Workshop efficiency – improving performance
Service managers fully appreciate the challenge of maximising the use of their workshop resources – especially technician time. Every minute that is spent working on a vehicle is of value. Every minute that is lost, is a cost to the business.
‘When you are in a business where you exchange time for money, you had better get it right because you only get one chance.” Jeff Smith, ‘How to Make More Profit with Your Service Department’
The first priority is the optimisation of productivity, utilisation and efficiency is to ensure that there are tools available that can record their activity accurately and ideally through an automated system. Manual methods are a tedious, time consuming task and restrict the ability to identify areas for improvement in productivity.
In a survey conducted by ADP 60% of its customers expressed concern regarding workshop utilisation and the importance of the service department as a contributor to the business overall.
“A tough year that will need us working to improve a number of things by a small amount rather than look for a big item that can be solved by a single ‘silver bullet”
“We must concentrate on achieving [our] key performance indicators’
“Service will suffer until the new car market returns. Need to really control costs for 12 months plus”
The Facts
ADP conducted a benchmarking exercise amongst a group of its customers who use Autoline Workshop Management. The module includes functions to plan, record, control and measure technician activity. The following were compared:
1. Setup and usage
– Use of workshop management and technician clocking
– Use of idle codes for productive and non-productive activity
2. Performance evaluation
– Workshop KPIs – Efficiency, Utilisation & Productivity
– The amount of hours clocked to ‘no work available’
The overall efficiency levels of the benchmark group appeared to be higher than the industry average implying that the participants operate a profitable service department. It is worth mentioning that focusing on efficiency levels alone does not take into account the time that technicians are not working. A technician may consistently complete work well within the specified manufacturer repair time schedules but may not be fully productive throughout the day.
How Autoline can help?
The Autoline Workshop Management module provides the mechanism to establish consistent processes for recording technician activity with permission restrictions to ensure they are adhered to. This gives the workshop controller complete control as well as the flexibility to setup additional codes and technician clocking options. For example: idle codes can be categorised as productive and non-productive.
The job loading screen displays an overview of the repair status and technician activity. More in-depth information relating to actual, planned, unassigned and completed work is also available. Work can be filtered according to job status: i.e. no-show, waiting, in progress, stopped, completed and invoiced. Non-arrivals or delayed repairs are all colour-coded for easy identification. These tools provide the workshop controller with complete visibility of the up-to-the-minute situation enabling him to react to productivity, utilisation and efficiency level issues as they occur.
Profit impact – 1% increase in utilisation
From the ADP dealer benchmark exercise; a 1% increase in utilisation a day can result in an additional £980 gross profit per month. The figures have been calculated based on:
– £79.50 average labour rate per hour
– £70.07 average labour profit per hour
– 60% average utilisation
– 41% average idle time
– 7 technicians on average per workshop
(values from users of Autoline Workshop Management)
Assumptions -
– Increase in utilisation 1% (6 minutes per day)
– Reduction in non-productive idle time of 1% (6 minutes per day)
Profit impact - Projections
Dealer benchmark Projections for 1 Month
Utilisation - 61%
Increasing profit - £490
Combined - £980
N.B. Excludes any additional profit from parts and lubricants
In summary - the key to a more profitable workshop
Clearly, measuring technician performance is vital to improving productivity, utilisation and efficiency in the workshop and technician clocking using a fully integrated system such as Autoline is a key part of this process.
The measurement and analysis of the ‘no work available’ code reveals how busy a workshop really is. By restricting the job status codes that a technician is able to clock-off to, the workshop manager can quickly identify the reasons for low productivity and utilisation and put plans in place to improve it.
In a nutshell, a reduction of just six minutes idle time per technician per day means an additional £1000 profit per technician per year. As stated early, it is evident that focusing on making a few small improvements can bring about some very significant financial benefits. In good times or challenging times, there are small processes that can be implemented to achieve greater business success.