The end of repair nightmares

This Louisiana distributor discovered that developing a reliable serial number tracking system enabled it to turn its repair business into a major profit center.

by Richard Vurva

What’s the worst sound you can hear on a jobsite? Silence. It means the power tools that should be grinding, cutting or drilling have stopped working. When tools break down, the last thing you want to do is search through your toolbox or pickup truck looking for a receipt to verify when you bought the tool in case it’s still under warranty.

So, tool users often take the tool to an authorized warranty repair center like Tool Town in West Monroe, La. Some honestly can’t recall when they bought the tool. Others claim the tool is still under warranty when they know it’s not.

Recognizing that most customers are better at building things than they are at keeping tabs on paperwork, Tool Town developed a system to track the serial number of every tool it sells and every tool it repairs. Whenever it sells or works on a tool, the company enters the tool’s serial number into its database developed by distribution software provider DDi Systems.

“The next time we enter that serial number into our system, a note pops up telling us this tool has been in here before,” says Rueben Weatherford, Tool Town co-owner with his wife, Kelly.

The service offers benefits for contractors and other power tool users, plus it’s helped this small specialty tool distributor keep a handle on its own costs and warranty tracking.

Why tracking is important
Why would a distributor want to bother tracking serial numbers? The system offers multiple benefits. For example, it eliminates the need for tool operators to keep records of when they purchased a tool or brought it in for service. Such information helps them with warranty claims, but also helps them decide when it’s more cost-effective to replace a tool rather than keep repairing it.

It enables a company to build a repair history for each tool. That way, if a tool breaks down more than once, it’s a clue that the operator may be mishandling or abusing it, or that the tool ought to be replaced. The job might require a different tool. “We can use the report to analyze which vendor’s tools we repair the most, what types of tools, if one customer’s tools tend to have more repairs than others or if one department or individual requires repairs more often than others,” says Kelly.

It prevents dishonest customers from bringing in one tool for repair and claiming it’s another in order to qualify for a warranty claim.

In case a tool is stolen from a jobsite, the serial number provides proof of ownership that may help speed processing by the police and the owner’s insurance company. Plus, although the odds for that happening are slim, if the stolen tool is ever returned to the repair center, Tool Town can notify the original owner of the tool’s whereabouts.

It simplifies Tool Town’s process to submit monthly warranty claims to tool manufacturers. Instead of matching up service orders with old copies of invoices, the system generates an easy-to-read monthly warranty report by vendor and by tool type. “All the information I need is on one sheet of paper. With some vendors, I can copy and paste it and turn in the claim over the Internet,” Rueben says.

The system also helps Tool Town decide which products to carry in inventory. “I want to make sure that the tools we sell aren’t going to break down,” Kelly says. “That’s why before we take on a new tool, our guys take it apart and look at it. If they see little plastic gears or something that looks like it will break easily, we don’t want to sell it. Let the big boxes handle those items.”

As an authorized warranty repair center for most major tool brands, including Black & Decker, DeWalt, Makita, Metabo, Milwaukee Electric, Porter-Cable and Ridgid power tools, nearly half of the company’s sales come from repair business. Even for small distributors like Tool Town, with annual sales of around $1 million, keeping track of repairs and warranty claims can be time- consuming and frustrating.

“A contractor may have 15 14-volt cordless drills that are exactly the same,” says Kelly. “It’s hard for them to remember which drill they brought in for service or repair. Since we’re able to track each tool by serial number, it makes them feel better because they don’t think they’re paying for the same repair over and over.”

Mining the data
Examining repair data helps the company pinpoint potential customer problems and save on wear and tear costs. For example, repair data revealed that one customer that polishes wheels for big rigs kept bringing in grinders for repair. Although the grinders were still covered under warranty, when it expired, the customer would start to rack up sizable cleaning and repair bills, not to mention the cost of downtime and trips back and forth to the repair shop.

Kelly suggested to the customer that many of its problems could be avoided simply by cleaning the grinder after each use.

In a similar situation, another customer that manufactures prison furniture had repeated problems with grinder motors burning out. Rueben recognized the repetitive repair record and asked the company how it used the tool.

He learned that the grinder was being run in such a way that metal chips and dust were being sucked in through the tool’s exhaust. The company is now experimenting with a different grinder that uses a debris guard.

Without the capability to track repair data, the customer would have continued bringing in the grinder for repairs. He’d eventually become frustrated with the tool manufacturer and with Tool Town, and might have taken his business elsewhere.

Over time, the Weatherfords hope to gather enough data to develop an average repair cost for specific tools. Such information could enable Tool Town to offer its own extended warranty package on new or used tools.

“We’ll be able to decide if we can offer customers an extended warranty because we’ll know what it costs to repair certain tools,” says Kelly.

It may take a few years of accumulating repair data before such a service is feasible, but it’s an idea they could only dream of without serial number tracking capability, Rueben adds.

A new service is born
The serial number tracking capability spawned a new service that Tool Town hopes to launch in the near future. For certain customers who buy big-ticket items, such as $2,500 Ridgid threaders, it plans to offer a preventive maintenance package. Every six months, Tool Town would send the customer an e-mail saying it’s time to bring in the threader for cleaning and preventive maintenance.

“We haven’t figured out our exact pricing system yet, but it costs around $100 to clean the tool, compared to about $600 to repair or replace a burned-out motor,” says Rueben. “It’s a service we couldn’t provide without tracking repair data. Serial number tracking is one of our most valuable assets.” 

This article originally appeared in the STAFDA November 2002 issue of Progressive Distributor and Contractor Tools and Supplies. Copyright 2002.

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