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By Joe Marconi in Joe's BlogTypically, 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.
Did you know the data portion of Digital Vehicle Inspections is the least important piece of the process? It's about communication with the customer and using DVI as a tool to drive revenue. Craig O’Neill, VP of Training, Autotextme.com. Listen to Craig’s previous episodes HERE Key Talking Points
DVI is a data collection tool- ‘digital’ is the mode, and the data is the least important piece; it’s about the customers that are driving the car that is the most important part. What is their use of the vehicle? What is your communication training for advisors? Level 1 is basic customer information, Level 2 is transactional data about the vehicle, Level 3 is relationship building with listening and asking open-ended questions. Failure- processes and procedures, top-down support, data DVI as a part of your CRM (Client Relations Management)- CRM has three main components, orientation, information (subject to availability, quality, depth ... this is where DVI's are in this format, and configuration (structures incentives and controls) Performing inspections is NOT what drives more revenue. 300% rule- 100% of vehicles get inspected, 100% of the findings get estimated, 100% of estimated items get presented to the customer
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While at the Ratchet and Wrench Management Conference, I was able to review most of the management software packages available. I have a few observations to share that might be helpful. Each software package has its own pluses and minuses, but, I see some high-level commonalities amongst them.
At a high level, you can separate software packages into two groups based on age. The longer a software package has been available, the more likely that many of its features are highly refined and give you the most controls. The disadvantage of an older software package is that they are too busy keeping their customer base happy with fixes and minor features that they don't have time to take the leap of innovation (e.g. DVI). If the platform is really old and/or they are not charging enough money monthly to have the revenue to hire a good team, they may not be able to completely rewrite their software to utilize newer technology features. For these software packages, you are forced to change vendors to adopt new the new features. On the other hand, if the software package is new, they go straight for the snazzy features and also, try to fix the perceived problems of the legacy software packages. They excel in the basics, but lack the depth of feature functionality that only time brings. Mind you, both types of companies are trying to reach feature parity. New companies need to flush out features, adding complexity and older companies are working to build the snazzy features. Both of these take time.
For the record, I'm using Protractor. I can tell you all of the good and bad of this package. I used my in-depth knowledge of this program to compare it to the newer packages. In other forums, the two main contenders for new appear to be:
TekMetric ShopWare Other New: Shop Monkey AutoLeap Older More Mature Systems: Protractor Mitchell (I didn't look at this one) NapaTracs (I didn't look at this one) Many others not at this show I liked the snazzy new features that I saw in each new package, but quickly recognized that in my daily use, I'm using certain mature features that are not present in the new packages.
Another observation is that each software package somewhat enforces a workflow methodology. You can choose to fight their internal structures (and lose), or go with their model. I noticed a few idiosyncrasies, but, they are all trending towards a seemingly similar workflow. This requires scrutiny when selecting a software package. The new guys are often pushing their "better way" as a solution to the problems of old. For instance, ShopWare had a unique approach to canned jobs that deserves investigation that I didn't notice in other packages.
So, when shopping, make note of the real features that you must have. Don't be fooled by the shiny new outer skin. Balance it with your real needs.
I do see that some of these new contenders are investing much money into development of new features, so over time, they will likely build the feature that you need today. As well, some mature packages are investing in the future.
I will say this loudly. Your software vendor must be charging you healthy monthly fees to have the money necessary to continue to innovate. If you gravitate to the lowest price, features could take longer or never come. Just like us, we must first survive before we can do good work and be able to pay the bills.
If only we had a crystal ball to peak at the next 5 years. As a shop owner, you might still be booked out 2-3 weeks, but with gas prices, inflation, the great resignation, interest rates, and new and used car costs, what do you need to pay attention to in the short term to continue to be profitable and relevant? Chris Cotton, AutoFix Auto Shop Coaching, Chris Cotton Weekly Blitz Podcast Hunt Demarest, CPA, Paar Mellis and Associates, Business by the Numbers Podcast Joe Marconi, Executive Council Member, Elite Worldwide. Joe’s Episodes HERE. Michael Smith, Managing Partner, Herzberg Smith and Co, Michael Smith’s previous episodes HERE Jaron Kleber, National Sales Manager, Repair Shop of Tomorrow
Key Talking Points
Your employees should be your greatest strength. Invest in THEM to secure their future and the future of your business. Connect the dots with their goals and the company’s goals. Don’t ignore the people in your shop. Don’t get complacent. Productivity, efficiency, and effective labor rate are the 3 most important numbers in your business Systems, operations, and procedures. SOPs will set you free! Important to train the whole team on “what right looks like” so that everyone is rowing the boat in the same direction. It’s not about the one, it’s about the all. TEAMWORK makes the dream work. The automobile service industry is undergoing a literal revolution. The boomers are increasingly aging out, the number of independent competitors is shrinking fast, being a future top-shop will require much more business sophistication in the future, and the third-party investor feeding frenzy has begun. Smart owners need a strong business strategy, steeped in their legacy and exit strategy, to lead through these changes rather than just playing catch-up. Baby boomers retiring- 80-85% aren't worth making a private equity investment Shop owners coming from outside the industry- thinking from a business perspective Elevating the industry through training and coaching Profit vs cash- cash brings personal spending habits into play, preserving cash Will it slow down? It matters what you do during the good times that will help you survive the bad times. Don’t let car count carry you. Redefine who you are and honed in
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Set your sights on Las Vegas in 2022. Mark your calendar now … November 1-3, 2022, AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at AAPEXSHOW.COM/WEBINAR.
Shop-Ware: More Time. More Profit. Shop-Ware Shop Management getshopware.com
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By Joe Marconi
While there are many different business models among all the automotive independent repair shops, what types of services or repairs give your auto repair shop the best ROI?
Preventive Maintenance Services? General Repairs, steering, suspension, brakes, etc. Diagnostic/Electrical, etc. Or other?