Overcome Labor Shortages and Supply Chain Delays with ERP + FSM
In coming years, the field service industry is projected to grow significantly, innovate in exciting ways, and become more relevant than ever. Before any of that can happen, the industry is faced with overcoming two major challenges that defy simple solutions.
The first is labor shortage. Field service, like most other industries, has seen a wave of resignations and retirements since the start of the COVID-19 pandemic. And as many providers have discovered, replacing departing workers is an uphill battle. Either they cannot find enough applicants, or the people who are applying do not have the necessary technical skills and in-the-field experience.
Adding to the pressure to find talent is the fact that the pandemic has increased demand for many kinds of field service, especially those kinds focused on the home. Appliance repair, for example, has seen a tremendous surge in demand as people use (and break) their appliances more often. However, when there are not enough qualified workers to meet this new demand, the opportunity is lost.
Though the pandemic has significantly exacerbated labor shortages, this trend existed before the pandemic started. Baby Boomer retirements have been thinning the ranks of field service for years and stoking fears about an impending “Silver Tsunami” where the most skilled and experienced technicians leave en masse. That cliff might arrive even sooner than expected given that 28 million Baby Boomers retired in 2020 alone, up 3 million over the year before.
All signs suggest an impending labor crisis in field service. By 2028, estimates indicate there will be a deficit of 3 million workers across the skilled trades, including 409,000 HVAC technicians, 648,000 electricians, and 919,000 plumbers.
As one study put it succinctly “One of the biggest questions field service leaders now face is how they are to drive the same levels of growth from a shrinking pool of workers.” Doing more with less has never been easy – but the issue is even bigger than hitting growth targets. If the talent shortage gets as bad as projected, providers will struggle to maintain current levels of productivity and meet existing service obligations. In other words, without more workers (or some other solution) providers will not just struggle to grow, they will struggle to survive.
We address the field service technician shortage further in our blog post, Overcoming the Field Service Technician Shortage: How to Attract and Retain Top Talent. In our case study on Southeast Banking Systems, the customer also acknowledges the role NextService field management software plays in keeping their technicians happy.
“NextService is making our technician’s lives better. It also makes SBS look a lot more professional to our customers because we aren’t hauling around laptops and apologizing for the deficiencies of our old software.” Nick Ellington, Director of Finance, Southeast Banking Systems.
Supply Chain Delays
Few if any forms of field service do not rely upon parts, materials, and/or equipment to get the job done. Before the pandemic, getting those supplies – on time, in the correct amounts, at a fair price – required careful management but was not difficult otherwise. Now, for complicated reasons ranging from demand spikes, mandatory shutdowns, and widespread uncertainty, global supply chains have been sent into turmoil since the pandemic started.
Field service providers who used to have guaranteed access to the goods they needed are now facing long, sometimes indeterminate delays combined with huge price hikes for those goods. In the worst instances, critical supplies are not available at all and will not be in the foreseeable future. When providing field service depends on having certain parts, supply chain issues make it harder to complete even routine jobs. And when growth is contingent on purchasing more equipment or better equipment, a provider may have to change or cancel those expansion plans if the status quo does not return sometime soon.
When will that happen? Some indications suggest that supply chain issues are improving, if moderately; a recent study showed that the six biggest manufacturing industries have experienced moderate to strong growth thus far in 2022. That is certainly good news because it suggests manufacturers are getting the goods they need and, in turn, supplying goods downstream to people like field service providers.
However, manufacturing growth does not necessarily signal the end of the problem. The headline of a recent article proclaimed, “A Normal Supply Chain? It’s ‘unlikely’ in 2022,” suggesting that problems at ports, warehouses, and retail outlets will persist until the end of the year and possibly beyond. Furthermore, supply chain solutions may involve a new set of disruptions considering that 93% of manufacturing executives in one survey report they are implementing or strengthening contingency plans, meaning that supply chains will not “return to normal” so much as evolve into something new. The effect that will have on the supply and cost of parts and equipment remains to be seen. For the time being, though, field service providers will have to wait and wonder when things will get better and what the “new normal” will look like.
