The automotive repair industry is more competitive than ever. With complications from technician shortages, part availability, and the increasing complexity of vehicles to repair, it’s no surprise that service centers are seeking strategies to do more with their current resources.
Whether you’re running a dealership, auto repair shop, or a collision repair center, focusing on improving the bottom line is usually on your mind. But what can you actually do to elevate your team to becoming more profitable? For starters, we recommend taking into account a couple Key Performance Indicators (KPIs) that showcase your baseline performance.
Critical continuous improvement metrics involve understanding how well your team is using their workday to complete work (productivity) and the speed at which they complete the work (efficiency). Between these two metrics, you’ll understand your shop’s capacity and how much each team member contributes to your success.
Let’s start with the basics about productivity and efficiency. Productivity is the number of hours a technician billed in a day divided by the number of hours they worked in a day. NADA recommends a baseline of 85% - 87.5% productivity for shops.
Efficiency is a different story. To calculate, take the amount of time it takes a tech to complete a repair order divided by the number of flat rate hours assigned to the job. NADA recommends that top technicians aim for 125% - 135% efficiency.
Here’s a list of five proven strategies that will help all of your team members provide customers with the best experience on their next visit.
Before you do anything, make sure you’re creating an environment that people actually want to show up and work hard at. If you treat technicians like they aren’t capable of handling the work they were hired to do, you’ll create a lot of resentment and contribute to the already sky-high technician turnover rate. Instead, try focusing on helping your team improve their repair efficiency by collecting data about each repair and using that information to drive improvements.
Shop management is critical - and it starts with moving away from paper based systems and switching to a modern shop management software. We have firsthand experience with Tekmetric and Shop-Ware. Both of these products are top tier for getting your shop running smoothly at its peak capacity while delivering a top-notch customer experience.
If your shop offers free inspections, digital vehicle inspections (DVI) are a great way to speed up your process. A DVI helps document exactly what technicians and service advisors recommend for repairs so that the customer can be fully informed throughout the entire process. This builds trust and is a great way to elevate your Average Repair Order (ARO) as customers can see exactly what needs to be repaired (and why).
When reviewing less efficient repair orders, check and see if any bottlenecks are present. If you review existing shop equipment and the layout of the shop floor, you may be surprised to find that it isn’t the best idea to keep your oil filters far away from your express station.
Combining your auto repair software of choice with DVIs will generate thousands of data points for you to evaluate. But how do you use this information to improve your shop? And what about tracking technician efficiency and productivity?
That’s where Detect Auto comes in. By embracing technology aimed to optimize your productivity and efficiency, our system captures data on how each and every RO is completed. We tell shop owners and service managers several critical stats:
This allows our system to proactively price jobs relative to your book times so that your quotes reflect how long it actually takes your shop to complete a specific task.
Example: A service advisor assigns a job to a technician on a vehicle that historically has taken longer to repair than the book time recommends. Our process automatically updates the quote on that repair to reflect the true amount of time it takes to complete so you never get burned on an RO again.
Maximizing your repair productivity and efficiency is key to growing your service center. Getting more repairs completed in your normal work hours is an incredible way to boost your revenue and profits without increasing your labor burden.