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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
The EV/Hybrid training you've been searching for. Carolyn Coquillette, the President and CEO of Earthling Training and Earthling Automotive, and Jack Rosebro, the Head of Training at Earthling Automotive discuss their insights on the growing market of EVs, their unique approach to EV training, and how they adapted to the challenges of the COVID-19 pandemic. Carolyn Coquillette, the President and CEO of Earthling Training and Earthling Automotive. Listen to Carolyn’s other episodes HERE. Jack Rosebro, the Head of Training at Earthling Automotive. [email protected] Show Notes:
Earthling Automotive Training The Dream of Being an EV Training Specialist (00:02:53) Carolyn and Jack discuss the watershed moment that led them to focus on EV training and the similarities to their previous experience with hybrid vehicles. Small Class Sizes and Effective Learning (00:08:41) The importance of small class sizes for effective learning and how it was influenced by their experience training through COVID-19. Utilizing technology in training (00:09:49) Enhancing the learning experience in the classroom. The immersive learning experience (00:11:10) The decision to have individual students work independently rather than in paired groups, allowing for a more immersive learning experience. The importance of basic electrical knowledge (00:18:16) Discussion on the significance of understanding basic electrical concepts in automotive diagnostics. Assessing technicians' background knowledge (00:19:18) The process of assessing technicians' electrical knowledge before enrolling them in specific classes. Tracking progress and improvement (00:23:32) The use of case studies and comprehensive notes to track technicians' progress and ensure effective training. Training in the Deep End (00:25:46) Discussion on the importance of hands-on training and the limitations of slide presentations. Investing in Community Colleges (00:28:05) Highlighting the value of community colleges in providing hands-on training and the need to support and invest in them. Facing the Unknown (00:31:12) Encouraging instructors to embrace new technologies, such as EVs, and challenge themselves to continue learning and adapting their teaching methods. The Paradigm Shift in the Automotive Industry (00:33:53) Discussion about attracting people with a computer science mindset to the automotive profession and the need for a paradigm shift in what a car is. The Profound Impact of EV Training (00:35:04) A story about a student who realized that everything is different when working on Teslas and how it can change a person's perspective forever. Thanks to our Partners Shop-Ware and Delphi Technologies Shop-Ware: More Time. More Profit. Shop-Ware Shop Management https://getshopware.com/ Delphi Technologies: Keeping current on the latest vehicle systems and how to repair them is a must for today’s technicians. http://DelphiAftermarket.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 -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
Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
Recorded Live at AAPEX 2023, Bill Hanvey and Paul McCarthy give insights into Right to Repair, what it takes to put on a massive show encompassing 2,600 exhibitors, and 46,000 buyers, and a recap of Magic Johnson's engaging keynote. In a recent study, by 2035 there could be a 54% decline in market share due to repair restrictions, translating to $92 Billion lost by the independent aftermarket. This issue is not just about the industry, but also about the consumers who rely on affordable and accessible auto services. Bill Hanvey, President and CEO of the Auto Care Association. Find Bill’s other episodes HERE. Paul McCarthy, President and CEO of MEMA (Motor & Equipment Manufacturers Association). Find Paul’s other episodes HERE. Show Notes
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Click to go to the Podcast on Remarkable Results Radio
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