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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
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
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