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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 Joe Marconi
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By carmcapriotto
Join Matt Fanslow as he answers some questions from his listeners in his 'mailbag.' Matt discusses the hiring bonus dilemma, compensation and profit sharing, the power of training, the flat rate pay system, book recommendations and how to create a network of industry peers.
Have a question for Matt to answer? Email him at: [email protected]
Show Notes
Hiring Bonuses for New Techs (00:02:27) Discussion on the fairness and impact of hiring bonuses for new technicians and how it affects existing employees. Broken System of Compensation (00:04:58) Exploration of the different ways technicians are compensated and how it can lead to resentment and difficulties in hiring new technicians. Ethical Profit and Long-Term Benefits (00:07:31) Explanation of how Matt's shop rewards employees based on ethical profit and how hiring bonuses can benefit both the shop and existing employees in the long term. The Mismanagement of Compensation (00:09:59) Discussion about the mismanagement of compensation in the aftermarket automotive industry and the potential impact on employees. Concerns about Flat Rate Pay (00:13:33) Addressing concerns about transitioning to a flat rate pay system and the potential negative impact on technicians' income and job satisfaction. Recommended Books for Auto Repair (00:19:49) Discussion on the importance of reading books on auto repair Building a Network in the Automotive Industry (00:26:06) Advice on how to build a network of connections in the automotive industry, including attending trade shows and utilizing social media. The importance of networking (00:29:42) The value of building relationships and networking in the automotive industry.
Thanks to our Partner, NAPA Autotech napaautotech.com
Email Matt: [email protected]
Diagnosing the Aftermarket A - Z YouTube Channel HERE
Aftermarket Radio Network: https://aftermarketradionetwork.com/
Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
Is your business prepared for cyber-attacks? It's not a question of 'if' it's a question of 'when.' Our panel discusses the importance of network security and protecting businesses from cyber threats. They emphasize the need for multiple layers of protection, including two-factor authentication, and caution against phishing attacks. They also highlight the importance of training employees to recognize such threats and having a proactive approach to cybersecurity. Let's stay ahead of potential threats and make it more difficult for hackers to target our businesses. Chris Cloutier is co-owner of Golden Rule Auto Care in Dallas Texas and CEO of Autoflow. Chris’s previous episodes HERE Jay Mikulovich, founder and CEO of Revival Technology LLC. Stan Stokes, Founder & CEO of Iron Fist Marketing Consultants. Stan's previous episodes HERE Show Notes:
The importance of two-factor authentication (00:02:07) Explains the significance of using two-factor authentication to add an extra layer of security to passwords. The vulnerability of software packages (00:03:48) Discusses how no software is perfect and can have vulnerabilities, emphasizing the need for multiple layers of security. The dangers of phishing attacks (00:08:06) Explains the concept of phishing and how hackers use email to trick users into clicking on malicious links or attachments. The challenges of being reactive to security breaches (00:10:04) The difficulties of being reactive to security breaches and emphasize the importance of being proactive in protecting business operations. The vulnerabilities of relying on technology (00:11:24) The vulnerabilities of relying heavily on technology and the need for shop owners to understand their level of vulnerability and seek expert advice. The importance of backups and cybersecurity measures (00:20:38) Discussion on the need for backup plans, having multiple backups, and the importance of cybersecurity measures to protect against potential data loss or breaches. Difference between IT support and network security (00:23:39) Explaining the distinction between IT support and network security, and the importance of understanding and vetting service providers to ensure proactive cybersecurity measures are in place. Updating Network Security (00:27:58) Discussion on the importance of regularly updating network firewalls, equipment, and passwords to prevent hacking and security breaches. The Risks of Delaying Updates (00:28:51) Exploration of the consequences of not updating desktops, including vulnerabilities, outdated patches, and potential hacking threats. Password Management and Security (00:30:41) Advice on using password managers, generating unique passwords, and the importance of having strong, lengthy passwords to enhance security. The importance of strong passwords and data encryption (00:37:03) Discussion on the significance of using strong passwords and encrypting data to protect against cyber threats. Securing networks and vulnerabilities (00:37:54) Exploration of the importance of securing networks, including the use of firewalls and regular security scans, to prevent hacking and data breaches. Understanding APIs and their role in data protection (00:39:34) Explanation of APIs (Application Programming Interfaces) as a means of limiting data access between systems and the importance of authentication in ensuring secure communication. Take baby steps to minimize risk (00:46:05) The importance of taking small steps to implement cybersecurity measures and reduce the risk for business owners. Be the harder target (00:47:11) Being proactive in implementing security measures, such as cameras and updates, to make your business a less vulnerable target for hackers. 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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