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Shop production is a hot topic these days.  High production results in higher sales and profits.  But there seems to be so many obstacles to overcome to achieve high production levels.  

I was discussing production with a few shop owners, and one shop owner mentioned that he recently hired a shop foreman; an “A” tech in his early 50’s.  The foreman uses his knowledge and skills to organize the work flow.  For younger techs, it’s even more important that they know how to work and keep productive.

What are your thoughts?   Does anyone else have a foreman or similar position?  And how does this role affect production?

 

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    • By Joe Marconi
      Not every shop pays flat rate; for many reasons.  So, many techs are on hourly pay.  There is nothing wrong with hourly pay, as long as you have an incentive program in place that promotes high production levels to avoid complacency.  For hourly paid employees I strongly urge you to have a pay plan that rewards production levels on a sliding scale.  
      As a business coach, I have seen too many times shops with low production levels and high tech payroll due to overtime pay. Overtime pay must not be used to get the jobs done with no regard to labor production.  Limit overtime and create a strategy that increases production and rewards techs with production bonuses.  By the way, there are many ways to incentivize techs, it's not all about money. 
      Overtime without high levels of production will eat into profits and if not controlled, with kill your business. 
      If your shop is an hourly paid shop, what incentives do you have in place to maintain production levels? 
    • By Joe Marconi
      I remember being at a meeting with my staff where I voiced my opinion on an important issue. When I was finished, I asked if everyone was in agreement. Everyone nodded their heads yes. 

      After the meeting, one of my service advisors told me that half of the employees did not agree with me.  When I asked why did they agree, he replied. “You’re the boss, you intimidate others.”

      This made me think about my leadership style.  Being unapproachable will prevent you from hearing other opinions; which is important to the success of the company.

      When speaking with your employees, ask a lot of questions. Avoid giving your opinion until you have heard from others.  Praise suggestions and the opinions of others, and thank others for speaking up.

      The most successful teams are those that build strategies through a collective effort.


       
    • By Joe Marconi
      Got your attention? Good! Before I start, let’s get something out of the way. Does technician aptitude or attitude affect the productivity of your shop? Absolutely. But this is the exception, not the rule. If your overall production levels are low, that is the sole responsibility of management. Let’s look at a few reasons for low production levels.
      The first area I want to address is billing. Many hours of labor go unbilled due to not understanding how to charge. This area is most prevalent with testing and inspecting. If your technicians are handed a work order, with no direction and not a clear process of what to do, or when to stop and ask for labor testing fees, there will be a ton of wasted labor hours, never to be recovered again.
      Next is training. Service advisor and technical training is a key component to high production levels. But let’s not forget in-house training. All policies and procedures must be reviewed often and refined if needed. Your team must follow a process. With no road map, labor dollars are lost. By the way, if you don’t have procedures in place, you need to make this top priority. Every successful organization has a detailed set of workflow guidelines.
      Let’s look at shop layout. How organized is your shop? Are shop tools and equipment readily accessible? Or do techs tend to wander around looking for the shop scanner or TPMS reset tool. Are stock items such as wiper blades and oil filters fully stocked and cataloged properly? Do technicians have separate access to technical information? Or are techs waiting to use the same computer station? Again, all these things kill labor production, which kills labor dollars.
      Next up is scheduling. There should be a structured approach to scheduling where the day is balanced with enough opportunity to make profitable sales. Have a process where vehicle history is reviewed before the customer arrives. Any previous service recommendations or notes is any opportunity to make a sale. But the key ingredient is in preparation. A customer that’s scheduled for an oil change may have forgotten that he or she received a recommendation for tires. Informing the customer at the time of scheduling and preparing for the work ahead of time, greatly improves productivity and overall efficiency.
      Another problem area is with service advisors and their workload. The service advisor, in many situations, handles the front counter, the phone, scheduling, helps with dispatch, part procurement and sales. All these tasks are critical to the daily operations. However, nothing happens in the shop until a sale is made. You need to look at your service staff. Are estimates getting processed quickly and upsells getting back to the technicians in a timely manner? If not, this is another area where production suffers. Carefully analyze your staff and run the numbers. More estimates processed means more sales and higher profits. Adding a service advisor or an assistant may be the missing link in a shop’s production problem.
      Knowing your numbers is another key component to attaining high production levels. I will refrain from giving you benchmark numbers, since all businesses models are different. With that said, you need to determine your breakeven and establish your labor goal for the week. Then knowing your labor goal, you need to calculate how many labor hours you need per technician. Then, you need to communicate this number to each technician. Having clear expectations and knowing the goals of one’s position is essential for hitting production goals.
      With regard to the technician’s responsibility, let’s remember one important fact; the technician has control over his or her efficiency. That’s it. If you dispatch a four-hour ticket to a tech, the ability of the tech to meet or beat that time depends on the technician’s skill, experience and training.
      There are a lot of other factors that influence production, such as the right pay plan and hiring the right people. But perhaps the most important influence is leadership. The shop owner or manager must study and look at the entire operations of the shop. Productivity goals must be established and then a system of monitoring production must be put into place. This includes sales goals, as well. Service advisors and technicians must get continuous feedback on their progress. Improvements in sales and in production, no matter how small, must be celebrated.
      The bottom line is this: If you’re not happy with your production level, you need to look at every aspect of your company that influences production. Improvements in key areas put technicians in a position to win. When they win, so do you.
      This story was originally published by Joe Marconi in Ratchet+Wrench on March 1st, 2019


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