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Automotive Service Bays – Staffing By the Numbers

Posted on May 25, 2019 in Uncategorized

It seems to be a universally asked question, whether you run the service department at a large dealership, or the local 4 bay repair shop. How do you know when you have just the right amount of technicians employed? Regardless of how you pay them, if you have too many, you have idle hands, otherwise known as the “devil’s playground”. If there are too few, your technicians are overworked, causing incomplete check outs and possible quality issues.

For the sake of simplicity, let’s assume all of your technicians are flat rate employees, which is basically a fancy way of saying they are paid for the work they do and not the hours they are present. Whatever labor guide you use gives you the billable hours for the repair you are going to perform. For example, your customer’s check engine light came on. Most shops charge a diagnostic fee, assuming, of course, that more than a simple computer scan is required. The labor guide calls for 1 hour. The diagnostic routine shows that the engine is not reaching operating temperature, so it is determined that the thermostat is at fault. To replace the thermostat on this particular car calls for 1.0 hour of billable time, so the entire job pays 2.0 hours. Your more experienced technicians will typically beat this time, which is how they can turn more hours than they work. A rookie technician may take longer than two hours, though, which is how a customer is protected by the flat rate system. Otherwise, it would cost someone more to use inexperienced technicians than it would a professional!

Back to the subject at hand. In order to determine how many technicians you should employ, you will need to do some math. In most of my teaching, I always say to start with the end in mind, and then reverse engineer your way to the answer. In this particular case, let’s start by setting up the foundation of where you are currently.

1. Step one is to determine your productivity per billable hour. Basically, you take your total sales, including BOTH labor and parts, less tax, and divide that by the total number of billed hours. In the case of the thermostat above, let’s say the total repair cost is $300. Your billed hours were 2.0, so $300 divided by 2.0 is equal to your productivity of billable hours on this job, or $150. If you apply that logic to your whole operation for a full week, you will come up with a pretty reliable number to base the rest of your calculations on.

2. The next step is to determine where you are currently at. If you have been regularly turning $16,500 a week in sales, while billing a total of 110 hours, then your productivity of billable hours is $150. This is your starting point.

3. Now you need to determine where you want to go. You would really like to generate $1,000,000 in annual sales, and you know that in your case you have 50 working weeks a year, so that means you need to generate $20,000 a week ($1,000,000 / 50 = 20,000). This is your goal.

4. If you take your goal of $20,000 and subtract your starting point of $16,500, you are left with $3500 between where you are at and where you want to go. You can now divide that by your productivity of billable hours of $150, and what you get will be the number of hours you need to generate to get there! In this case, you need a technician who can turn 23 hours per week (3500 / 150 = 23.3). The way you move from where you are at to where you want to go is called your map, or your plan.

My suggestion at this point would be to look at the technicians you currently have. If you tweak your systems and make other improvements, could they turn the additional 23 hours? If the answer is yes, then make those changes so that your current crew can enjoy the benefits of your solid management skills. If the answer is no, then you need to find a technician that can, and in our business, finding a technician that can turn 23 hours is not that difficult.

One other train of thought, and one that has worked very well for me over the years, is that in a scenario like the one above, you hire a technician that can generate 35 or more hours. This now puts the pressure squarely on your shoulders to generate the business needed to keep all of your techs happy. But now let’s take a look at what happens. Your current staff was generating 110 billable hours at $150, or $16,500. You add a technician that turns 35 hours a week, and then you market your company to generate the additional business to cover the additional hours. You are now billing 145 hours at $150, or a total of $21,750 per week. Do this for 50 weeks and you now have a shop producing annual revenues of $1,087,500. You have exceeded your goal, or worse case scenario, you have given yourself a little breathing room. It is very important, though, for the sake of your technicians, that if you do this, you MUST do the marketing to generate new business within the next 30 days.

Your technicians trust you to help them provide for their families. If you are not going to get the additional business, either stick with a 20 hour tech, or plan on staying where you are.

Buy Automotive Parts Online!

Posted on May 24, 2019 in Uncategorized

Automotive parts generally cost a lot. However, if you spend a little time in doing constructive research, you will get quality materials at reasonable prices. You can see websites of so many reputable auto dealers who offer most reasonable and needed automotive parts. To get the right equipment, you need to find the sources to locate the right equipments for your vehicle. You can open your computer and get connected to the largest commercial marketplace to get your stuff. The online means help you to get simply the best way to gather the right information about almost everything.

