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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
Electric vehicles (EVs) are a hot topic in the automotive industry and for good reason. They offer numerous benefits, such as reducing emissions and improving fuel economy, but they also present some challenges, including a lack of infrastructure and range anxiety. Pete Meier shares his perspective on the impact of EVs on the industry and offers some insights into their history and future. His message is one of encouragement and reassurance, emphasizing that technicians have risen to the challenge of the rapidly changing industry.
Pete Meier, Creative Director, Motor Age, and industry trainer. Bikers C.A.R.E Inc. Listen to Pete’s other episodes HERE
Watch Full Video Episode HERE The Rise of EVs (00:03:28) Forecasted sales of hybrid and battery electric vehicles and the reality of the US fleet of cars on the road. The History of Electric Vehicles (00:06:06))Pete Meier shares the history of electric vehicles, including the first propulsion system and the first rechargeable batteries. The Model T Ford (00:06:59) How the Model T Ford put the death toll on the first EVs due to its affordability and mass production. The Wild West of Automotive Innovation (00:08:08) The early days of electric vehicles and how it was a time of innovation and startups. Environmental Issues of the First EVs (00:08:50) The first electric vehicles were created to solve an environmental issue caused by horse-drawn carriages in New York City in the early 1900s. The Rise of Hybrid Vehicles (00:13:23) The history of hybrid vehicles, starting with the GM EV1 and leading up to the popular Toyota Prius. Greenhouse Gas Emissions (00:17:04) Greenhouse gas emissions and how they contribute to global warming and climate change. California's Zero Emissions Vehicle Sales Plan (00:23:16) Discussion of California's plan to achieve 100% zero emissions vehicle sales by 2035 and its implications. European Union's Zero Emissions Car Deadline (00:25:36) Discussion of the European Union's plan for all new cars to be zero emissions and cannot emit any CO2 by 2035. Alternative Solutions to Electric Vehicles (00:28:46) Discussion of alternative solutions to electric vehicles, including plug-in hybrids and synthetic fuels, and the importance of considering the entire lifecycle of a vehicle. Training and Education on EV Systems (00:32:26) Pete Meier encourages technicians to seek out training and education on EV systems, especially those who are up and coming in their careers. Passion to Help Abused Children (00:34:57) Pete's passion to support abused children and recommends listening to his episode on Remarkable Results Radio. Passion To Support Abused Children – Chris and Pete Meier [RR 805] Thanks to our Partner, Dorman Products. Dorman gives people greater freedom to fix vehicles by constantly developing new repair solutions that put owners and technicians first. Take the Dorman Virtual Tour at www.DormanProducts.com/Tour
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