Field Services

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Field services industry often focuses on servicing widespread customers and would go the extra mile to fulfill its revenue target. One factor that may be left out is the profitability aspect. Overstaffing and undercutting prices on services are also common observations in this industry. DPO&Co has a plethora of experience working with clients in the field services industry, ranging from kitchen exhaust cleaners and telecommunication antenna maintenance, to industrial construction services. Understanding the value chain, identifying the profitable services, and improving operations are a few of the key points in DPO&Co's Field Services playbook.

CASE EXAMPLE

4-Week Project: Project for industrial services company to improve gross margin & reduce overhead costs, resulting in potential $36M revenue and $5M EBITDA

• Client, a portfolio company owned by a private credit asset manager with $8bn+ AUM, is an industrial service business with locations across the US
• Client re-engaged DPO&Co right after completing a market strategy project
• After aligning with the strategy presented in phase one, Client required support in tactical market level implementation and assigning who is responsible, accountable, consulted and informed
• DPO&Co was asked to develop a dynamic model to demonstrate the impact of headcount change and pricing strategy to the P&L
• DPO&Co was also tasked to idenfity opportunities to achieve target GM%, SG&A, and corporate overhead

• Analyze completed jobs data to get actual GM%

1. Identifid underperforming jobs
2. Created CPQ tool to reprice underperforming jobs
3. Forecast P&L data to see the impact of culling jobs or increasing price

• Built a simulation model to see the impact of: 

1. Adding headcount
2. Closing Brick and mortar
3. Reducing corporate overhead
4. Increasing sales

• Developed a distance calculator to reallocate jobs to the closest service center and reduce travel time
• Identified opportunities to reduce corporate overhead and developed implementation plans

• Rebuilt the P&L for each market by enacting changes in resource levels, adjusting price of low margin jobs, and reducing overhead
• Recommended culling jobs and adding employees, which would drive $36M revenue and $5M EBITDA
• Suggested price adjustments using activity-based costing to drive $1.6M GM improvement
• Identified 3k+ jobs that need to be served from a closer site, which could save $100k+
• Recommended 8 corporate overhead initiatives that would drive $390K by year end
• In addition to project scope, we identified several other opportunities:

1. Client to pursue a structured approach to attract part-time fire fighters given reliability, professionalism, etc.
2. Client to leverage IT tools to effectively track KPIs in real time, improve employee engagement, and gamify performance
3. Client to pursue strategic sourcing, which could deliver a $270K EBITDA impact