“Learn how to control and manage service department work input or pay the consequences – don’t end every work day wondering what the hell happened.”
Two of the most expensive weaknesses I encounter in dealer service departments are pre-loading planning and dispatch controls. While this requires a bit of scholarship, just using some so-called applied common knowledge and applied calculations make a huge difference in the ultimate financial outcome. Consider that “irreplaceable clock time” is actually the only item with which service (and parts) generates income. Any minute not productive cost some $3 in parts and labor sales.
For the repair shop, the goal is to organize an application where a workplan is somewhat scientifically calculated based on available flat rate capacity, available technical skills, diagnostic considerations, typical carryover counts, applicable recalls and related parts availability, ASM staffing, work hours, shuttle schedules, loaner counts, and even inevitable walk-ins.
Frankly, I seldom see much of the above carefully considered, let alone managed on a daily basis. The pressures from customers and ubiquitous manufacturer customer satisfaction surveys usually result in quite a bit of extra expensive support staffing, in an attempt to properly handle the resulting unplanned workflow. While on the other end, dispatch is too often more of a “pull” system than a “push” system, so that the ultimate shop output is not controlled by management, but rather individual technician desires / attitudes / moods / yada yada yada, blah blah blah.
Let’s start with the smallest of fundamentals – a one-technician shop. This would be the perfect situation to control efficiently since the entire pre-load and resulting output revolved around one producing individual. The available skill would be well understood, the continually changing daily capacity would be obvious, so that which accomplishment which could or could not be done each day would be easily calculated and controlled. In fact, while I was working with Toyota Japan, their view was that appointments were to be made for individual technicians (engineers there), so that what could and could not be done could be calculated to a finer degree. Guess what – it worked because planning was broken down to the simplest integer – one.
Today, because vehicle maintenance has morphed from once healthy packages of upkeep requirements, into a few relatively simple and marginally profitable (or not) processes, many service operations have wisely separated their tech preload into two groups – lower-cost maintenance techs and much higher paid repair techs, with a few necessary even higher paid diagnosticians thrown in.
Create the Plan
Scheduling for the individual or teamed maintenance techs differs greatly from the repair techs, since their flat rate operations are predictable, provided the quick service menu is limited to, say, a max of 60,000 mile vehicles. For instance, a proper schedule might consist of 45-minute intervals scheduled for 100% of the available tech attendance work time.
I recently worked with an excellent service director revamping his entire appointment shop loading system, including separating the quick service department into 45-minute production segments. It immediately made a pronounced difference for the QS assistant service manager in being able to grasp the planned shop load, and the appointment takers were able to do a much more effective job.
Of course, getting rid of the no appointment needed mantra helps with this snug control in meeting customer expectations – don’t set them up for predicable failure if you can’t make it happen and you know it – DUH. (Would you like your dentist to tell you of his / her new “no appointment needed” program? Likely not.)
The Big Boy
The potential output of a larger repair shop is actually just multiples of one from the technician standpoint. Each tech has a potential amount of flat rate hours he /she can / should generate each day. Carryover flat rate hours can be measured and the average established – sometimes dependent on the day of the week – but not difficult to calculate. To simplify, repair shop flat rate hour capacity is calculated using the number of techs, working hours, and proficiency multiplied together (10 techs x 8 working hours x 110% proficiency = 88 flat rate hours of capacity). Proficiency is the measurement of the flat hours produced versus clock hours worked – too often mislabeled as “productivity,” which is actually repair order clock hours versus attendance clock hours of a tech, so the maximum would be 100% – or the tech was clocked on an RO (working) the entire attendance time.
Of course, carryovers, completed diagnostics, additional found items, special ordered parts, emergencies, sold units, used cars, and just plain “show-ups” clutter this venue, so it is never pre-filled to actual capacity. Many find around 70% appointment pre-fill (Best is Flat Rate Hours or at least RO counts) to work well. Another caveat is managing skill pre-loads since many franchises require only specifically trained / certified techs to perform designated warranty work. Blocks for this have to be inserted into the pre-load mix.
I have visited quite a few shops where, for example, two ASMs (writers) would be able to successfully handle the workload effectively at 16 to 20 ROs a day each. Yet, the department will be staffed with three or four ASMs because of an uncontrolled or semi-controlled preloading plan, topped off by usually unprofitable extended hours. Each day is a combination of “watch it happen” ending with “wonder what the hell happened?” followed by multiple nerve-saving martinis in preparation for the next day of sameness. This is the perfect example of insanity as it is said.
Imagine what a repair shop dispatcher goes through attempting to satisfy an unorganized pre-loading approach. For the most part his / her day is targeted to the squeaky wheel getting the grease philosophy. Of course, one can tell the near perfect dispatcher when, in fact, everyone is pissed off. Eventually, this task turns into handing out multiple jobs to each tech along with a bit of prayer.
There are essentially two choices to pre-loading. One is to staff up expensive support personnel excessively to handle the “I don’t have a clue what is going to happen today” situation, hoping to somehow build the volume to cover the expense, or to make a determined effort to understand and take control of pre-loading details to create a smooth customer-friendly environment. Personally, I find the latter superior for creating customer and employee satisfaction and retention, as well as profitability. Of course, I have witnessed some very large service operations functioning within an unending super-sized customer market deal with little planning controls fairly well, but “market size” is the key here. For most dealers’ markets, deliberate and effective pre-loading controls are the superior choice.
So, What Now Dude?
My advice is to study thoroughly whichever appointment system you have (are stuck with), including every control it provides. Set up separate quick service venues if applicable, which are controlled differently from the repair shop, then contact your provider and ask for a very knowledgeable representative to assist you in perfecting your program.
This week an experienced service director and I spent some four hours, starting with me developing an Excel worksheet related to available daily ASM and tech skill staffing as well as department hours, perfecting the pre-loading plan in both quick service and the repair shop. We also used the resources of the provider for additional insight and direction. In only one day the difference was substantial, especially for the quick service manager, appointment coordinator, and the repair shop dispatcher. Suddenly the staff was “making it happen” rather than “watching it happen” and there were even a few high-fives passed around! Was it worth the time and concerted effort? – you betcha my brothers and sisters! Got any comments, send a note to Ed@NetProfitGroup.com – I always enjoy hearing from the chain gang.
Author: Ed Kovalchick
Ed Kovalchick is the CEO and founder of Net Profit Inc., Alabaster, AL, an international fixed operation consulting and training firm located in Alabaster AL. Mr. Kovalchick and his firm have assisted hundreds of dealers and manufacturers, and conducted workshops throughout the world for thousands of students since 1979. He has written columns for Dealer Magazine since its inception.