Your Service Department’s resource is … TIME.
Every Service Department endevour is a means to maximise the sale of its TIME or AVAILABLE HOURS.
Time is the most difficult workshop discipline to manage. Lost time can never be recovered. Unlike the inventories in the Parts Division or New and Used Vehicle stock: time is perishable. Managing your Service Department’s time requires constant awareness of your technicians’ activities and the various metrics that can be monitored.
6 TYPES OF TIME
There are six types of time that every Service Department manager must be aware of and manage:
Technician Attendance – This is the time the technician is on your premises and the time the technician is paid for, and includes lunch and tea breaks according to Manpower Legislation. The technicians attendance is 9 hours and excludes the legislated half hour for lunch and morning and afternoon tea breaks, Public Holidays, leave, training courses, and legislated meal and break times are excluded. This “Available Time” is the time that must be booked for sale by the workshop.
Booked Time – refers to the (work) time booked into the workshop that can be sold today, tomorrow, next week, or next month. If all the available time is not booked it cannot be sold. As a result, the technician will be under-utilised, and the earning potential for that day is less than what it should be. In addition, this will compromise the sale of parts, lubricants, and consumables. This is time lost that cannot be recovered. As important as under booking, the Service Department manager must monitor and have a follow-up process for booked no shows which is lost time that was available to be utilised but is now lost.
Clocked / Worked Time. This should reflect the actual time spent by the technician working on the vehicle. However – in practice – clocking lacks absolute discipline and as a consequence impacts on the Service Department’s Manager to accurately calculate the true workshop labour sales potential. Clocked time should NOT include fetching parts, collecting and moving of vehicles and other activities not directly associated with selling technician labour.
Sold Time is the labour cost charged to the retail customer, warranties and service plans, internal work etc, and refers to the income that is derived from the technicians work. The hours costed for sale are determined from the technicians’ description of the work carried out and the conversion of time units to a monetary value according to the prescribed labour time schedules. Correct calculation of sold time must be closely monitored by the Service Department’s Manager to ensure that all the potential revenue can be recovered. Sold time must and always should exceed clocked time.
Idle / Non Productive Time is the difference between Available Time and Clocked / Worked Time. It is time that the technician was not utilised and represents lost labour sales against salary paid. In the South African context technicians are paid for 9 hours but can only be utilised for 8 hours as a consequence of legislated tea and lunch breaks of half-hour for lunch and 15 minutes each for morning and afternoon tea breaks.
GAINING ACTIONABLE INSIGHT FROM THE RELATIONSHIPS BETWEEN TYPES OF TIME
To effectively manage technician time, one must understand how the ratios of the various times can help maximize time utilization and impact service – revenue.
Worked Hours / Available Hours The terminology for this ratio or percentage may differ depending on the vehicle brand or dealer management principal. In certain instances, it is referred to as Productivity, in other cases Utilization. Irrespective this ratio ultimately tells us how much of the technicians’ Available Time was converted to Worked / Clocked Time. In the South African context the maximum that can be yielded is 88,9%. (8 hours worked/booked vs 9 hours available time). In order to accurately analyse this metric it is essential that technician clocking is disciplined and diligent. Who is responsible for assuring that this happens? Obviously the Service Manager, but also the Foreman and Bookings Clerk. The Service Department not only needs to book the Available Hours but the available work needs to be correctly assigned to ensure that technicians workload is evenly allocated. The aim is to ensure that each technician has sufficient work to keep him productive throughout the day. Benchmark ± 90%
Sold Hours / Worked Hours The terminology for this ratio or percentage may differ depending on the vehicle brand or dealer management principal. Generally referred to as Efficiency it is a measurement of the technician’s ability to produce hours (revenue) from the work they are given. The result may vary by the complexity of the job (routine service vs diagnostic repair), the skills of the technician, and the effectiveness of the support processes which include parts availability, parts acquisition, quoting and approval, tools and equipment, and parking lot management. Benchmark ± 103% > 120%
Sold Hours / Available Hours The terminology for this ratio or percentage may differ depending on the vehicle brand or management system. In certain instances it is referred to as Productivity, in other cases Efficiency and gives an indicator of overall performance. A low value generally indicates not enough work or pacing / taking too long to complete allocated work. Benchmark ± 110%
Idle Time / Non-Productive Time Idle Time is the potential time bought from a technician that was not actually spent working. Accurate technician clocking is crucial in determining if there is a problem with technician utilisation. If a technician has excessive Idle Time: 1. is the technician being allocated enough work? 2. is the workshop booked to its potential available hours? 3. is the technician’s time wasted collecting parts or getting the vehicle into his work-bay? 4. is the technician doing tasks other than selling labour? 5. is the technician doing work without a Repair Order? 6. is the technician's time unaccounted for?
All of the above metrics rely on technician clocking that is disciplined and diligent. If not, then analysis of lower than expected benchmarks, or excessively higher values than expected cannot be accurately determined. How would the Parts Department operate if the parts disintegrated on the shelf as the day progressed. How would the Sales Department operate if vehicles disintegrated in the showroom / stockyard. How much of an urgency would there be in selling these parts and vehicles? The same applies to the Service Department where the Available Hours must be seen as perishable inventory unlike the inventory in the Parts and Sales Departments.
TIME, if not utilised, is gone forever!
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