Bottom line: supply chains will continue to be an x-factor in service delivery. And when providers cannot confidently and consistently get what they need, it becomes exceedingly difficult to do anything else.
The team at NextService, in partnership with the team at RF-SMART, hosted an in-depth webinar about managing parts effectively from the warehouse into the field. It contains important insights and smart solutions for providers struggling through supply chain issues and making do with whatever they can get. Check out the webinar for a more detailed look at inventory management specifically.
Why FSM Is Not Enough on Its Own
The common refrain in the field service industry is to use technology to fix problems. Specifically, field service management (FSM) software. In an industry that has been slow to embrace technology and, in many places, still relies on paperwork, manual entries, and disconnected tools, putting FSM software in place can improve operations immediately and significantly. That is also the case with talent shortages and supply chain issues – except that FSM software is only part of the solution, and it is not enough by itself.
The right FSM solution can be a powerful addition to any provider, of course, improving upon existing processes while adding meaningful upgrades. In nearly all cases, digitizing, integrating, and (when possible) automating the work of field service management leads to measurably better outcomes in terms of efficiency, productivity, customer engagement, and profitability.
That said, it’s important to understand that FSM software will only address issues related to service delivery: scheduling, technician support, inventory management etc. And while those may be at the core of what the business does, they are not the entirety of what the business cares about or runs on. Consider that most field service providers have FSM software to manage service delivery, but they also have software for business management: accounting, HR, financial planning etc.
Why does that matter? Because for issues as complicated and consequential as those discussed above, FSM can only do so much. It can help companies schedule and utilize technicians better – but it cannot help them track the relationship between labor costs and profitability. It can help them manage their parts inventory better – but it cannot help them adjust purchasing patterns to mitigate rising costs or avoid supply issues. When a provider is making do with less and adapting to new circumstances, the issues apply to both service delivery and business management. Therefore, the solution must address both of those as well.
FSM + ERP: An Equation that Equals Success
Combining field service management with business management is neither a new nor novel concept. Many FSM solutions currently on the market accommodate this in two ways.
The first is by building business management features into the FSM itself. Intuitive as this may seem, the business management features are often disappointing and incomplete; they can handle some responsibilities, but they cannot handle everything or do anything perfectly. They are not the all-in-one solutions they claim to be but an overstuffed yet under-powered toolkit.
The second way developers combine FSM with business management is with APIs. This integrates the tools but being linked together is not the same as working in perfect sync. Keep in mind that APIs can be slow to share data, can require lots of data management on either end and can break down after either piece of software receives an update. Once again, this approach extends the functionality of FSM but falls short of creating a complete solution.
Neither option is ideal – so NextService did something completely different: combine FSM + ERP into one seamless solution for success in field service.
The NextService Difference
Our FSM software runs on-platform with NetSuite, one of the leading enterprise resource planning (ERP) offerings available. That means NextService and NetSuite operate inside the same ecosystem, share the same technical infrastructure, and draw from the same data sources. More than just integrated, they are like two sides of the same coin. And more than just tools for managing technicians and inventory, FSM + ERP helps users overcome labor shortages and supply chain delays.
It does that by giving decision-makers full visibility into how service delivery aligns with business performance. Here are just a few examples:
- See what jobs or clients are most profitable, then prioritize techs going to those locations.
- Learn what parts have the biggest profit margins, then order extras in advance.
- Discover which techs generate the most revenue, then prioritize retaining those people.
- Explore if parts shortages will make certain services impossible to complete, then take those off the menu before incomplete jobs hurt customer satisfaction.
No combination of technologies can suddenly bring a workforce up to full strength or stock the shelves with essential inventory. As these examples (and countless others) illustrate, however, the combination of NextService and NetSuite can help decision makers better understand the effects of labor and parts shortages, then strategically and proactive take steps to minimize the impact on revenue, customer engagement, and the bottom line. It’s not a silver bullet. Rather, it provides a way to weather the storm of the pandemic no matter what resources are (or are not) available.
There is much more to say about how NextService and NetSuite both work better together. Contact us to start the conversation.