Nov. 2, 2009 – Increasing tracking in the service department

These articles recap some of the opportunities uncovered by Gart Sutton & Associates’ powersports specialists during consulting visits.
These are followed by recommended actions that address the issues. Our goal is to provide ideas to help improve your dealership.

Dealership details
This established dealership recently moved from their location in a small town into a new, high-quality facility with freeway frontage. There are more than 200,000 people within a 30-mile radius and they are 60 miles from a major city. They sell close to 1,000 major units plus a significant volume of power equipment. The store must implement significant changes to survive and grow profitably.
The past three editions looked at the dealership as a whole, the store’s sales and F&I departments and the store’s parts and accessories department. This edition looks at the dealership’s service department.

Analysis
John, the service manager, has been with the dealership for many years. He has a strong background in service management, is detailed and dedicated. He has good customer relations skills. However, he lacks computer skills.
Overall, the department is showing a gross profit of 66 percent. This is just under the benchmark of 70 percent, which puts the tech compensation slightly high at 34 percent. The techs performance numbers are fairly good with efficiency (billed hours / actual hours worked) at 97 percent (100 percent-plus is the goal). Productivity (actual hours / available hours) is on target at 86 percent. Proficiency (billed hours / available hours) is slightly under benchmark at 83 percent. Dollars and hours billed per RO is low, however. They are scheduling a bit too much of the tech’s time at 70 percent. Fifty percent would be more reasonable to allow for walk-in or priority services. They could increase sales considerably by using a reception checklist on every write-up. This was discussed and the tool was provided.
They use a 1.5 multiplier of flat rate times as the basis for billing. This is pretty much an industry standard practice. They have a menu board and are just beginning to organize their menu billing system. It was suggested that they look at using a large, flat screen TV and put the menu on a PowerPoint. This way the menu could cover more services without taking up a lot of wall space, and be easily edited or updated.
On several occasions the service writer was not available and John was in his office when customers were at the write-up counter. He has a window to the write-up counter, but he was either on the phone or did not look up. These types of customer greeting and assistance issues need to be addressed quickly.
The service manager is not running the essential tech tracking reports. A spreadsheet was provided for tracking the techs. It is important to take the time to perform these tracking and reporting procedures. Tech performance needs to be tracked weekly and the results provided to all the techs. Peer pressure is a valuable management tool in the service department.
Dealership and department management is not familiar with the state laws that govern warranty reimbursements, ROs and authorized signatures. It was recommended that they find this information on the Web and become familiar with it.
There is no marketing being done in the write-up area and tech diplomas are not posted. This would help them increase sales and raise the perceived value of the department.

Action Items
Develop written “non-negotiable” standards lists for department personnel. Hold staff accountable.
Become intimately familiar with all state laws governing ROs, warranty reimbursements, authorized signatures and phone authorizations.
Begin using a reception checklist for units coming in for service. Use a digital camera to document their condition.
Ensure every work order has an authorized signature prior to starting any work.
Begin daily tracking of technician hours on the spreadsheet provided. Monitor efficiency, productivity and proficiency. Post results in a break room on a weekly basis.
Track available hours as the hours techs are scheduled to work.
Monitor department GP on a monthly basis.
Reconcile open ROs on a weekly basis. Reduce the number of open ROs.
Utilize the shop doors to prevent customers from entering the work area. Once this is accomplished, check for possible insurance discounts.
Set goals for the techs and provide rewards for exceptional performance.
Inventory all special tools periodically and provide a check-in, check-out sheet on a clipboard for techs.
Display technician diplomas in the write-up area to increase the perceived value of your department.
Utilize open wall space for selected P&A displays.