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By Joe Marconi in Joe's Blog0 commentsAuto 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.
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By carmcapriotto
Thank you to RepairPal for sponsoring The Auto Repair Marketing Podcast. Learn more about RepairPal at https://repairpal.com/shops
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By Transmission Repair
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By carmcapriotto
Thanks to our partner, RepairPal. Visit the Web HERE
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By Joe Marconi
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By carmcapriotto
Recorded Live at AAPEX 2023, our panel dives into the progress of the Right to Repair bill that could potentially reshape our industry. Without the Right to Repair Act, our industry could face a staggering $93 billion hit by 2035. Kathleen Callahan, who testified in front of Congress, shared her experience and the momentum it created for the bill. It's crucial for industry professionals to understand the bill, advocate for it, and engage with their communities and legislators. Dwayne Myers, Dynamic Automotive, 6 locations, Maryland. Dwayne’s previous episodes HERE. Jennifer Keaton, Director of Government Affairs, Auto Care Association Kathleen Callahan, Xpertech Auto Repair, Englewood, FL Show Notes
IDC Hearing: "Proposals To Enhance Product Safety And Transparency For Americans: https://www.youtube.com/live/AU1vg7Xsw88?feature=shared The testimony before Congress (00:02:01) Kathleen Callahan's testimony in front of a congressional subcommittee and her experience preparing for it. Magic Johnson's keynote speech (00:04:38) Discussion about Magic Johnson's speech at the event, his support for small businesses, and the request for his support for right to repair. Getting a bill in front of Congress (00:08:13) The process and hard work involved in getting a bill, specifically the Repair Act (HR 906), in front of Congress. The legislative process and subcommittee hearing (00:08:36) Discussion about advancing a bill through the legislative process, the importance of the subcommittee hearing, and the next steps of getting the bill to a markup. The significance of markup (00:09:35) Explaining what markup means in the legislative process and how it signifies that the bill is moving forward. The importance of right to repair legislation (00:12:53) Highlighting the potential impact of not passing right to repair legislation, including the loss of market share and the negative consequences for the industry and consumers. Kathleen's Confident Testimony (00:17:27) Kathleen's confident and professional testimony, her preparation, and the positive feedback received. The Importance of Questions (00:17:59) The importance of paying attention to the questions asked during testimony and the impact of facial expressions. Strategic Selection of Kathleen (00:20:05) The strategic selection of Kathleen as the only woman shop owner from Florida to represent the industry. The importance of marketing and being active in advocacy (00:25:49) Dwayne emphasizes the importance of continuous marketing efforts and being proactive in advocating for the industry. Telematics as the new right to repair (00:26:24) Tthe significance of telematics and the potential challenges it poses for gaining access to vehicle data. Equitable access to repair and diagnostic data (00:26:47) Kathleen highlights the need for repair shops to have equal access to repair and diagnostic data as dealerships, and the importance of showing legislators the impact of the industry. Thanks to our Partners, AAPEX and NAPA TRACS Set your sights on Las Vegas in 2024. Mark your calendar now … November 5th-7th, 2024. AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at http://AAPEXSHOW.COM/WEBINAR NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/ 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 -Visit the Website: https://remarkableresults.biz/ -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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