Your Schedule; Are You Getting the Most Out of Your Department?

Do you need/want more production?
Do you want to be more profitable?
Do you want increased customer retention?
Do you want greater customer satisfaction?

If you answer yes to any or all these questions, then your service department may be a perfect candidate for implementing alternative schedules.

What are alternative schedules? Alternative schedules are departmental structures that allow our service departments to be open more hours with a full staff while offering our employees more time off. The structuring of your service department to a 4-10 or 3-13 schedule structure will offer the following:

  • Increased convenience for our customers
  • Increased customer retention & customer satisfaction
  • Increased production & profitability
  • Increased employee satisfaction

The above-mentioned schedules will allow your fixed operation departments to be open six (6) days per week ten (10) to thirteen (13) hours per day while not over working your service staff.

An example of the increase in technician work hours:

  • Your service department has ten (10) bays and works ten (10) technicians eight (8) hours a day Monday through Friday and five (5) technicians four (4) hours on Saturday.
    • This schedule will offer four hundred twenty (420) technician work hours per week.
  • Let’s say your service department is on a four (4) day ten (10) hours per day schedule.
    • You now have 15 technicians working for your service department, (10 technicians working per day, each technician 4 days per week, 10 hours per day). This schedule would offer the service department six hundred (600) technician work hours per week.
  • That is an increase of one hundred eighty (180) technician work hours along with an additional sixteen additional open hours per week for our customers.

An example of the POTENTIAL increase in profitability:

  • Your service technician staff is 100% productive (hours work compared to flat rate hours produced).
  • Your overall effective labor rate is $83.75 with a gross profit percentage of 73.5%.
  • These additional technician work hours would be worth:
    • 180.0 FRH’s (Technicians @ 100.0% Productive) X $83.75 = $15,075 Additional Labor Sales Per Week.
      • $64,823 Additional Labor Sales Per Month
      • $777,870 Additional Labor Sales Per Year
    • $15,075 Additional Labor Sales Per Week X 73.5% Labor Gross Profit = $11,080 Additional Labor Gross Profit Per Week
      • $47,644 Additional Labor Gross Per Month
      • $571,728 Additional Labor Gross Per Month

This is profitability that should get everybody’s attention.

Let’s discuss each one of the above listed positive effects of alternative schedules in depth.

  1. Increased customer convenience – Customers that defect from our service departments generally do so not because of price but due to convenience. Our competitors, the independent repair facilities, have been capturing the business from our service departments over the years not for the quality of work they offer or due to pricing in most instances, but largely in part to the greater convenience they offer over most dealership service departments.
  2. Increased customer retention is influenced probably the most by increasing the convenience we offer to our customers. I recommend researching the number of UIO’s (units in operation) in your assignment market area to see how many of your customers are utilizing a non-franchise repair facility for their vehicle needs. Then ask yourself why your dealership does not have that customer’s business.
  3. Increased customer satisfaction – if our departments are more convenient for our customers by offering improved service hours for their needs, customer satisfaction will increase.
  4. Increased production and profitability – Increasing our hours of operation will allow the service department the ability to
    • Be open more hours
    • Work more technicians
    • Service more vehicles
  5. Increased employee satisfaction – Studies have shown today’s employees consider time off more important that compensation. A traditional service department structure requires our service consultants and technicians to work a minimum of five (5) days a week with weekend service hours being structured into their schedule from one (1) to four (4) Saturdays per month. Can we say employee burn out?!!
    • The above-mentioned schedules offer our employees three (3) to four (4) days off every week.

Now that we have discussed the benefits of alternative schedules let’s look at the challenges of implementation of one of the schedules.

  1. Staffing – Shifting your service department to one of the schedules will require the addition of staff, as much as a 30% increase.
  2. Decrease in outside vendor support. This will be most noticeable on your weekend service. Rental vehicle locations and parts suppliers generally close at the mid-day point. This will require an evaluation of your service department’s self-sufficiency concerning parts stocking along with loaner/rental vehicle options.
  3. Shop loading – Close attention will be required to ensure your customers know the service and parts departments are open the additional hours. The adage of “if you build it they will come” is only partially true. You must let them know it has been built. Service management must review the departmental scheduling daily; you cannot allow the service staff to stand idle during the extended hours of operation.

If this article concerning implementing an alternative fixed operations department schedule interests you and you feel it will be too large of an under-taking considering all the parts of the processes that must be developed and implemented, contact M5 Management Inc.

Written by Kemp Evans

This is the kind of expertise that M5 Management Inc. specializes in. If you are interested in more information regarding alternative schedules or any other fixed operations improvement please contact me at (205)-603-1996 or kempevans@m5ms.com.

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