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KPI Mastery

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  1. KPI Mastery

    KPI Mastery

  2. I completely agree with Wheelingauto as a lot of people understand these terms to mean different things. We work with dealers and vehicle importers in roughly 20 countries, and this does get a bit confusing some times. As a way to define the perspective of my answer, we actually utilize three terms when monitoring performance Metrics. The first is Productivity, which can also be referred to as clocked hours. Basically it's a comparison of how long your tech was clocked into your shop as compared to how many hours they were clocked onto vehicles. So if they were in your facility and available for work for 8 hours, and clocked onto actual jobs for 7.2 hours, they would be considered 90% productive. The second term we look at is efficiency. Think of it as how efficiently is the technician working during those clocked hours. Referring back to the last example, if your 90% productive technician was clocked on vehicles for 7.2 hours, yet invoiced 9 hours, (or billed 9 hours), their efficiency would be at 125%. The final figure we look at is called Utilization, which isn't too common a term in the United States, but is very common overseas. Utilization is a comparison of Invoiced (Billed) hours as compared to Available Hours. Again referring to the above example, your technician invoiced 9 hours while available for 8 hours in your facility. This results in a Utilization of 112.5%, which is the target we look to achieve with our dealers on a consistent basis. As you can see, you can now fluctuate between different techs and personalities where some techs are highly productive but not as efficient, or vice versa of lower productivity yet higher efficiency. As long as the Utilization at the end of the day, month, year is averaging 112.5%, you're reaching your targets. Another thing to realize is that this is a shop average, so a department with 8+ technicians may have some techs not achieving this while others are others exceeding it. We try to focus on averages realizing that due to the different types of jobs (gravy work vs. longer troubling jobs), you may not have every technician achieving this, so again, focus on the workshop average. Now I'm sure there will be a lot of people on this thread with different definitions and there is no right a wrong way to define these measures, as long as you are in fact measuring them. This is just the way we do it and the targets we set for the dealers and shops we work with.
  3. Just seeing this post now and enjoyed reading through it and hearing everyone’s perspective. To answer your initial question, Yes, there is a “Sweet Spot” in our industry and with a good understanding of performance metrics, as well as the processes necessary to improve them, it’s not unattainable. I’ve been in our industry for 35 years now, running my own shops for about 17 of those. While we all realize it’s a tough business, what I’ve found to be most effective is process implementation that’s proven to drive performance. Tyrguy seems to be coming very close to the ideal at 95% and I commend him on a job well done with putting out numbers like that, as the national average is far lower than this. A few months ago my company surveyed hundreds of shop owners at SEMA, having them take the KPI Challenge, and we found that the average shop is running at 60-65% workshop utilization. This result is also consistent with OEM Dealers in over 20 countries, as our company has been working internationally with OEM’s for over 20 years now. I’d invite you to take the KPI Challenge when you have a moment, as this will allow me to see your exact numbers and possibly I can then help you attain your goals. You can take the KPI Challenge on our homepage at www.KPIMastery.com

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