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Auto 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.
Spotting the Early Signs of a Downturn: Adapting, and Driving Toward a Stronger Future - Chris Cotton Weekly BlitzBy carmcapriotto
The Weekly Blitz is brought to you by our friends over at Shop Marketing Pros. If you want to take your shop to the next level, you need great marketing. Shop Marketing Pros does top-tier marketing for top-tier shops.
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In this episode of Auto Fix Auto Shop Coaching, Coach Chris Cotton discusses the potential signs of a recession and its impact on the auto repair industry. He highlights indicators such as rising unemployment rates, declining consumer spending, and stock market volatility. Cotton also discusses the mixed effects of a recession on the industry, including potential parts obsolescence and reduced cash flow. He advises listeners to prepare by diversifying services and increasing their online presence. The episode emphasizes the importance of preparedness and not panicking during economic downturns.
Recognizing the signs of a recession (00:01:06) The speaker discusses the topic of recognizing the signs of a recession and mentions a post in a shop owner group that sparked interest in the subject.
Rising unemployment rates (00:02:24) The speaker explains that rising unemployment rates can be a sign of financial trouble and shares their thoughts on the current unemployment situation.
Declining consumer spending (00:03:20) The speaker talks about how a dip in retail sales figures can indicate consumers tightening their belts and expresses concerns about maxed-out credit cards and defaults on payments.
The impact on the auto repair industry (00:09:40) Discussion on how recessions can have a mixed impact on the auto repair industry, with people potentially delaying buying new cars and needing to repair their existing vehicles.
Potential challenges during a recession (00:10:53) Exploration of potential challenges during a recession, such as parts obsolescence, reduced cash flow, and supply chain issues.
Actions to take to prepare for a recession (00:12:00) Advice on actions to take for auto repair businesses to prepare for a recession, including diversifying services, increasing online presence, stockpiling cash, improving efficiency, engaging with the community, and being adaptable and innovative.
Recognizing the signs of a recession Indicators of a recession: rising unemployment rates, declining consumer spending, stock market volatility, flattening or inverted yield curve Impact of government policies, global events, and consumer sentiment on the economy Importance of staying informed and not panicking Need for preparedness and taking action before a potential downturn Impact of a recession on the auto repair industry Delayed car purchases leading to increased need for repairs Concerns about parts obsolescence and availability Effects of a recession on the auto repair industry: reduced cash flow, less disposable income, supply chain issues, potential affordability of skilled labor compromising quality of work Actions to prepare for a recession in the auto repair industry: diversifying services, increasing online presence
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Unintended Consequences: The Impact of Over Reliance on Databases and AI - Diagnosing the Aftermarket A to ZBy carmcapriotto
Matt Fanslow discusses his concerns about relying too heavily on databases and artificial intelligence in automotive diagnostics. He emphasizes the potential long-term repercussions of this reliance on critical thinking skills and reasoning. He also brings up the issue of flat rate pay and how it can affect diagnostic work. He also mentions the challenges when a database lacks information on newer cars or technologies. This episode is a reminder of the importance of maintaining a balance between utilizing technology and preserving our critical thinking skills in the automotive industry.
The dangers of relying on databases and artificial intelligence (00:00:12) Matt discusses his concerns about relying too heavily on databases and artificial intelligence in automotive diagnostics and the potential long-term repercussions of this reliance on critical thinking skills and reasoning. Issues with flat rate pay and diagnostic work (00:01:22) Matt talks about the flaws of flat rate pay and how it can affect diagnostic work. The example of misdiagnosing a Chrysler vehicle issue (00:05:19) Matt gives an example of a Chrysler vehicle issue, highlighting the importance of developing diagnostic skills instead of solely relying on databases. The Potential Repercussions of Database Reliance (00:09:54) The potential long-term repercussions of relying on databases and not developing diagnostic skills. The Limitations of Databases and Artificial Intelligence (00:10:54) The limitations of databases and artificial intelligence, using the analogy of people getting lost without GPS. The importance of balancing short-term gains and long-term losses (00:20:17) Matt emphasizes the need to consider the long-term consequences of relying on databases and technology and suggests taking short-term hits for long-term wins.
Thanks to our Partner, NAPA AUTOTECH napaautotech.com
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Host Carm Capriotto welcomes Lee Rhodus, Territory Sales Manager for Deckman Oil, to discuss the current state of the oil industry. They delve into the history of Deckman Oil, the importance of oil in various industries, and the different types of motor oil available. They also touch on engine oil viscosity grades, the advancements in additive technology, and the challenges faced by repair shop owners in managing different oil inventories.
Lee Rhodus, Territory Sales Manager, Deckman Oil.
Watch Full Video Episode The history of Deckman Oil (00:00:44) Lee Rhodus discusses the origins and history of Deckman Oil, a fuel distributor that started in 1924 and will be celebrating its 100-year anniversary next year. The science behind synthetic oils (00:01:06) Carm and Lee talk about the creation of synthetic oils after World War II and the fascinating science behind them. Different types of motor oil and their marketing (00:04:30) Lee explains the differences between synthetic blend, conventional, and full synthetic oils, and how they are marketed in the industry. The rise of lighter grade oils (00:09:01) Discussion on the shift from 0W-20 to 0W-16 and the increasing popularity of lighter grade oils for fuel economy. Additive packages and oil quality improvement (00:12:35) Exploration of the advancements in additive technology and the overall improvement in the quality of motor oil over the years. Managing oil inventory in repair shops (00:15:25) The challenges faced by repair shop owners in managing the increasing variety of oil viscosity grades and the shift towards smaller packaging options. The lithium supply issue (00:18:23) Discussion on the tight supply of lithium and its impact on the prices of oil and grease. The use of calcium grease as an alternative (00:20:26) Exploration of calcium grease as a viable alternative to lithium grease due to its competitive pricing and water wash out protection. Changes in API specifications for motor oil (00:24:39) Explanation of the updated API requirements for motor oil to meet the needs of modern engines, prevent issues like low speed pre-ignition, and ensure turbo and engine integrity. Oil analysis for automotive fleets (00:27:51) Discussion on the limited use of oil analysis in automotive fleets due to conservative drain intervals.
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
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