Shop production is about managing the technician’s time.
Production is measured as a percentage of hours billed. For example, a technician on a standard 8-hour shift who works 10 billable hours is measured as 125% productive.
With any inventory, shelf life is an important measurement. Once the second hand has moved, the technician’s inventory of time has expired and can never be sold.
There are several factors that go into managing shop production:
- The sales ability of the service advisors.
- The shop’s ability to schedule service customers.
- The mix of work that a shop sells.
- The amount non-productive time in the shop due to internal and external activities.
- Lack of proper supervision and absence of goals.
Let’s examine the last point. Most technicians I have spoken with over the past 25 years have in some way determined on their own how many hours a day they want to work.
But in most cases, there is a disconnect between technician goals and management understanding of them.
A simple way of making the connection would be for management to discuss with each technician what their goals are, establish a set of production objectives and then manage the technician toward them.
A new-car sales manager taught me the technique years ago. He started with a simple question: “How much do you want to make a month?” He then did the math to determine how many cars needed to be sold per month to get to that desired income level.
This same technique can be utilized with a technician. Ask: “How much do you want to make this year?” Then break the number down to a monthly, weekly and daily number and determine how many hours of billable time it would take to achieve the objective.
For example, the technician says he would like to make $65,000 a year. Divide that by the pay rate to determine the number of hours per year, divided by the number of weeks, divided by the number of days to arrive at a daily production objective.
So, if the pay rate is $22 an hour, it would require working 2,954.5 hours a year. That is 56.8 hours a week or 11.4 a day.
The key element is managing the production objectives. Those are goals one can work toward and management can control on a daily basis.
Assigning each technician a production objective will increase shop output. Targets must be fair and reasonable. Technician consultation and agreement is vital for obtaining buy-in.
This adds validity to the objective and the technicians feel they are part of the process. Scrutinize a technician’s skills and abilities before setting objectives.
Review one year's production performance for each of the technicians. If this information is not available, review the last 10 weeks of performance.
Meet with each technician individually and review his results against his financial goals. If there is more than 15% difference, counsel the technician that goals are not matching current production efforts.
Establish a production objective that falls within the 10% to 15% range and advise the technician that production will be measured daily, weekly and monthly.
If he has met or exceeded his production objective at least 80% of the time, consider raising the objective.
David Linton is the fixed-operations specialist for ConSep and a partner in OnCourse LLC, a training and material-development company. He can be reached a [email protected] and 205-492-6431.