The Lube-Tech Round Table is an exclusive feature of the Viscosity Index. Its intent is to cover a wide variety of topics highlighting the ways Lube-Tech helps its customers overcome challenges and solve products they face in their day-to-day operations.
In this installment, Lube-Tech’s Allan Kitten and Mike Jordan discuss the advantages of product consolidation.
The Round Table moderator is J.T. Bernier, Digital Marketing Manager at Lube-Tech & Partners.
J.T. Bernier: Having a big catalog of products is a good thing because it offers customers a wide variety of choices, but for a lot of businesses’, product consolidation is a key ‘efficiency” driver to keeping costs and inventory under control. I’m interested in hearing a thing or two about how you guys have helped some of our customers achieve these efficiencies.
Mike Jordan: Absolutely. There are so many things that come with maintaining an inventory, not the least of which is having to keep track of it, and that typically means paying someone to do that.
Allan Kitten: A lot of it comes down to time. Technicians are able to get more work done when they don’t have to manage inventory or juggle multiple products.
J.T Bernier: It sounds like you guys have a lot of experience with this, can you give me an example?
Allan Kitten: Sure, the best one I have is a multi-line new car dealer I work with. Multiple lines of cars mean multiple oils, so they were buying jugs and cases as their supply. We went in and did the math, and their technicians were making about 5,900 trips to the parts and oil room each year. At 6-minutes per oil change, we figured that was costing the dealer 590-hours of lost tech time. How many oil changes do you think you can do in 590 hours?
J.T. Bernier: Wow, I would think it’s a lot!
Allan Kitten: That’s right, more than a thousand!
J.T. Bernier: OK they could be more efficient with their tech’s time, so how does product consolidation help them?
Allan Kitten: We wanted to eliminate all their jugs and cases, and that would eliminate the extra trips the techs were having to make. To do that, we set them up with a bulk tank system with dispensers located right in their service bays. We calculate a five-year saving for them of more than a quarter million dollars. Actually that’s conservative, we believe it will be a lot more than that.
J.T. Bernier: Allan, we should have talked to you for the last Round Table installment because it sounds like you had to think a little bit out of the box to help your customer realize this cost savings. That’s a unique approach to product consolidation!
Mike Jordan: I agree with Allan, much of the product consolidation strategy comes down to time savings. Or you could look at it as efficiency. We’re helping them streamline their shop.
J.T. Bernier: It sounds like that’s the mindset you need.
Mike Jordan: Yes, a lot of times, as a fresh set of eyes coming into the shop, we can see those inefficiencies clearly. Once we establish them, we just need to sit down with the customer and help them come up with a solution.
J.T. Bernier: It sounds like you’ve done this a few times.
Mike Jordan: Quite a few. Similar to Allan’s example, I had an industrial customer who was using a lot of different fluids. We showed them how a tank system, E-Tank monitors and a single delivery service, could work for them, then we trialed some fluids to whittle down how many SKUs they would need. We saved them $20,000 just on product, and probably more in man hours since we are now handling all their inventory control.
J.T. Bernier: These are great examples guys, and thanks for your time. This really illustrates how Lube-Tech can help your business and its bottom line through product consolidation. Thank you!