Euro Gas – Lean for Micro

Euro Gas Ltd is the leading company in the Heating Ventilation & Air Conditioning sector in Ireland. Euro Gas Ltd is committed to offering its customers high performance, energy and cost-saving heating, ventilation and air conditioning products, from boilers and heat pumps to exhaust systems and exchangers. The company supplies the Healthcare, Education, Pharma, Food & Drink Office, Corporate and Government sectors.

With over thirty years of experience serving the building services sector, we are Ireland’s leading HVAC supplier to the commercial sector. We partner with market-leading manufacturers to bring the latest technologies direct to your door.

Our goal is to provide the most energy-efficient, sustainable and economical HVAC solution for every commercial requirement whilst providing comprehensive technical service and after-sales support. We take your business seriously and strive to help clients to progress further.

• To review the sales process and focus on reducing costly errors
• Introduce a Sales SOP and performance metrics linked to Euro Gas strategic goals
• New Whiteboards for Sales (or online Sales Dashboard) to show current metrics and performance against agreed targets
• Target to reduce service calls relating to errors
• Increase value-added business using the time currently spent addressing errors (with no additional resources required)

Euro Gas had to change their business focus from the design and installation of commercial boilers to heat pump systems due to new NZEB regulations in the Construction market, which came into effect this year. Previously accounting for 80% of revenue, boiler sales were straightforward, whereas heat pump sales are technically complex, with projects involving many parts and delivery multi-faceted. The learning curve for the group has been steep. Project management is required to get all stakeholders aligned. While the scale of projects is more significant, the risk is also more considerable, and errors are very costly. Mistakes occur with parts lists, missed orders, late deliveries, additional freight and storage costs, delayed installations, overruns and so on. This “Cost of Poor Quality” needs to be measured, understood and reduced – both in terms of financial impact and reputational damage.

The company’s systems and processes also needed to evolve from mainly paper based on an outdated computer system. A new ERP system, DORIS, is being developed, with input from across the company, and while a lot of data is now input with easy real-time access, the team need better reporting and insights. Also, greater integration is required for better supply chain management, the collaboration between departments, and analysis of project metrics and financials.

On top of this, Covid-19 impacted the company, closing sites and suspending business activity. This time out was used by Management as an opportunity to work on the company and design new ways of working. While many of the team are back in the office, others are continuing to work remotely.

1. Covid restrictions brought in Remote Working and the use of Zoom to communicate and collaborate.
2. Weekly meetings now established on Mondays for team-wide communications and multi-functional overviews; and Thursday for a specific review of Sales “homework” focusing on tracking activities and outcomes, not just how many jobs opened or actioned.
3. The team worked to document their existing process and brainstormed over several meetings to design a revised Sales SOP and examine how leads assigned and responded to.
4. Work continues on DORIS to improve reporting, ensure the company is Brexit-ready and to add the Service side.
5. All data is now input to DORIS. No new paper Job Files have been opened, and therefore no paper or filing required.
6. A new way to assign leads and projects to Sales team members is based on priority, the client, and project value and the availability and skillset of the Sales team member.
7. A new way to prioritise Job Files based on
   • value,
   • date/age,
   • whether contracts awarded and whether Euro Gas specified.
8. To reduce the number of Job Files and focus on priorities, those not meeting the grade will be archived but will remain accessible should circumstances change.
9. Introduce a New Quick Quote system for enquiries under a specific value. This prevents too many entries in DORIS and long lists of open jobs, which is demotivating.

1. Some €2.5m was added to turnover in the last 2-3 years without adding to staff numbers. Profitability suffered but has been turned around in 2020. Time, money and effort have been saved by remote working, doing more through DORIS and changing workflows, also reducing the cost of sales (travel etc.).
2. Turnover to Sept 2020 was, as per FY19, but the company managed to control costs and improve net margin The growth target for FY21 is 10-12% with an improvement in margin.
3. Heat Pump sales now account for a substantial portion of revenue.
4. The cost of poor quality was estimated at €15k over some seven projects that Siobhan and James reviewed. This will be monitored for ongoing reductions.
5. The new IT system allows access to information by all, faster and in real-time. This has allowed the creation of targeted reporting and data.
6. Target to reduce the number from Job Files from an unmanageable 600+ to approx 240 or so among the 6 Sales team members, based on the new criteria.
7. Improving the sales team focus on prioritised leads should lead to 15-20% more conversions from the sales pipeline.
8. The team plan to tackle After Sales costs next by analysing non-billable hours, commissioning fees, transport costs, the cost of reworks, repeat visits on-site, missed project deliverables and so on.

“We have been in business for a long time and have staff used to working a certain way for some 30 years. Change is difficult, but it was necessary to address the Heat Pump market’s changes required of us. Covid brought that to the fore and accelerated how we implemented the changes. It was critical for us that all staff had their suggestions and ideas listened to build trust. We needed to move from ‘I’ to ‘TEAM’ and all work together for our clients and the company’s long-term sustainability. John and Deirdre gave us the tools and help we needed at just the right time to bring the whole team on this journey.”

Siobhain Garvey