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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
AAPEX 2023 Shop Owner of the Year (00:00:01) Roy Foster's background, including his family's business legacy and involvement in industry organizations. AAPEX 2023 Technician of the Year (00:00:57) Michael Miller's experience and certifications, as well as his friendship with previous Technician of the Year, Matt. AAPEX 2023 Service Advisor of the Year (00:04:37) Greg Damon discusses his shop's involvement in the community, including an exhibit at a kids' discovery museum, and the focus on training and changing the perception of the industry. The importance of apprenticeship programs (00:12:00) Discussion about the success of the NAPA apprentice program and the commitment to investing in young people, including the Roy's sons being apprentices and the need for more young people in the automotive industry. The importance of continuous learning (00:17:25) Discussion on the importance of staying humble, continuously learning, and seeking knowledge from others in the industry. The value of training and networking (00:18:22) Emphasizing the need for shop owners to invest in their employees' training, provide resources, and encourage networking within the industry. Quality control, communication, and value in automotive repair (00:20:17) Exploration of the importance of effective communication between service writers and technicians, quality control measures, and providing value to customers through clear diagnosis and explanation of services. The mentoring program (00:24:49) Discussion about the benefits of having a mentoring program in the shop, with a mentor guiding and teaching a new technician. Increasing sales volume through mentoring (00:25:54) Exploring how having a mentoring program can increase sales volume and profitability for shop owners. Changing the perception of the industry (00:28:02) Highlighting the need to change the perception of the automotive industry as a high-tech, clean environment with opportunities for growth and advancement. The recognition of the industry's high-tech profession (00:32:41) The professionalism and high-tech nature of the automotive industry. The importance of teamwork in the automotive industry (00:33:01) The importance of having a great team of technicians and owners to succeed in the industry.
Thanks to our Partner, NAPA Auto Care Learn more about NAPA Auto Care and the benefits of being part of the NAPA family by visiting https://www.napaonline.com/en/auto-care 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
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By Hands On
I keep getting a request now and then to go to someones house. I am starting to wonder, is it because they think it would be cheaper, or is it like in that show billions, where the guy has so much money, he can afford to pay chef ryan to come to his house to cook dinner.
How much would it take to get each of you to come to my house to work on my car? Honest answers, and you have to give an amount.
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By Transmission Repair
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