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Auto shop owners are always looking for ways to improve production levels. They focus their attention on their technicians and require certain expectations of performance in billable labor hours. While technicians must know what is expected of them, they have a limited amount of control over production levels. When all factors are considered, the only thing a well-trained technician has control over is his or her actual efficiency.
As a review, technician efficiency is the amount of labor time it takes a technician to complete a job compared to the labor time being billed to the customer. Productivity is the time the technician is billing labor hours compared to the time the technician is physically at the shop. The reality is that a technician can be very efficient, but not productive if the technician has a lot of downtime waiting for parts, waiting too long between jobs, or poor workflow systems.
But let’s go deeper into what affects production in the typical auto repair shop. As a business coach, one of the biggest reasons for low shop production is not charging the correct labor time. Labor for extensive jobs is often not being billed accurately. Rust, seized bolts, and wrong published labor times are just a few reasons for lost labor dollars.
Another common problem is not understanding how to bill for jobs that require extensive diagnostic testing, and complicated procedures to arrive at the root cause for an onboard computer problem, electrical issue, or drivability issue. These jobs usually take time to analyze, using sophisticated tools, and by the shop’s top technician. Typically, these jobs are billed at a standard menu labor charge, instead of at a higher labor rate. This results in less billed labor hours than the actual labor time spent. The amount of lost labor hours here can cripple a shop’s overall profit.
Many shop owners do a great job at calculating their labor rate but may not understand what their true effective labor is, which is their labor sales divided by the total labor hours sold. In many cases, I have seen a shop that has a shop labor rate of over $150.00 per hour, but the actual effective labor rate is around $100. Not good.
Lastly, technician production can suffer when the service advisors are too busy or not motivated to build relationships with customers, which results in a low sales closing ratio. And let’s not forget that to be productive, a shop needs to have the right systems, the right tools and equipment, an extensive information system, and of course, great leadership.
The bottom line is this; many factors need to be considered when looking to increase production levels. While it does start with the technician, it doesn’t end there. Consider all the factors above when looking for ways to improve your shop’s labor production.
By Gerald Martin
No one loves comebacks. But they are a part of life. They come in all shapes and sizes:
1. Faulty parts. We have more part quality issues than ever before, including (less frequently) OEM parts.
2. Tech error. A tech fails to properly tighten brake caliper frame bolts. A belt is installed with one groove off the edge of a pulley. Some techs rarely make these errors. But mistakes will happen.
3. Warning lights on or new symptoms noted "ever since you worked on it". Always needs to be taken seriously - sometimes issues identified are fall into category 1 or 2. Or further OBD monitors ran since repairs were made and other issues are coming out of the woodwork. And sometimes people will try to pin every new issue on the shop that last worked on the car.
How do we deal with warranty cases?
When tech error is involved, is the employer responsible to pay the tech's time to correct his own mistake? Does it make a difference if there is a pattern of carelessness? If the employer picks up the tab for everything, doesn't this reward the making of mistakes?
It seems reasonable that the tech should not take responsibility for part failures not caused by tech error, doesn't it?
And what about that follow up scan to see why the warning lights are on? Should the tech handle this as a courtesy until determined what area the fault is in? It may be, after all, that he left a vacuum line off the air cleaner box. But it shouldn't take too long to know if the advisor needs to request more testing approval from the client...
And should any of these questions be influenced by whether the shop pays flat rate or hourly?
I know that's a lot of questions. But I hope it starts a conversation, because it's an area we really need to develop an SOP and stick with it.
By Joe Marconi
This week, Hunt sits down for an insightful Chat with Joelle Pollak to talk about how Promotive is tackling staffing shortages in the automotive aftermarket, offering innovative solutions for shop owners.
Expert Take on Recruitment Challenges: Dive into the complexities of hiring, focusing on the crucial balance of pay, benefits, and shop culture in attracting and retaining top talent. Promotive's Strategic Approach: Learn about Promotive’s unique strategies in talent retention and their collaboration with technical schools to address the technician shortage. Streamlined Staffing Solutions: Explore how Promotive’s comprehensive services simplify the recruitment process, saving time and efficiently matching shops with ideal candidates.
Thanks to our partners, NAPA TRACS and Promotive
Did you know that NAPA TRACS has onsite training plus six days a week support?
It all starts when a local representative meets with you to learn about your business and how you run it. After all, it's your shop, so it's your choice.
Let us prove to you that Tracs is the single best shop management system in the business. Find NAPA TRACS on the Web at NAPATRACS.com
It’s time to hire a superstar for your business; what a grind you have in front of you. Great news, you don’t have to go it alone. Introducing Promotive, a full-service staffing solution for your shop. Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit www.gopromotive.com.
Paar Melis and Associates – Accountants Specializing in Automotive Repair
Visit us Online: www.paarmelis.com
Email Hunt: [email protected]
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AAPEX 2023 Shop Owner of the Year (00:00:01) Roy Foster's background, including his family's business legacy and involvement in industry organizations. AAPEX 2023 Technician of the Year (00:00:57) Michael Miller's experience and certifications, as well as his friendship with previous Technician of the Year, Matt. AAPEX 2023 Service Advisor of the Year (00:04:37) Greg Damon discusses his shop's involvement in the community, including an exhibit at a kids' discovery museum, and the focus on training and changing the perception of the industry. The importance of apprenticeship programs (00:12:00) Discussion about the success of the NAPA apprentice program and the commitment to investing in young people, including the Roy's sons being apprentices and the need for more young people in the automotive industry. The importance of continuous learning (00:17:25) Discussion on the importance of staying humble, continuously learning, and seeking knowledge from others in the industry. The value of training and networking (00:18:22) Emphasizing the need for shop owners to invest in their employees' training, provide resources, and encourage networking within the industry. Quality control, communication, and value in automotive repair (00:20:17) Exploration of the importance of effective communication between service writers and technicians, quality control measures, and providing value to customers through clear diagnosis and explanation of services. The mentoring program (00:24:49) Discussion about the benefits of having a mentoring program in the shop, with a mentor guiding and teaching a new technician. Increasing sales volume through mentoring (00:25:54) Exploring how having a mentoring program can increase sales volume and profitability for shop owners. Changing the perception of the industry (00:28:02) Highlighting the need to change the perception of the automotive industry as a high-tech, clean environment with opportunities for growth and advancement. The recognition of the industry's high-tech profession (00:32:41) The professionalism and high-tech nature of the automotive industry. The importance of teamwork in the automotive industry (00:33:01) The importance of having a great team of technicians and owners to succeed in the industry.
Thanks to our Partner, NAPA Auto Care Learn more about NAPA Auto Care and the benefits of being part of the NAPA family by visiting https://www.napaonline.com/en/auto-care Connect with the Podcast: -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on Twitter: https://twitter.com/RResultsBiz -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections
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