The Nuts and Bolts of Setting up a Service Department
/by ARNO HOLSCHUH
Fixing coffee equipment is a joy. But what in context are we fixing it? A tech could be working for themselves, for an independent shop, or as part of a service department. And if you’ve been tasked with founding or leading a service department for a roaster-retailer, this one’s for you. You’ll find that you have an integral role to play supporting the rest of the team, and that can be an amazing step in your career. But it’s a lot less about turning bolts than it is managing an operation.
But wait, I thought this job was about turning bolts?
Yes, I know. Many coffee equipment technicians start down their career path because they enjoy working with their hands. Me too. This stands to reason; the most visible activity technicians engage in is hands-on repair. The satisfaction of physically mending what is broken is enough to put a smile on almost any tech’s mug.
If you want to set up a service department, however, you’ll find that being able to rebuild steam valves blindfolded is no longer the most vital skill in your repertoire. Suddenly you are responsible for procuring the steam valve, for charging a reasonable price for the service, for hiring others and teaching them your skills.
Success in this endeavor requires excellence across a broad range of tasks. Some are clerical, some are intellectual, and some border on personal development. But I would argue that it is this blend of requirements that makes it so much fun.
We’re going to need to get some bolts around here: Inventory Control
The very first step for anyone setting up a new service department will be to get an initial parts inventory. What parts you will need to stock depends on what kind of equipment you will be required to repair. If you are setting up an internal service department, you might well have the advantage of only needing parts for a certain narrow selection of machines. Maybe you work for a multi-unit retail chain, and all the espresso machines are the same model. This will allow you to purchase parts just for that machine.
If your company has a wholesale program which you are asked to support however, you will likely have to deal with the full breadth of machines that have been deployed into the wild. From Astras to Slayers, and every imaginable variation on the old E61 design in between.
In either case, you should get a sense of the census of machines you will have to support.
Once you know what you need to support you need to decide which parts to stock. Most technicians will adopt a strategy of stocking the most frequently required parts while purchasing more exotic bits only when they fail. The most frequently required parts will be wear-and-tear parts consumed during periodic maintenances—portafilter gaskets, dispersion screens, and grinder burrsets at a bare minimum.
Other parts may be frequently required because of the way the machines are being used. If the baristas are using older machines without minding their Ps and Qs, they might foul the steam valves with milk. You could end up replacing or rebuilding those on a weekly basis. Paying attention pays dividends here because you will want to stock as few parts as possible. Why? Because inventory consumes cash. Whether it’s your cash or that of your employer, you want to keep it as cash, available to invest in activities that will make your operation better. Think about it: Is $500 better used to purchase a motor that never gets used and sits on a shelf, or to take a class in welding, soldering, and braising? The skill will make you a more powerful tech; the motor just sits there and stares at you.
This is why companies try and run “lean” on inventory. But do not go too lean, especially if the parts you need are imported and subject to supply chain disturbances. You might be managing your cash well, but you need inventory security. If you have a part in your van, you can finish a job that day.
Over time you will get enough information to predict by when you need to order a part before your current supply runs out. This is called “demand forecasting,” and while a full treatment is outside the scope here, explaining the principles are definitely in-scope. Let’s stick with bolts: If you know how many bolts a machine needs every month, and you know how many machines you need to service, you know how many bolts you need a month. You’ll need to figure out how long it takes a box of bolts to get to you once you’ve ordered it (called “turnaround time”). Now you know how many to order, and when.
You’re still not done with parts. Now you have them, you know how to buy more…but how do you know how many you have? The simplest way is to count them, of course. And “hard counts,” as these exercises are known, do have their place. But they are very laborious once you start stocking a useful number of parts. Most operations will find they stock hundreds of parts. Counting bolts every week gets very old very fast.
Luckily, you need not actually count parts to know how many you have, because our ancestors invented Math. Keep a running record of how many bolts you have. Every time you install one, deduct it from your inventory. Every time you buy a box, add them. In practice, you’ll find many digital tools to support this. But even a free online spreadsheet tool will do the job.
You’ll still want to do an occasional hard count, however. Bolts have a way of walking off the shelf and disappearing. Sometimes people even take bolts without asking permission. And there is no moment so frustrating as going to your parts cabinet for a bolt and finding an empty box.
The one thing we need even more than bolts is money: Financial Responsibility
Setting up a service department is different than founding a service business in that you are likely not directly responsible for providing the funds used. But if you like your employer (and want to be liked by them) you’ll be careful with how you handle money.
Normally, a service department is responsible for multiple financial flows. You have employees, which cost payroll; you also buy parts, which turns cash into inventory. In most cases, members of the service department will perform repairs in return for payment, so you have cash coming in too.
Cash can seem boring, in the sense that it is “just accounting.” But again, this attitude misses the bigger picture. Money is a resource you can use to buy skills, tools, or even just time. No technician, no matter how good they are, has the luxury of operating in a vacuum. We all have to treat our teammates and our shared resources with respect, and that does mean treating cash with respect.
What that means is correctly and accurately tracking all your expenditures and income. Invoice clients promptly and correctly. Do your expenses. Learn how to use your company’s financial control tools, or if none exist, suggest some. Many small businesses use QuickBooks, and taking a few hours to learn how QuickBooks works will yield big benefits for you and your team.
You can look back on these financial records and use them to improve your operation. How many dollars are you spending on parts for every dollar you earned? What are your most profitable services? And once you have a team working with you, it will be interesting to note which team members bring in the most cash, and whose invoices get paid the quickest. Because, yes, you are likely to want to have some teammates.
How many techs does it take to turn a bolt? Building a Team
(Answer: Just one. That person holds the bolt still while the earth revolves around them.)
Most service departments will be a team affair rather than a solo act. Management of your fellow humans is a discipline unto itself, and again, a full treatment is outside the scope of this article. But here are some considerations that are specific to our world:
Don’t judge a book by its cover. I suppose this is universally good advice, but it’s even more important in our world. Do not assume that a tech must have a deep background in mechanics or be “technically inclined.” I personally was unable to fix anything until the fateful day in my 20s when my old Toyota Tercel’s transmission blew up:
I needed that car to get to work.
I did not have money to have it repaired.
I did have money for a repair manual.
Therefore, I became technically inclined over a long weekend.
This transformation is possible for every single person who wants it. That’s a good thing, because skilled techs are a hard breed to find. Good workers are not. What you want to look out for are people who are willing to work and have their head on straight.
Keep training. Your team gets paid with their wages, but they are probably getting a lot more out of work than that. Most techs enjoy the feeling of mastery of a task and take pride in their skills. The more skilled they are, the more useful they are to you. So, you have a shared interest in further developing the skill sets of your staff members. These opportunities for professional development can be just as effective as retention tools than increases in cash compensation.
And of course, you are also a team member, so you too should keep training. Gain financial literacy; learn about digital tools, especially field service management platforms; and above all, study the art of leadership. You, your team, and your employer will all thank you for it.