A new approach
01 May 2008
Service PLUS goal is to develop a network to provide servicing and maintenance for all types and makes of construction equipment. The company's first depot opened in Houston, Texas, in July 2004 and is now scaling up its operations.
The initial business plan developed by chief executive officer Joe Gullion (ex-CEO of US rental giant NES), son and operations director Joey Gullion and chief financial officer Denise Berger called for the company to be independently owned, operating as a JLG authorised service provider. However, JLG management liked the concept so much that it decided it would prefer to own the operation.
Nevertheless, operations director Joey Gullion told AI: “We operate completely independent of JLG as a wholly owned subsidiary. We believe the best way for us to service our customers is to have neutrality between the customer and the manufacturer.” ServicePLUS initial focus will indeed be on JLG products, but it will work on other manufacturers access equipment, and longer term, plans to move into servicing and maintaining other wheeled construction equipment that complement its customer's aerial fleets. It will then be able to provide a total solution-at that point rental companies would be able to minimise their maintenance, service and repair activities.
ServicePLUS will offer a wide range of services, from preventative and scheduled maintenance through to heavy maintenance, repair, overhaul and refurbishment of both machines and parts. As a result, a machine's useful life could be extended from 5-7 years to beyond 10, and its residual value maintained. However, regular scheduled maintenance as part of a complete package will only be offered for JLG machines.
Other depots will be established to form a network across the USA. The current plan is to establish a presence in five US cities in the next two years-the Houston headquarters, Orlando, Atlanta, Chicago and on the west coast in either Phoenix or Los Angeles. The senior management team will move to and set up each new depot in sequence, recruiting replacement staff as they go. The Houston model will be used as the blueprint to ensure continuity company-wide. “We think that we will possibly have up to 100 locations, with perhaps 10 being Houston-sized and the others smaller satellites, depending on demand, We will also have mobile service technicians on the road to carry out repairs and maintenance at customers facilities” says Mr Guillion.
Establishing a presence
The Houston depot features a 30,000 ft2, 32 bay workshop with sufficient crane capacity to lift a 135 ft self propelled boom. Currently, nine mechanics are employed. One or two more will be added per month as demand grows, with the final number expected to reach 30 over time. A 70 ft paint booth will also be installed to allow full refurbishment to be carried out.
The facility boasts a 14000 ft2 parts warehouse, but the intention is not to get into the parts business. “The parts store is primarily intended to support our own operations,” says Mr Gullion.
In August, its first full month, service operations in Houston generated US$20000 of revenue, September saw US$50000 and October US$83000. “We feel that we should be able to generate between US$700000-800000 revenue per month when we reach full capacity, not including revenues from our mobile service operations” says Mr Gullion.
“There is a shortage of quality mechanics and rental companies don't want to repair equipment, they want it out on rent.” He predicts it will take two to four years for rental companies to shed or downsize their own maintenance operations.
Mr Gullion believes that JLG views ServicePLUS as a model for its service operations around the globe but first a full network capable of supporting all JLG's customers in the USA will be developed. When asked whether ServicePLUS would become a global company in the same way as JLG now is, Mr Gullion simply says: “We hope so.”