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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
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 Joe Marconi
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By carmcapriotto
George Kingman discusses the importance of work-life balance, psychological safety, and cultivating a positive work environment. He shares personal experiences and lessons learned from his journey in the automotive industry, emphasizing the need for passion and positivity. Kingman also discusses leadership strategies inspired by George Washington and how they can be applied in modern businesses. He stresses the importance of making employees feel valued and connected to their work. George Kingman, Blue Sky Tire and Auto, Georgia and Illinois. Advanced Shop Leadership Show Notes
Advanced Shop Leadership Group https://www.advancedshopleadership.com/ Safety and the Importance of Passion (00:02:18) The role of safety in fostering passion at work, both in terms of physical safety and psychological safety. The Contagion of Passion and Negativity (00:03:35) How passion is contagious and can uplift others, while negativity can also have an impact on the work environment. Finding Passion and Building a Team (00:06:44) The importance of finding the right people (the "who's") to support and complement your skills and passions in order to build a successful team. The importance of learning from mistakes (00:09:57) The value of allowing employees to make mistakes and the learning opportunities that come from them. Creating a positive work culture for work-life balance (00:12:09) The importance of fostering a positive work culture to achieve a proper work-life balance and how it affects employees' motivation and happiness. Psychology articles and work-life balance (00:22:15) Discussion on the importance of work-life balance and the misconception that more time off is the solution. Creating psychological safety at work (00:23:21) Exploration of the significance of making employees feel happy and safe at work, rather than solely focusing on time off or monetary compensation. Building a positive culture and purpose (00:24:54) Importance of creating a positive work culture and purpose, and the role of leaders in mentoring and improving the attitudes of team members. The power of bringing something extra (00:35:48) The importance of going above and beyond in order to achieve success, both personally and professionally. George Washington's Leadership (00:36:53) George Washington's ability to motivate his troops and redefine their purpose during difficult times. Building Positivity in the Workplace (00:38:31) Using George Washington's methods to motivate employees by sharing success stories and creating a positive culture. Taking Care of Each Other (00:41:17) The importance of taking care of teammates and spreading joy in the workplace to create a successful business. 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
Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
Tom Palermo discusses the importance of continuous training for technicians, the increasing average age of vehicles, and his strategies for fostering a positive company culture and building strong customer relationships. He also discusses the challenges and opportunities presented by electric vehicles and the importance of hands-on training.
Tom Palermo, Preferred Automotive Specialists in Philadelphia, PA. Tom's previous episodes HERE
Show Notes:
The current state of business at Palermo's (00:03:26) Tom Palermo discusses how busy his shop is and becoming the go-to shop for diagnostics. The increase in the average age of vehicles (00:04:07) Tom Palermo mentions that the average age of vehicles is still increasing due to inflationary times, as people are choosing to hold onto their cars longer to avoid car payments and increased insurance costs. Getting commitment from the team (00:05:08) Tom Palermo shares his strategy of leading from the front and actively participating in his own business to motivate his employees and create a family-like culture in the shop. Training and expanding services (00:06:28) Discussion on the benefits of cross-training technicians and expanding services to become a one-stop shop for customers. Creating a culture of learning and teamwork (00:08:03) Exploration of the importance of building a team environment, promoting culture, and providing training opportunities for technicians. Concerns and opportunities with electric vehicles (00:10:23) Conversation about consumer concerns and technician concerns regarding electric vehicles, as well as the need for businesses to adapt to the evolving automotive industry. The importance of continuous training (00:13:13) Discussion on the evolution of the automotive industry and the need for technicians and shop owners to continuously train and adapt to new technologies. The challenges of hands-on training (00:16:02) the need for hands-on training in the automotive industry and the effectiveness of learning through practical experience. Monitoring productivity and customer loyalty (00:18:16) Explanation of how monitoring productivity can be used as a training tool and the shift in customer behavior, from seeking diagnoses and getting repairs elsewhere to valuing a good shop. The value of relationships and trust (00:19:27) The importance of building relationships with customers and gaining their trust in the automotive industry. Customer relationship management strategies (00:20:28) Discussion about the various customer relationship management techniques used, including email blasts, follow-up phone calls, and special promotions for valued customers. Training for service advisors (00:25:04) The need for more training for service advisors in the automotive industry and the importance of standardized approaches to dealing with customers. Retention rate and treating employees like family (00:26:29) Conversation about the high retention rate of employees at Palermo's and their approach of treating employees like family. Creating a better work environment for technicians (00:28:34) Importance of providing a well-lit, air-conditioned, and well-equipped shop to improve technician productivity, safety, and job satisfaction. 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
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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