Let’s imagine you take trip to a destination you have never been. You embark on this journey without any sense of the direction or even a map to show you how to get there. This same type of situation occurs in a large majority of service departments every day. The service staff shows up for work without any goals or narrative of what defines a good day.
What is technician production? Technician production is the measurement of billed hours as a percentage of hours worked. For example, a technician who works an eight (8) hour shift and bills ten (10) flat rate hours is measured as 125% productive.
Technician production objectives are one of the very basic foundations of any automotive dealership’s service department’s profitability. Production management remains one of the most under used and mismanaged controllables in the industry.
We must ask ourselves why this happen. Why would we start each month, each week, or each day without a clear defined goal or what we must do to achieve our production goals? When this occurs, it is usually due to the following.
Service management does not:
- Understand technician production
- Know how to establish production objectives
- Know how to review or track the set objectives
- Know how to hold the staff accountable for their production performance
- Know how to encourage and/or motivate the staff to strive for more while keeping morale up
Keep in mind the inventory of technician billable hours starts to expire once the hands on the clock begin to move; once this inventory of hours expires they can never be recouped. This is no different than when an airplane takes off with empty seats; those empty seats can never be sold once that flight takes off.
Technician Production Objectives
Technician production objectives are “realistic” flat rate hour goals established to improve technician efficiency and shop productivity. When technician production objectives are established correctly there is generally an increase in daily billable hours and consistent work flow. They also create a process to consistently monitor and adjust your department’s shop loading.
Production objectives are normally introduced when implementing some sort of advanced production (i.e. simple support or lateral support, etc.) but can be utilized in any shop structure.
Let’s consider that production objectives already exist in every shop. Ask any flat rate technician what constitutes a good day for them and they will tell you the number of flat rate hours that makes them feel good. Now with this in mind, would it not make sense to take what the technician considers a good day and match it to what the department needs and have a process in place to manage toward the collective objective of the shop?
Considering how much the implementation and management of production objectives can have on a service department, why hasn’t every shop performed this simple improvement?
When I have asked Service Managers if he/she is tracking technician production, I will generally hear one of the following answers:
- Yes, they already track production
- But not with established performance objectives
- There are few if any technician meetings to discuss production performance
- I have been meaning to do this
When a Service Manager answers no, I ask, “Why not?” The new and used sales departments have been doing this for years with great success. Here are some of the excuses I have heard over the years:
- Tracking production will not help my shop
- I do not have time
- To run the report
- To meet with the technicians every morning
- There are here eight (8) hours a day so I expect eight (8) flat rate hours or more
- This would work if all technicians were created equally
- This would work if there was equality in the dispatching
- Accurate technician and skill group match
- Favorites are being played
- Proper shop loading
- Loaded for production, not vehicle count
- Production loading to match technician skill groups and performance within these skill groups
- o Staff members scheduling work to fit their comfort level, not the department’s capacity
- If you do not think you have a problem in this area, mystery shop your service department on a Saturday afternoon for what should be a same day repair. You may be surprised at excuses you get as to why they cannot get that vehicle in for repair and/or service.
- My shop is “unique”, it just will not work, you do not understand
- Your shop is not “unique”
- You need customers, sales and staff to perform these repairs
- o Service departments around the country fight the same challenges. It just depends on management and the staff’s conviction to succeed. Lose the excuses.
Implementation and Management of Production Objectives
Implementation and utilization of production objectives will improve the production of your staff. A consideration for thought– increasing production in an 8-10 technician shop by 10 percent will have the same effect as adding one technician.
Establishing Production Objectives essentially involves determining the average flat rate hours produced by each technician over a given period and applying a performance increase. This performance increase must be realistic and agreed to by service management and the technicians. Service management must interview each of the technicians, listening to their concerns regarding roadblocks and determine solutions to help them achieve the agreed-on production objectives.
While production objectives are an effective way of increasing shop production, capacity, and vehicle through-put, objectives will require consistent attention by service management. For production objectives to be highly effective they will require service management review and discussion with the staff daily. Daily production meetings are necessary. Human beings are goal-driven by nature and will almost always strive to exceed every goal that is set in front of them.
When production objectives are implemented properly, they will improve employee loyalty, satisfaction, and retention. The technicians will no longer feel as if they are the only ones that worry about how many hours they produce–they realize they now have assistance in helping them accomplish their personal financial needs.
Remember, technician production objectives must be implemented “with” and “for” technicians to really be effective.
Production objectives will not only improve shop loading but department forecasting. One question I always ask management in every store I go into that is not tracking technician production is how they provide an honest realistic forecast based on statistic data.
Written by Kemp Evans
I must ask: How much do you want to make this year? This is the kind of process improvement M5 Management Inc. specializes in. If you have any questions on this or any other service department process improvement call me at (205) 603-1996 or email me at email@example.com.