
• Provide metric reporting / data analysis capability support.
• Establish process documentation safe source (share drive and printed book
available at desks of all WIP Coordinators). Implement process update and
change management communication process.

Sustaining Service Cultural Change

• WIP Coordinators limit communication to two emails to resolve an issue and then
call or provide face-to-face follow-up.
• ‘Treat co-workers as if they are our customers’
• Provide onsite resource support when needed by a branch.
• Send annual WIP Room customer (employee) satisfaction survey to solicit
continuous improvement feedback.
• Acknowledge improvements generated by the survey and communicate process
updates.
• Executive support essential to sustain process changes.
o Example: Process compliance monitored monthly. Provide information
regarding financial impact of process errors (administrative cost of
backing out work orders) and discuss alternative ways to resolve branch
issues (face-to-face support). If process compliance problems continue,
management supports restricting software system access to functions.

Future Process Improvements

• WIP Manager conducts random internal audit of work order processes. Conduct
web meeting to review process strengths and needed improvements.
• Facilitate monthly branch meetings to review issues, reinforce processes, and
perform validation checks.
• Sponsor on-going process improvement projects.

Caterpillar Inc. https://dealer.cat.com/Advisor

THE INFORMATION HEREIN IS THE PROPERTY OF CATERPILLAR, INC. AND/OR ITS SUBSIDIARIES. WITHOUT
MAR 12 WRITTEN PERMISSION, ANY COPYING, TRANSMITTAL TO OTHERS, AND ANY USE EXCEPT THAT FOR WHICH IT 6 of 9
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 Work In Process Management
Central WIP Room
Dealer Practices --------------------------------------------------------------------------------------
4.0 Benefits / Measures

• Service Efficiency improvements:

o Improved service throughput and resource utilization enabling capacity
without additional costs.
o Last Day Labor to Close days reduced from 22 to < 7 days.
Next target: 3.5 days
o Improved repair history – standard segments, service code and warranty
review enables standard job development.
o Average number segments increased from 2 to 5 (Standard Job
Utilization improvement)
o Flat rating increase and at target goal (40% work orders now flat rated)
o Last Labor to first claim reduced by 50% from 2007 to 2011.
o Annual standard job / flat-rate review conducted annually using input
provided by key service operational metric report (available from BMTS).
o Warranty processing improvements (Decreased Last Labor to First Claim
from 16 days to 7.67 days).
• Customer Satisfaction Survey improvements:
o Attributed to uniform customer invoicing, improved customer service
repair notes, and flat-rate pricing across dealership branches.
• Branch process compliance metrics:
o WIP Room opens 95% of all work orders
o Reduced back-outs from 3.9% to 2.4% across all branches.
o Reduced parts transfers per work order from 2.4 to 1.6 per work order
(indicating wrong parts placed on a segment).
• Employee culture change results:
o Year one received branch push back for process changes, now service
managers are requesting assistance to avoid errors and delays.
o Increased calls from the branches asking for process direction and
alternative solutions to prevent segment transfers and back-outs.
o Employee turn-over reduction attributed to training and capability building
support

5.0 Resources Required

WIP Room Personnel – Roles & Responsibilities:

• WIP Room Manager / Service Operations Manager to develop and document

standard WIP management processes, manage WIP room personnel, provide
the information, reporting, metrics and direction to improve branch service
efficiency. Accountable for reporting key operational metrics to achieve and
maintain service efficiency goals across all branches. Accountable for identifying
and implementing continuous improvement opportunities.

• WIP Room Coordinators (3 to support 9 branches / 22,000 work orders per year)
– Target open every WO within 4 minutes. Goal per analyst – open & close 30
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THE INFORMATION HEREIN IS THE PROPERTY OF CATERPILLAR, INC. AND/OR ITS SUBSIDIARIES. WITHOUT
MAR 12 WRITTEN PERMISSION, ANY COPYING, TRANSMITTAL TO OTHERS, AND ANY USE EXCEPT THAT FOR WHICH IT 7 of 9
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 Work In Process Management
Central WIP Room
Dealer Practices --------------------------------------------------------------------------------------
work orders per day. WIP Coordinators eliminate variation across the work order
open and close process. Their support enables Branch Service Managers to
spend more time addressing customer / branch personnel issues.

• Standard Job Coordinator – Review segment usage and history to develop and
maintain standard jobs. Provide support for WIP coordinators & branch Service
Coordinators / Managers.

• Warranty Analysts (2) – process Machine, Engine, Allied warranty; support &
resolve warranty questions & issues for WIP coordinators & branch Service
Coordinators / Managers. Provide warranty philosophy and process training for
WIP Coordinators.

• Customer Value Survey Analyst – processes Customer Value Survey and

ensures all customer feedback is addressed. Positive branch feedback is
forwarded and service recovery issues are assigned an owner for resolution.

Standard Work Documentation / Continuos Improvement Process

• WIP Management processes documented –WIP Coordinators have desk copy.

• Maintain current process standard work and forward to branch Service Managers
as needed.
• Monitor process compliance, identify issues and update process documentation.
• Provide new user training using standard work documents.

Software:
• Service Management Reporting software
o Blake MacArthur Technology Services (BMTS) – web enabled service
management reporting software in conjunction with DBS 5.0 AS400
software.
o BMTS Software Point of Contact: Brad Huseby Project Manager Butler
Machinery (701) 298-1726.
o Key Features: WIP Summary report by branch (which was difficult to get
in DBS), KPI date range comparisons, Customer Dashboard with detail
drill down, Work order drill down, one button Cat system launch, Top 100
or 200 Parts, Service Customers report, Labor Reporting by any criteria
(technician, customer, etc.), ability to attach service documents to a work
order

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THE INFORMATION HEREIN IS THE PROPERTY OF CATERPILLAR, INC. AND/OR ITS SUBSIDIARIES. WITHOUT
MAR 12 WRITTEN PERMISSION, ANY COPYING, TRANSMITTAL TO OTHERS, AND ANY USE EXCEPT THAT FOR WHICH IT 8 of 9
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 Work In Process Management
Central WIP Room
Dealer Practices --------------------------------------------------------------------------------------

6.0 Supporting Attachments

• BMTS Operating System Slides
• Work Order Open Checklist
• Work Order Close Checklist
• Key Operational Metrics Dashboard

7.0 Acknowledgements

Caterpillar, Inc. would like to acknowledge the following for their time and willingness to
share this successful practice to benefit global dealer service operations:

Keith Wafer – JA Riggs Product Support Operations Manager

Julie Steed – JA Riggs Service Operations Manager (WIP Room Manager)

Please address follow-up questions to George Blowe, Caterpillar Inc. Service Operations
Consultant. Email: [email protected].

Caterpillar Inc. https://dealer.cat.com/Advisor

THE INFORMATION HEREIN IS THE PROPERTY OF CATERPILLAR, INC. AND/OR ITS SUBSIDIARIES. WITHOUT
MAR 12 WRITTEN PERMISSION, ANY COPYING, TRANSMITTAL TO OTHERS, AND ANY USE EXCEPT THAT FOR WHICH IT 9 of 9
IS INTENDED, IS PROHIBITED.