When customer service manager and former aircraft engine mechanic Coty Stiltner (’20, ADMBA) joined the University of Tennessee, Knoxville’s Haslam College of Business Aerospace & Defense MBA program, he encountered a substantial amount of material to absorb even before the first class. He wondered if he’d made the right decision.
“I’m a pretty confident guy, but this was a little intimidating,” he says. Then he confronted the first major requirement: a proposal for an organizational action project (OAP) that would produce at least $1 million in revenue for his company. It made him question if he was a good fit for the program.
After a conversation with ADMBA Executive Director Ben Skipper, Stiltner thought about the OAP from a new angle. Trying to follow Skipper’s advice to think of one problem over which he could have direct control, the problem and its possible solution, suddenly jumped out at him. “And suddenly I knew exactly what to do,” he says.
Stiltner’s project eventually solved a problem that was bigger than anyone realized – and the results are still accelerating.
A Hidden Sinkhole
Stiltner’s company, a top maintenance, repair and overhaul (MRO) provider in the aerospace industry, lacked standardized pricing for repairs, something considered a nuisance, but not necessarily a problem. Moving into an account leader role, Stiltner found inconsistent pricing made the job difficult, and he suspected it caused significant revenue loss.
For his OAP, Stiltner proposed finding the competitive market price for all repairs done, standardizing all the company’s repair order codes (ROCs) accordingly and increasing the price automatically year over year. It had never been viewed as a valuable project, especially because it was so much data and research with a commensurate personnel cost attached, he says.
However, when Stiltner ran the numbers, the fiscal hole became impossible to ignore: By standardizing pricing, he estimated he could save $315,000 in labor costs, provide a lost revenue recognition of $333,000 and increase revenue-capturing ability by $593,000, for a total of $1.2 million over three years.
“There were times we’d be charging half as much for a repair as we did years earlier, even though our costs went up,” he says. “The inaccuracies over time were adding up.”
An Elegant Solution
Stiltner started by forming an in-house team to gather and process the necessary data. This included a member with tech skills to design a functional database and others who could tackle one group of codes at a time, digging up the company’s historical pricing and researching current market rates. Stiltner built an ROC catalog in Excel using skills he learned in his Haslam Computer Boot Camp class. “It’s shocking the amount of data you can analyze in a short amount of time that otherwise would have taken you months,” he says. “Adding Excel tools to my repertoire is one of the most valuable things I learned in the program.”
Working in batches and sharing discoveries with each other weekly, the team assembled a standardized, automated pricing guide for all 380 ROCs. Every new repair code generated by engineering must be manually priced, but the guide shows the average cost of that repair over time with a single click, allowing a suitable profit margin to be set and improving decision-making. The program updates itself with new codes and current projects each time it’s opened and automatically raises pricing year over year.
As a result, estimating and invoicing have been streamlined substantially, reducing wait time for customers and making their costs more predictable, while at the same time making life much less stressful for purchasers and account representatives.
When COVID-19 caused a sudden downturn in the company’s business in 2020, Stiltner was concerned the financial impact of the project might be diminished, but he got a surprise, instead. He had projected generating $200,000+ of additional revenue in the first year of implementation; but that goal was met in six months because the ROC codes are being used more than he initially estimated.
The catalog now totals 450 codes. The next step is to create a fully functional digital repair catalog with one-click pricing that everybody in the company can use, making the company much nimbler in response to market trends. “We’ve captured so much value from this,” Stiltner says. “I’m very proud of my OAP.”
Scott McNutt, business writer/publicist, firstname.lastname@example.org