Making money in service department is fundamentally the same everywhere in the world. We buy labour, or technicians time and we hope to sell that same time for a profit. Simple really, yet measuring how good we are at it seems to be more of a challenge.
There are 3 easy areas that we need to focus on, but working on the first one will pay dividends.
Utilisation. This really means are we providing the technicians enough to do!
I recommend that we book in 80% of the time available. Leaving the other 20% for ‘up-sell’ and the unplanned customer visits.
So, if you have 4 technicians working an 8-hour day, there are 32 hours of available time to ‘utilise’.
You should book 80% of this, so 26 hours should be booked in, leaving the remaining 6 hours for additional tasks as noted.
This single measure will be enough to start a new way of thinking for many dealerships. Focussing on the number of hours that can be sold is so much better than simply counting the number the jobs done.
Let me give an example. I recently saw what looked like a very busy workshop that was proud to tell me that they had 50 jobs booked in that day. However, 30 of these were for simple Air Conditioning checks that may take 20 minutes each. This meant that although the workshop appeared busy and there were lots of cars about, the truth is that it was not close to providing the volume of sold hours needed to really succeed. So, not quite the successful day that it might have felt like.
The next two measures are a little further down the road, but worth noting here whilst we are looking at developing new ideas
Productive efficiency measures the ability and speed of the technician’s work. This obviously impact on our ability to sell hours. Most dealerships are used to measuring the speed of work for warranty tasks, yet few have taken the next logical step and started to measure technicians speed of work for all tasks.
Overall Efficiency is the most vital measurement. This looks at the time sold as a percentage of the time available to work. In simple terms, of the time we have available, how much are we selling.
So, the message is a simple one. Stop measuring the number of jobs and start measuring the time you have available and load your workshops with care to sell the most hours possible.
Remember with time, once it’s gone, it’s gone!