July 2012, Auto Dealer Today - WebXclusive
A lot of dealers and managers are asking, “What’s new in fixed operations?” When it comes to technology the answer is, a lot. When it comes to managing a service operation, the answer to that same question – what’s new? – is, not much! The following story is an example of the point I’m trying to make.
During one of my workshops, a service director approached me during lunch to tell me how much he was enjoying the material covered. He then asked, “Do you offer any software for your dealers?”
I replied with a respectful “No, I don’t. Why do you ask?”
He stated that he uses software purchased from a fixed operations consulting company. He went on to explain this software can drill down to every measurable statistic on a repair order and provides him with a multitude of reports. “I can tell you how many light bulbs a technician sold last month.”
Next, he proudly opened his laptop to review his reports with me, and yes, there was most definitely a multitude. I asked him what he did with the reports, and he stated that he looks at them each and every day. OK, so what do you do with that information? He responded with, “I study it.” OK, so what happens after you study it? He responded with, “I analyze it.” OK, what then? He stated he points out to his managers/advisors where they are weak and tells them they must do a better job.
My response was, “There is obviously a lot to talk about since you are only averaging 1.1 hours per repair order (HPRO) with a labor margin of 66 percent, retail parts margin at 34 percent, shop productivity averaging 85 percent and one-item ROs topping 55 percent, with a declining RO count.”
Technology is a wonderful thing but it cannot manage; it can only measure. Now, I am a firm believer that you can’t manage what you don’t measure, but this fixed operations director needs to start doing something to positively affect the performance of his underachieving fixed ops team. It’s not enough to just tell managers and advisors they need to do better. They need goals, new processes, accountability, coaching and most of all, training to learn new skills.
So if this manager were to ask, “What’s new?” I would share with him the following:
1. Hold a 15-minute daily sales meeting with your service and parts team, and review month-to-date performance, identify missed profit opportunities and decide on an action plan for today.
2. Spend one hour each morning observing the service reception process (proper meet and greet, verification of customers’ prime concerns, 100-percent walk-around presentations and 100-percent menu presentations). Also, shake some hands, and welcome your customers.
3. Inspect the dispatch process for equitable distribution of ROs (waiters) and technician wait time. (This should take about 15 minutes.)
4. Observe a technician performing a complete 27-point vehicle health check. (This should take about 15 minutes.)
5. Listen to incoming service calls, recorded or live, with advisors, appointment coordinators, and/or BDC employees. Are all customers offered an appointment? (This should take about 15 minutes.)
6. Determine which technicians are performing below 100-percent productivity and find out why. (This should take about 30 minutes.)
7. Review your exception report to identify your discount kings and queens in the service drive. (This should take about 15 minutes.)
8. Observe the back parts counter for unauthorized discounts, speed of service to techs and fill rate. (This should take about 30 minutes.)
9. Review daily performance reports. (This should take about 30 minutes.)
The above tasks total less than four hours a day, which for most fixed ops directors is less than half of their workday. I believe the most important part of a manager’s day is to manage the performance of their employees. When I review the above processes with managers, the most common reaction is astonishment with this overwhelming workload, followed by, “I don’t have time to do all that every day.” That makes about as much sense as a football coach saying he doesn’t have time to design plays, hold practice and evaluate the team’s performance.
The bottom line is if a manager does not have time to manage their employees, what is it they are doing all day? Do sales managers not have time to manage the efforts of their sales teams? Do general managers not have time to manage the performance of their department managers? As a dealer, are time excuses an acceptable response for lack of performance? Technology is great, but a top-performing manager must take the data provided by that technology and get out of his chair to work directly with their fixed operations team daily. So, what’s new?
Vol. 9, Issue 5