The business environment of the past two years has challenged the creativity and resourcefulness of just about everyone in the foodservice industry. Kirby Mallon, owner and president of Elmer Schultz and president of the Commercial Food Equipment Service Association, talks about how service agents have adapted by leveraging technology, working together and more.
Q: What are the challenges facing service agencies in 2022?
A: Back-ordered parts and supply chain issues are a big problem. A customer calls us, we go out and troubleshoot an oven. We say it needs a new thermostat, but that thermostat is not available from the manufacturer. Lead times could be six weeks, eight weeks. We go back to the customer and say we can’t fix your oven for six or eight weeks. The customer says they will buy a new one only to find the same problem. There’s a limited amount of new equipment available.
Q: What are service agents doing to help solve this issue?
A: Being resilient CFESA members, we worked with a partner of ours, Parts Town, and came up with the idea of sharing our inventory. CFESA members now upload their entire inventory to a central database that’s pushed out to all CFESA members. The idea is that if I need a thermostat and the factory doesn’t have it, the chances are one of my fellow CFESA members will have it. We are literally sharing inventory to help each other out to get our customers up and running.
We’re doing this to help our fellow CFESA members. That’s what CFESA has always been about, helping each other, educating each other. The idea is to get all of our customers up and running. I think that’s a great example of the camaraderie among CFESA members and how we are willing to help each other in times of need.
Q: How are customers reacting to problems caused by shortages of parts and equipment?
A: The customers are more realistic now. In the beginning they would say six or eight weeks for a repair is not acceptable, but they can’t get certain other products to run their restaurants. Now they understand it’s not just a problem in our industry, it is a problem throughout the entire supply chain for everything. They understand it can take six weeks to get a part. As long as you communicate with the customer, they seem to understand.
Q: Are supply chain problems impacting your own operations, beyond parts for equipment repairs?
A: Right now, one issue is trucks. You literally cannot buy a van right now. Normally we would place an order through a fleet program, but they are not building vans right now for fleets. They are taking all those computer chips that would go into our vans and using them for pickups and stuff like that. Dealers are obligated to get onesies or twosies of vans, so you have to be at the right place at the right time to get a van at this point.
It’s just like kitchen equipment. You have to properly maintain your vehicles and hope that you can get another 50,000 or 100,000 miles out of a truck.
Q: Early in the pandemic, companies talked about how they’d emerge stronger and better. What have you done to make that a reality for Elmer Schultz?
A: We took that philosophy that we are going to take the downtime we had during COVID and reanalyze all of our processes. We looked at all our inventory levels and did maintenance on the trucks that needed it.
We also invested in our technicians. CFESA is a fantastic organization as it relates to training in particular. We took the time during COVID to certify many of our technicians. The majority of our technicians are now CFESA Master Certified.
We wanted to be in the best possible position coming out of COVID to be ready to handle our customers. That’s exactly what we did.
Q: The interactions between service agencies and operators changed a lot during the pandemic. Do you think these changes are permanent?
A: I’m not sure if these changes will stay permanent. Being in this industry for 32 years, I’ve seen plenty of changes. The phones don’t ring as much as they used to. That’s not indicative of us being less busy. It’s just the way the customers are now interacting with our service departments and our parts departments. Believe it or not, we get a lot of service calls through our website. The younger generation would prefer to go to my website, enter information and hit send. We have more email communication than we’ve ever had before with dealers, manufacturers and reps.
Q: Labor was a challenge before the pandemic, and it has only gotten more challenging. What has Elmer Schultz done about labor issues?
A: We have always said that technicians do not grow on trees. We decided we had to pay more to keep our employees. Even as revenue was down, we made sure we took care of our employees. We were giving out raises during COVID to make sure we can keep our good people. In the end, it is the people who run the company. Without knowledgeable professional employees, no company can be successful.
Q: You’ve led CFESA through most of the pandemic. How did that impact your time as president?
A: Being the pandemic president, you get what is thrown at you. As president of CFESA at that point in time, I was able to communicate with all the other CFESA members and have a network of people we could talk to. We could make sure there was not some CFESA member that was stuck out on an island and felt like they didn’t have anyone to talk to. There were plenty of times when we would have calls among different groups of CFESA members just to say “Hey, how are you doing, what are you doing? Are you laying off or furloughing?” People were scared. As a president with 32 years of service industry experience, I’ve been through multiple loss-of-revenue situations. I think it was just good for CFESA members to be able to talk to each other, listen to each other and know that the world was not coming to an end.
Q: Service agencies have shifted from calling scheduled service preventative maintenance to calling it planned maintenance. Why change the wording? Have operators adopted the new language?
A: I don’t know why it was ever called preventative maintenance. It implies you’re going to prevent the equipment from failing. That’s not what we are doing. What we are doing is planning to maintain your equipment. We’re cleaning coils on ice machines, lubricating valves on the hot side, but we’re not telling customers that the equipment isn’t going to break for the next year. I think the shift in terminology has helped manage the expectations of the customer.
Q: In what ways is technology playing an increased role in your business?
A: Here at Elmer Schultz, we are heavy on technology. All of our technicians have smart phones and tablets. They use that technology to identify parts and look up schematics. We are able to push information to them. They don’t have to spend a lot of time calling manufacturers since we can get that information to them in real time.
We also have GPS systems and dashcams. We’ve only had the dashcams six months and already have had two situations where we were able to prove that a fender bender was not our fault. All that data is pushed up to the cloud and is there for 90 days. That system has already paid for itself.
Q: You’re a third-generation owner with 32 years of experience. What’s keeping you engaged and excited about this industry?
A: It’s the people, hands down. I enjoy the relationships I have with the local dealers, reps, consultants and manufacturers. We’re even friendly with all the local service agents. Working together with the heads of the other industry associations for the good of our customers is rewarding. We didn’t have that years ago. We were all in our separate silos. We never really sat down and talked about what keeps me up at night, or why we don’t want to do free startups. There was a lot of miscommunication in the industry. Once we started talking to each other, a lot of those barriers came down, and now we work together much better.
CFESA members in particular are a unique group of people. Typically we only see each other twice a year, but I consider them some of my best friends. I could pick up the phone and call any of them at any time and ask them a question, whether it is about hardware, software, trucks, inventory or insurance. I can bounce questions off my fellow CFESA members and vice versa.
Kirby Mallon, Owner and President, Elmer Schultz, President, Commercial Food Equipment Service Association