Challenges and Opportunities
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By Joe Marconi in Joe's Blog4Typically, when productivity suffers, the shop owner or manager directs their attention to the technicians. Are they doing all they can do to maintain high billable hours? Are they as efficient as they can be? Is there time being wasted throughout the technician’s day?
All these reasons factor into production problems, but before we point fingers at the technicians, let’s consider a few other factors.
Are estimates being written properly? Are labor testing and inspections being billed out correctly? Are you charging enough for testing and inspecting, especially for highly specialized electrical, on-board computer issues, and other complex drivability work? Is there a clear workflow process everyone follows that details every step from the write-up to vehicle delivery? Do you track comebacks, and is that affecting production? Is the shop layout not conducive to high production? For example, is it unorganized, where shop tools, technical information, and equipment are not easily accessible to every technician? Are you charging the correct labor rate and allowing for variables such as rust, vehicle age, and the fact that most labor guides are wrong? Also, is there effective communication between the tech and the service advisor to ensure that extra labor time is accounted for and billed to the customer? These are a few of the top reasons for low productivity problems. There are others, but the main point is to look at the entire operation. Productivity is a team effort. Blaming the techs or other staff members does not get to the root cause in most cases.
Maintaining adequate production levels is the responsibility of management to create the processes that will lead to high production while holding everyone accountable.
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Similar Topics
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By Joe Marconi
You can't pick up a newspaper or watch the news on TV without reading or watching something about the state of the economy. No matter how this was caused, or whether we are in a recession now, or it is coming, will the state of the economy affect the Auto Repair business?
Are we recession-proof as so many say we are? Or should we prepare ourselves for tough times ahead?
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By Joe Marconi
What are your predictions for 2023? Will it be that we will face an economic downturn? Will EVs increase market share? Will the tech shortage get worse or better?
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By bantar
By Hunt Demarest. I heard about this guy, but only vaguely. He was on my eventual to-listen-to list, but it hadn't bubbled up. Who wants to listen to an accounting podcast???? Well, the timing was right and I saw a new Podcast entitled "Accounting for Internal and Warranty Work". I listened and was pleasantly surprised. First, a shout-out to Hunt. He's not boring. This is very important as I normally listen to these while commuting. I don't want to fall asleep while driving! He's likeable, and he covers his subjects quite well After listening to this podcast, I immediately revamped my Warranty Work accounting method. I know knew WHY it was important to follow his process for dealing with warranty work. Previously, we just ate the costs and didn't document them religiously. I spent the time to fix up all of 2022 with some correcting journal entries.
His CPA firm focuses on auto-shops. It seems that he is crowd-sourcing his topics by asking for topics or creating topics from frequently asked questions. There was a podcast on advertising. How much should you spend? Is zero enough? Is 100K monthly enough? There was another on Tax Tips and common questions, such as "Can I pay for my goomah with business funds?" (OK, not really, but you get the picture). Where are the legal boundaries with taxes? What qualifies and what doesn't? Is accelerated depreciation best?
TLDR: Great podcast. Not boring, in spite of being accounting. Auto Shop focused. I recommend that you listen.
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