Measuring technician efficiency consistently is essential to maximizing the output of an automotive service department.
I'm constantly surprised at how many owners and managers haven't grasped the importance of this measurement yet.
Recently, I spoke to a relatively small gathering of tire dealers and service shop owners. This was an experienced, no-nonsense group of businessmen. The fact that they're active in their industry and interested in learning spoke volumes about them.
The main theme of my presentation was not technician efficiency. Matter of fact, I mentioned it in passing—almost an afterthought. I included only two Power Point slides on it to remind the audience that tracking efficiency is the foundation of a healthy service department.
But when I looked away from those slides and back toward the audience, I saw lots of bewildered expressions. What's more, several of those attending looked as if I'd told them their businesses were on fire. Considering the cost of doing business today and the cutthroat competition in the auto repair market, I assumed that most of these bosses would be watching tech efficiency numbers like hawks.
Apparently they weren't.
Measuring tech efficiency may be a new and/or different idea to some readers—but hopefully you're open to the idea. This measurement is simply the ratio of labor time billed out vs. the labor time required to repair the vehicle. In other words, it's the time you charge the customer divided by the time it actually took your tech to fix the customer's car.
Suppose you charged a customer an hour's labor and your tech actually spent an hour fixing the car. If so, then one hour divided by one hour is one. One times 100 percent equals 100-percent efficiency on that job.
But imagine that it took the tech five hours to fix the vehicle. But for whatever reason, you only charged one hour labor. This means you have one hour billed divided by five hours of fix-it time. The result is 0.2. Doggone it, 0.2 times 100 percent is a measly 20-percent efficiency.
Ideally, a tech should reach 100-percent efficiency on every job.
Achieving this is a daunting task. Arguably, three big factors impact efficiency out in your service department. First, modern vehicles are very complicated. Second, most bosses reading this column require their techs to work on a relatively wide range of vehicles. The more complicated and more varied the vehicles are, the tougher it is to achieve 100-percent efficiency on every job.
Third, like it or not, a certain amount of specialization develops in every service department. It's only human nature that techs gravitate toward the ranges of auto repair and diagnosis that suit them. You may have generated enough service volume to keep each tech busy with the services and repairs they do the best. That's less likely to occur when you're fighting to keep the bays filled in the first place.
Technicians' efficiency scores usually suffer when you move them out of their automotive "comfort zones."
OK, now imagine that you're an owner or manager and you haven't monitored tech efficiency in the past. Then you begin measuring efficiency—with your own stop watch and clipboard if necessary. Typically, the numbers I've been shown here are 50-55 percent. Indeed, there's plenty of room for improvement.
You may think of improved efficiency as a source of untapped income. Grab your calculator and experiment with the numbers. Note the additional income you can generate simply by moving tech efficiency solidly above, say, 50 percent and toward 100 percent.
I think this gives you plenty to mull over for now. Be sure to catch my next column for a summation of the benefits of measuring efficiency. You'll find plenty for both bosses and techs to like. I'll look for you then.