Thanks to the wide reach of the internet, you can find so many choices selling different kinds of auto parts that provide details regarding automotive stores, distributors, dealers, suppliers, wholesalers, re-manufacturers and automotive service providers. However, it is important for take all the factors in consideration before buying anything. After all, it is about your vehicle. Check thoroughly about the service, price, product quality, the store policy, warranty and contact number of the manufacture.

Apart from these, you can check many review websites that are maintained by professional agencies and past customers. You can read the guide and get a help in making the right decisions. Also, you can be assured of the quality of the selected parts. Ordering online auto parts help in saving a great deal of money as well.

So, why wait? Find out the most trustworthy and credible website to figure out what could be best for your needs.

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Automotive Service Training – Take Your Service Department to the Next Level!

Posted on May 23, 2019 in Uncategorized

Recently I spent some time speaking with a friend who is a middle manager for a medium size luxury car dealership. It came to my attention through our conversation that some dynamics within his dealership aren’t working the way they should and this has been stifling the productivity. For example; the sales people bring him deals in which the paperwork is not filled out or the required information such as driver license are missing from the file.

I asked the question, “Who makes these people accountable”? Well the surprising thing is that like most dealerships, the managers are so busy they don’t have any accountability measures in place to counteract this persistent problem. Usually the managers are so busy putting out fires due to the very items that require accountability measures in the first place.

Our conversation slowly gravitated towards the service department and centered on how that department cannot meet the needs of the sales department. New and used car inspections are being neglected and are not made to be a priority. This type of damaging scenario must be stopped at once from the management team as a collective before moving forward in a positive productive way. Considering the sales department is the service department’s best customer and the potential customers wanting to purchase a vehicle are the bread and butter of every single person employed at the dealership, you would think the issues would be resolved immediately.

I asked the question, why were the same issues repetitive and why did they keep coming back month-after-month consistently plaguing this dealership. The answer I received shocked me. The senior management had a meeting and tabled items like the ones outlined above including other issues such as the low CSI and parts obsolescence issues. Unfortunately some of the middle managers pointed fingers but didn’t roll up their sleeves and find out WHY certain issues were happening. It so happens that these middle managers also aren’t held accountable to a high enough standard to hold the employees beneath them to any sense of standards, as well the middle managers are not empowered to make accountability strategy decisions.

I truly believe that every item we discussed that evening can be rectified inside a two week period if the upper management would first hold the middle managers accountable by giving a strict outline of WHAT needs to be done WITHIN WHAT time frame. Step two is to give the senior managers the empowerment needed to hold their subordinates accountable in the same fashion. Unfortunately the top management at this dealership makes all decisions and all accountability rests within that position, nothing will change until this particular manager gives away some measure of control to the middle managers.

Meetings will do absolutely no good, until middle management takes responsibility to make decisions and hold their departments accountable on all levels. I believe that you should not emulate your boss to become them, I believe you must be yourself and make decisions that are right for your department, be responsible to the business and let that principle guide you.

Too many people try to be someone else, just be yourself and bring that quality to work with you each day. Most certainly we all have leaders that we envy and wish we could be more like them, practice the art of good judgment and good decision making and more leaders will envy you and want to be you.

In this particular case if I were the sales manager or the service manager I would be having a meeting with my entire team outlining where the issues were, what we were going to do and what is to be expected from every member of the team.

Accountability means nothing unless you follow through on your outlined list of consequences. Again, inspect what you expect! If you tell every one of your salespeople, “should a file come to the desk without the necessary required documentation you will be written up”, you better make sure you follow through on that threat! Once management writes a few people up, the message will have been sent and your problems will fast disappear. Put your money were your mouth is! Grab the bull by the horns and make good things happen, why wait for someone else to start the ball rolling. We as managers must be willing to do what is right for the business, customers and the employees who are doing it right. Bring passion and a desire to effect positive change in your department each and every day.

I purchased an on-line audio book titled Crush it by Gary Vanerchuk, I have had the pleasure of viewing some of Gary’s online videos and I have included one that kind of fits the theme be yourself at work and make good things happen, define who you are and make decisions that are right and just by using your own DNA. To see Gary’s video click on the link box to the right titled Execute on being you.

Too many middle managers get stuck in a rut of playing follower to the manager above. Don’t get me wrong here, we all have to follow our managers, when the business is stagnating mix it up, try changing a few things on your own and see if they work. You will never know how great you or the business can be unless you try. Again, to make things happen, sometimes you need to grab the bull by the horns and beg for forgiveness later rather than ask for permission to promote positive change today. Change is ongoing, roll with it!

David

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