Capable tire dealers and service shop operators always measure a service department's performance before passing judgment on it. Conclusions based on assumptions or guesswork hurt bosses and employees alike.
Typically, auto repair businesses that have survived and thrived during these turbulent times share a key trait: Someone carefully gauges the performance of both service managers and technicians.
This means monitoring productivity and efficiency week in, week out. Then the boss makes adjustments to the business based on those measurements.
I referred to productivity and efficiency in a recent column (Sept. 24, 2018). Later, some readers asked me if measuring these was worth their trouble.
First, I invite them to ask bosses who already have tracked these measurements for years.
Second, I refer them to an axiom of Robert S. McNamara, former president of Ford Motor Co.
"That which can be measured can then be managed," he said. After World War II, a team of former military officers — Mr. McNamara among them — cleared up Ford's chaotic fiscal situation by applying its collective business management skills to the company. (Mr. McNamara and his colleagues were known as the "Whiz Kids.")
Third, experience has shown that you don't know where your business stands until you monitor productivity and efficiency. The results may be an urgent warning that the boss needs to make corrections. All too often, you see, the numbers are much worse than an owner or manager imagined.
OK, productivity is labor hours sold divided by available labor hours.
If your service department is open 50 hours per week, then each technician offers 50 "available" labor hours per week.
Suppose you sell 50 hours of a tech's time per week. If so, then that tech's productivity is a resounding 100 percent.
Service managers I respect report that they shoot for — and expect to achieve — 90- to 100-percent productivity per tech weekly.
Some managers have believed their service departments were doing OK. Then a colleague convinced them to begin monitoring productivity with just a pen and a legal pad — start basic.
This step revealed that their productivity was down in the range of 55 to 65 percent. I don't want to overstate the obvious, but this is far short of the preferred 100 percent.
Until they measured it, these bosses just didn't realize how much time their managers failed to account for.
Typically, productivity reflects a manager's ability to move repair jobs through the service department.
Common issues that impair productivity are inefficient shop layout, inefficient job scheduling, waiting for parts, receiving the wrong parts and/or waiting for repair authorizations from customers.
Now, suppose that one of these problems is costing Joe the technician 15 minutes per day; that's one-quarter hour per day.
Over a five-day week, that totals 1.25 hours of wasted productivity. If Joe works 50 weeks per year, the annual total of wasted time is 62.50hours (50 weeks times 1.25 hours per week).
Next, multiply your hourly labor rate for Joe's skills times 62.5 hours. A seemingly insignificant one-quarter hour per day really adds up — and that's just the calculation for one tech.
Installing an effective shop-management program on your business' computers will help your crew monitor/manage productivity/efficiency. What's more, a variety of companies offer detailed seminars on the topic.
Last but not least, improved productivity boosts employee morale because it reduces the stress on everyone in the service department.
That's my brief rundown on productivity. In my next column, I'll do a similar summation of technician efficiency.