In my last column, I urged tire dealers to teach their technicians the fundamentals of shop productivity and efficiency.
Doing so can motivate techs to work smarter instead of just working harder. Everyone makes more money and with a nice bonus-reduced stress.
Later, I realized that it would be helpful to put productivity and efficiency into perspective by explaining what affects them. Putting these concepts into perspective will make them much more useful and meaningful to all service personnel.
As I explained last time, I learned these concepts from guys who ran extremely successful service shops, practicing exactly what they presently preach. Later in life, realizing they needed a new challenge, these fellows began teaching business management practices to and consulting with other service shop owners and tire dealers.
These savvy shop owners-turned-teachers typically agree on several critical points. In my last column, I said that productivity is labor hours sold vs. available labor hours. So if your service department is open 50 hours per week and you actually bill out 50 hours labor per tech per week, you're 100-percent productive. These sources tell me it's common to measure 50- to 55-percent productivity when they are consulting with a service shop or tire dealer.
For now, achieving 100-percent productivity may seem a long way off for your service department. Maybe you'll never reach that magic 100-percent mark. But imagine how much your service department's bottom line would improve if you bumped productivity from the common 50 to 55 percent up to, say, 75 to 80 percent.
Anyway, the first point the sources agree on is that productivity directly reflects how well management runs the service department. In fact, some consultants call productivity the boss's batting average. It shows how effectively the boss schedules all repair work and how successfully he or she moves the jobs into and out of each bay. One consultant said some bosses have increased productivity 10 percent just by scheduling the work smarter.
Imagine the improvement you can make in your business simply by holding your suppliers more accountable for slow delivery and delivering the wrong parts. Take a notepad and track the number of minutes per week poor parts service is costing your dealership. The tally, converted into hours, will probably scare you.
Study workflow and your techs' movements throughout the service department. Do you have commonly used shop gear located where most techs can reach it easily most of the time? Are you consistently scheduling the appropriate work into the appropriate bay? For example, the jobs that don't require a lift should be assigned to lift-less bays. (Sounds simple until you actually watch how some bosses assign work.)
Overall, sources said, the most common causes of poor productivity are waiting for parts, getting the wrong parts for the job, waiting for customers' repair authorizations, dealing with a lousy shop layout and coping with careless job scheduling.
In my last column, I defined efficiency as labor time billed versus the time actually spent fixing the vehicle. If the tech spends an hour repairing the vehicle and you actually bill out an hour's labor for the task, the tech was 100-percent efficient on that job.
The second major point on which my sources agree is that the most common causes of poor efficiency are inadequate or outdated shop equipment, insufficient training, inadequately motivated workers, inefficient shop layout and worker laziness.
One great reason for techs to take a personal interest in measuring and monitoring efficiency is that it's the best yardstick they can use to convince the boss that they need new equipment, more equipment and more training.
New equipment and additional training should make a marked, measurable increase in overall shop efficiency.
Another way to improve shop efficiency that should be near and dear to techs is an intelligent and manageable incentive plan.
For example, the higher the efficiency numbers you produce, the higher the labor rate at which you're paid.
Hopefully, these short descriptions of productivity and efficiency will whet you and your techs' appetite for more knowledge and more earnings. Think about it.