Do You Really Need A Service Department?

From profitability to a scarcity of great technicians, the obstacles for distributors are numerous.

As we celebrate Service Technicians Month at Welding & Gases Today, we recognize that service departments are an integral part of the distributor-end-user ecosystem, and a critical cog in providing turnkey customer solutions. At companies like Cee Kay Supply (St. Louis, MO), the service department is so important it’s the first stop on a tour of the company, according to Director of Operations Stephen Gianino.

But it’s also important to recognize that there are many distributors that serve customers quite successfully without an in-house service department. So just how valuable are service technicians to a distributor’s business? Does a distributor even need a service department?

As with any business unit, profitability can be a major hurdle in developing a successful service department. Cee Kay’s Gianino wrote about this challenge in “Making Your Service Department Profitable” in the current issue of Welding & Gases Today. “For a long time in our industry, it was thought that the service department was ‘special.’ It was a necessary part of the distributorship, and if it made money, great; if not, oh well.”

With changing expectations, many distributors now expect their service departments to be profitable, but the challenges of staying in the black have not gone away. If a service department is not profitable, a distributor must measure the value-add that a service department brings. Bottom line, if the numbers don’t add up to profitability, it may not make sense for that distributor to have a service department at all.

One of the keys to a successful service department is having capable service technicians—but good technicians are hard to find, as Candice Swiger, human resources manager at WESCO Gas & Welding Supply (Prichard, AL), explains. Swiger told Welding & Gases Today that while she received hundreds of applicants for an electrical technician job opening, only two applied after she specified that candidates must be able to read schematics. “The hardest position to fill is that of a service technician,” she says. “With everything so computer-based, new graduates are learning high-tech skills, but the basics have fallen by the wayside.”

While training is a necessary part of building a successful service department, it also requires an investment of time and money. The more training an employee requires, the greater the expense of having a service department.

In spite of the hurdles, many distributors express the importance of servicing what they sell.

Where do you stand on the need for a service department? Please take a moment to respond to this brief survey:

Gases and Welding Distributors Association