The first step in planning a rosier new year for your dealership's service department is to identify its neediest areas.
One way to approach this goal is to review technician efficiency numbers and then poll employees as to their perceived needs. This combination of inputs should steer you toward the places or issues in your dealership that deserve the most attention and investment.
I believe the combination of objective data (tech efficiency numbers from the dealership's computer) as well as very subjective input (worker feedback) should tell owners and managers what they need to know. As one colleague summed up the challenge of improving the business: ``A boss doesn't always know what he or she doesn't know about their own service department!''
You may recall that tech efficiency is the relationship between the time it actually takes an employee to repair a vehicle and the amount you actually bill the motorist for that job. For example, a tech spends an hour replacing a water pump and the dealership actually charges one hour for that repair. One hour divided by one hour is one; one times 100 percent is an efficiency of 100 percent.
If you only billed out one-half hour for that same task, the efficiency would be only 50 percent.
Over the years, I've emphasized the importance of measuring and monitoring tech efficiency because it's a vital barometer of a tech's individual performance. Mind you, that performance directly reflects, among other things, the worker's natural or innate skills as well as his experience and training. I have been reporting on the auto repair industry for 30 years and one of the most consistent challenges bosses cite year after year is convincing workers to embrace ongoing training.
Using a good shop management software program, review workers' efficiencies, keeping your eyes peeled for obvious trends. A simple but effective example would be technician Joe, who scores strong efficiency numbers on most types of jobs-except electrical repairs. Suppose the records confirm that during 2006, Joe's performance on electrical jobs is consistently lower and substantially lower than routine mechanical work. The first thing this year-end review suggests is that he needs additional training in electrical diagnosis and repair.
Discuss these results with Joe and then budget for additional training for him in 2007. But also explain that if he doesn't grasp the topic and improve his efficiency in this area, you aren't going to assign any more electrical jobs to him, or you'll only assign the work as a last resort.
Beware! As I have discussed in previous columns, lower-than-normal efficiency numbers on electrical- and driveability-related jobs really may be your fault. The reason is simply that you're not charging enough to cover the time it's taking to do this more demanding kind of work.
But don't limit your year-end analysis to the computer data. Poll your managers and technicians about the kinds of jobs the service department either turned away cold or else took in and then struggled to complete or did not finish. For example, there could be increasing numbers of diesel-powered light trucks in your community. Perhaps diesels are increasing among the fleets your dealership services. If so, then it's time to gear up for additional diesel services.
Interviewing service personnel may reveal the need to update or replace certain specialty tools or pieces of shop equipment. To me, it's better to hear the bad news now so you can plan and budget for these improvements in 2007. Ultimately, it's really good news if it leads to better profitability for the dealership and more income for the techs.
Furthermore, your year-end review may help you improve profitability by being much more selective about the vehicles you service. The efficiency numbers and personal discussions may convince you to politely turn away certain kinds of vehicles, or it could tell you it's time to subcontract certain kinds of jobs to local specialists. Today, more than ever, it's impossible to be all things to all purchasers of automotive services. It's impossible to do all vehicles all the time and do them well.
Last but not least, your personal interaction with service personnel helps improve worker loyalty by making each employee feel more important-more involved in the operation of the dealership or service shop.