Every good owner and manager knows that top performance comes from more than simply achieving goals — it’s about setting the right goals. Otherwise, we sacrifice effectiveness for efficiency.
This is one thing that sets Operations apart from other departments.
For example, the goal of Sales is to sell, regardless of the industry (which is one reason salespeople have such highly transferable skill sets). But in Operations, the goals you set (and which goals should be a top priority) are completely determined by the industry and the specific type of business you’re in.
To achieve top performance in your Operations, let’s look at the top operational priorities for 5 types of AV businesses. Then, we’ll dive into some of the best practices to help you achieve those goals.
Operational Priority: Reduce unit downtime and increase availability
In a rental business, the operational priority is to reduce unit downtime and increase availability. This makes repair and maintenance the top priorities.
If equipment comes back broken, it needs to be repaired as soon as possible. Make sure you have repair technicians ready to take action. The faster equipment is repaired, the better chance you have to generate revenue from them.
It’s also extremely beneficial to keep up preventative maintenance. That helps you lower the chance that your key rental equipment needs repair.
A really effective dry hire rental business keeps a high ratio of repair technicians to preparations technicians. With repair and maintenance technicians available, you reduce downtime and increase availability.
Rental Business with Service
Operational Priority: Master scheduling of delivery
As you rent and deliver equipment, your priority is all about maximizing the utilization of your delivery and set-up resources. You need to schedule deliveries in the most efficient way possible.
If you have one delivery truck leave in the morning, make 12 deliveries, and then come back at 5:00 pm, you are the master of delivery. That’s your goal — make delivery efficiency your priority.
Master the scheduling of delivery and you’ll see an impact in the effectiveness of your business.
Service Business with Rental
Operational Priority: Prepare the order and process changes without sacrificing service
Service business with rental adds complexity to orders. Since you have to set up the equipment, preparation becomes paramount to efficiency. This requires “scrubbing” the order before each job.
When the salesperson and customer agree on the order, they create a list of rental items they need to get the job done. Scrubbing fills in all the items that were overlooked or not listed, but are still needed to get the job done. These are things like cables and accessories — the items that we don’t individually price or explain to clients, but that we need nonetheless.
By preparing the order to this level of detail, making sure you have every item needed before you start a job, you help the technician deliver the service as quickly, easily, and efficiently as possible.
Operational Priority: Document and optimize scrubbing (for 3rd party technicians) with extreme detail
The preparation of production rental requires us to put together a large package for someone else’s technician to install, so documentation is vital.
The preparation time takes longer in production rental because there’s more detail to it.
Also, it uses a lot of floor space. You need space to build a large order, and you’ll likely need it a few days earlier than you would if you were preparing the order for yourself. In the production rental business, you need to be ready to manage space, personnel, and resources as you document and detail the order to the extreme.
Operational Priority: Provide timeline appropriate information for planning and scheduling as well as equipment reservation and prep.
When you are in Event Production, Production Rental is simply a subset of the overall project. Whether it’s your team, a subcontractor, or both, the information you provide allows all other timelines to happen.
You’ll need to provide the same level of documentation and details for your staff as you would for third party technicians in production rental. This includes scrubbing the order for all departments involved: audio, video, lighting, rigging, staging, and electrical.
If you’re thorough in preparation, scrubbing, and documentation, you’ll maximize your turnaround time for equipment and staff.
How to Achieve Your Operational Priority
These operational priorities make your company more efficient, but how do you achieve them? Regardless of your specific business, these best practices prove to make your company more efficient all-around.
1. Access Your Floor Space (and add more!)
Floor space is really important in achieving efficiency. Different types of AV businesses have different space requirements, but I can tell how efficient an AV business is by walking through the warehouse and measuring the ratio of floor space to shelf space.
The bigger and more complex your orders, the more floor space you need. As you move from a basic rental business to production rental to event production, more floor space is necessary to operate efficiently.
Floor space is money. With it, you’ll reduce labor, handling, and error rates by as much as 50%.
2. Improve Warehouse Tidiness
This isn’t about being a neat-freak, but tidy warehouses are more efficient.
They have better utilization, lower inherent costs, and frankly, you can actually find stuff! We’re in the “stuff” business — and it’s highly inefficient when people have to look in three different places before they find what they need.
I once worked with a client to estimate the cost of the amount of time their warehouse team spent looking for things. We estimated that this small company spent $175,000 annually looking for items that should have been findable. Needless to say, it was worth the one-time cost of $40,000 to buy new shelving and change the warehouse layout to be more efficient.
Time is money — and space has a lot to do with using your time well.
3. Optimize Employee Utilization
Any business owner will tell you that full-time employees are expensive. You have to pay them all of the time, so you certainly don’t want to staff for busy season.
Minimize your full-time staff based on your average weeks — not your busy weeks.
When the rush hits, outsource. Bringing in additional staff to supplement the work that needs to be completed is much more affordable than hiring extra full-time staff.
4. Complete Long-Term Projects
Completing long-term projects during slow periods is key to running an efficient organization. The average company I visit has years of incomplete long-term projects because they’re not good at managing people or cash — and they usually don’t predict demand very well.
Work to complete the long-term projects you’ve left unfinished. Incomplete projects will set you back and make it difficult to run your business.
Want to figure out how you’re doing? Ask yourself these questions:
- Does your operation efficiently meet demand?
- Is your operations team busy with productive activities?
- Is your warehouse organized and easy to work in?
- Do your crews know their schedules at least one full week in advance?
See room for improvement in your operational priorities? Set the right goals.
Then, start implementing the strategies needed to achieve them. Having a business that is both effective and efficient is possible.