Service department: Operate at your peak

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This story originally appeared in the Dealernews August 2010 issue.

Last month I wrote about the tracking of three key measures in service: productivity, efficiency and proficiency. Now let’s see what we can do to improve each area.

Productivity: Remember, this is a rating of how well we keep the techs busy on billable work. Work can be both external and internal. External work is normally referred to as customer jobs. Internal work is performed for other departments in the store. For example, refurbishing a used vehicle for sales would be internal. You may also do sublet work for other shops such as machining or dyno tuning.

One could say the path to great productivity starts with the adage “Nothing comes for free” — or, in your case, almost nothing. Your goal should be to charge for at least 90 percent of work that service performs, whether it’s the good ol’ guy who has done your window cleaning for the last 10 years (external work) or the dealership owner who needs an accessory installed on his rider bike (internal). The labor rate may vary, as it should for special customers, but the work should not be done for free and must be tracked. As for the other 10 percent — the freebie where you fix a comeback, do a favor for your best customer, or have techs help unload a semi — the fact is there are times where it’s just good business and good teamwork to help out, without having your hand out.

Achieving good productivity relies mostly on the service writer’s ability to load the schedule — to keep the techs from being idle. Productive shops:

• maintain a seasonally adjusted emergency allowance factor that doesn’t hold back too much time for emergencies such as broken-down travelers (a guide, not a rule, to keep the daily schedule full is to use about a 50 percent allowance in the summer and a zero allowance in the fall and winter) and

• have backup work that they can roll into the work area anytime regular work runs low. Examples:

o Used-bike refurbishment (coordinate through the sales department)

o Accessorize new bikes (coordinate through the sales/parts departments)

o Wreck bike repairs

o No-rush customer bikes (always ask customers when they want their bikes back)

o Winter storage vehicles (probably the single most lucrative thing a snowbelt shop can do to maintain productivity)

o Fix-it work such as reorganizing take-off parts, verifying and destroying warranty parts, equipment maintenance, and painting and remodeling.

Efficiency is all about how quickly techs can correctly complete the job as compared to the labor being charged. If the tech completes a job in 60 minutes and you charge for 60 minutes, he or she is 100 percent efficient. If it’s an entry-level tech, the completion time (actual hours) will likely be closer to 120 minutes, meaning the tech is only 50 percent efficient.

What makes a tech efficient? The following are a few of the best practices I’ve witnessed.

• Experience and desire come first. The experience of having done the job several times and the desire to do it better and faster each time. Not every tech possesses both traits.

• Zero redundancy. Great techs work around the bike like a clock, performing tasks as they go and rarely retracing their steps.

• Pulling all tools needed for routine services in one effort. Some techs color-code their tools for routine jobs to eliminate excess trips to the toolbox.

• Having all tools for the job close at hand. The tech’s duty is to accumulate all hand tools necessary. The shop’s is to provide all special tools and equipment in good working order and within easy access. Case in point: Shops often spend thousands on a dyno room that rarely gets used because the dyno configuration makes it too much trouble to roll bikes on and off. Suggestion: Hold a meeting with all techs and ask them what equipment could be moved or upgraded to save them time. The results could make the whole shop more efficient.

• Two lifts per tech is a good idea because the average time to roll a bike off and another on when parts or an approval are needed is 12 to 18 minutes. It’s more efficient to turn around and start working on the bike that’s waiting.

• Having a porter roll the bikes to and from the techs’ areas saves time, as does having a parts-to-service liaison. The first step for the liaison is to stage all parts needed a couple of days before each appointment in separate bins identified by customer or VIN.

• An alert system techs can use to signal the service advisor they need assistance (parts, emergency work approval, etc.) without having to leave their work area saves precious time. One shop I saw used a flag system. When the tech put the flag up it meant he or she needed help, and the advisor came a-callin’.

• Realize you can’t be efficient with customers hanging around the techs. Use the insurance issue excuse and have them wait elsewhere.

Proficiency, as stated last month, is a product of productivity and efficiency. If you load the shop with work and your techs can complete the work efficiently, the shop will enjoy a good proficiency rating. This does not guarantee you’ll make a profit, of course, as other things come into play such as your parts sales and other costs of doing business. Look for future articles that address these areas. Send your requests to dakoenterprises@cs.com or editors@dealernews.com so I know what’s most important to you.