Automotive & HD Business Management Articles.
Bob Greenwood. January 10, 2013. ( over 8 years ago ) 1,401 views
You should already be discussing the next round of labour rate settings and category settings that will have to take place in each operation. Your target is to have each shop up and running with this by November 1st and consistently reporting by February 1st, 2014.
As vehicle technology continues to improve coupled with the upcoming introduction of Aftermarket Telematics, we must ensure our measurement procedures are correct to maximize productivity, profitability and client retention. There are a few reasons for this new detail:
p>• The expansion of “talent” within a shop will continue to diversify over time including the office.
• Moving a shop’s processes from preventative maintenance to service on need will not happen overnight, (actually estimated to be a 1 to 2 year transition), however, we must make sure each individual’s role within the shop is clearly understood and measured properly to make this transition. As in breaking out the parts into Aftermarket parts, Dealer Domestic and Dealer Foreign Nameplate, which allows us to evaluate personnel, equipment and training needs, so too, will the different labour components moving forward. The labour breakout will point out the “level” of competency required in each shop based on the number of billed hours in each category
• By the time we’re finished in 2013, the standard number of labour rates for an average Independent shop will be 5, namely Maintenance, Diagnostic, Re-flash, Tire Install and Fluid. Some shops will move to 7 with the addition of Exhaust and Mid-Duty Vehicles servicing. The multiples to set each rate will be established each year once all the annual burden numbers are in.
As with the introduction of anything new, some people in the industry will think this is overkill. They thought that when we introduced the breakdown of the parts category and the setting up of the diagnostic and re-flash category, yet this information has been invaluable in assessing a shop’s sales mix, customer/client mix, competency levels and where to focus management’s efforts to maximize productivity and profitability.