Everyone can relate to getting to the end of the week and wondering, “Where did the time go?” You can have the best intentions of what needs to get done, but interruptions, delays and new surprises affect your productivity both at work and at home.
But after a weekend to relax, we always come back ready to make the most of the time ahead and plan to accomplish everything on our lists; however, we never actually answer the question of “Where did the time go?”
Knowing where the time went is critical for profitability when your revenue stream is based on selling minutes.
Charge Out Efficiency is the most commonly tracked time in a service department. This is the time spent on a repair compared to the time charged for the repair. But, how good of a job is your team doing keeping a technician busy? This can be tracked by knowing your shop’s productivity or better yet, the productivity of each technician. Productivity is comparing the hours a technician is available against the hours they are on revenue-generating jobs. To ensure you know how productive your shop is, you must first track their time in your building, including the time spent on non-revenue generating activities.
A lack of work is the number one source of non-revenue time for a technician. If you can see your month-to-month productivity trend, you will see yearly trends of the slow times. Any service employee will have a strong gut feeling when things slow down, but knowing the number of hours lost due to lack of work can allow you to set sales goals and develop marketing plans to target the slow periods with the right amount of work to keep everyone busy. If you are fortunate enough to have a consistently productive shop, it may be time to add another technician to the team and look for more work. There is no better way to build revenue than adding another technician, as long as you have the work to support the hire.
There are many benefits to knowing each technician’s productivity numbers when managing your service departments. Have a monthly work order for each technician where their non-revenue time can be tracked and broken down into different categories or delays. Knowing the time lost because of parts delays, moving equipment, talking to customers, or shop clean-up can give you an opportunity to turn non-revenue hours into revenue-generating hours.
A simple discussion with a high non-revenue technician may reveal they don’t charge clean-up time for a repair job, will spend large amounts of time helping customers diagnose problems on the phone for free, or need coaching on scheduling their jobs to minimize parts delays. When you can see where the time has gone, you can begin to look for ways to improve. If you can find two more revenue hours per technician a week on a staff of six mechanics, you will find 576 hours in a year. That is almost $70,000 to your bottom line with a $120.00 per hour shop rate. There are many opportunities out there if you go looking.
Every hour that you can change into a revenue opportunity is driving profitability. By focusing on building a high-productivity shop, you are improving your gross margin and putting your department and dealership on a path to financial success. When time is what you are selling, when asking, “Where did the time go?” is a very important question, make sure you know the answer.
Article Written by Scott Brigden, Aftermarket Specialist and Trainer with NAEDA’s Dealer Institute.
Scott Brigden is a trainer with NAEDA’s Dealer Institute. Prior to joining DI as an aftermarket specialist and trainer, Scott held various training and leadership positions across several dealerships in Canada, and he currently manages a truck repair shop. He looks forward to helping dealers succeed by improving their parts and service operations.
Top Metrics to Watch is an ongoing feature brought to you by the association’s Dealer Institute to help dealers better understand key performance indicators and industry metrics to effectively manage their businesses.
