PART I: Implementing Strategic Productivity to Maximize the Value of Your Diesel Repair Shop.
Productivity is the practice of getting the highest and best use from your resources. It means utilizing resources where they’ll do the most good, and doing so in the most effective and efficient manner to obtain the best possible results.
Quantification of productivity is always “some amount of output per some amount of input.” It follows this general formula:
PRODUCTIVITY = UNITS of OUTPUT
UNITS of INPUT
In other words, productivity is the result obtained from a specific amount of a critical resource used to obtain the result. Every system, operation, task, benchmark, or any other activity you’re managing, including your entire business, has inputs and outputs. The amount of output you get per unit of input is the productivity of the input.
Productivity is always expressed as something per something – repairs per labor hour, units per machine per hour, pounds per day, miles per gallon, or any other units of output per units of input.
Input is always some kind of resource, such as staff/labor, space/facilities, equipment, supplies, information, time, and money.
Staff/Labor Productivity is the amount of output you get per worker or per labor hour. For instance, how many diesel engines did your repair technician rebuild in one month?
Supplies Productivity is the amount of output you get per pound, ton, ounce, or other measure of material used in the activity. For example, how many trucks can you lubricate with one drum of lubricant?
Space/Facilities Productivity is the amount of product you get from the entire shop (or other facility) in a period of time. For instance, how many trucks can you service in a month, given the size and configuration of your repair shop?
Sales Productivity is pretty obvious - it’s the number of sales made by your sales staff in a given time. The input of the sales system is the number of sales leads, or prospective customers who called your shop for a repair estimate in a given time period. The output is the number of those prospects that were converted to a sale in that same time period.
Financial Productivity is getting the optimum dollar output for each dollar of input. In other words, it means getting “more bang for your buck”. For instance, how much revenue did you generate from your last internet advertising investment?
Operational Productivity is getting the optimum operational output (or result) for each unit of the resource used to produce that result. For instance, what is the optimal number of turbo chargers one technician can install in a single day. Operational productivity is the true measure of the productivity of your entire diesel repair shop and all its resources.
You could say that all productivity is resource productivity, because all productivity indicators measure the productivity of utilizing a specific resource, or the contribution that resource makes to the productivity of a system.
For instance, the fuel efficiency of a diesel truck (miles per gallon) is the productivity of the engine in its use of fuel. This is a narrowly focused view of the productivity of the entire truck. So, you might also measure the accelerating power of the truck (the time it takes to go from 0 to 60 miles per hour), the mechanical reliability of the truck (number of breakdowns per year), or any number of other measures that focus on specific characteristics of the vehicle.
The list of all possible productivity measures can be so numerous that they would be meaningless to most people. For instance, an independent truck owner/operator might be interested in only a few measures that are important to him/her, such as how many miles per gallon does the truck get, and how many miles can he/she travel on a new set of tires. But a diesel truck fleet manager might be interested in a totally different set of measures that determine the productivity of his/her trucks.
The point being, that there is no one set of productivity measures appropriate in all cases. Even two diesel repair shops of comparable size, and in the same geographic market, may have a different set of productivity measures because they have different strategies, different business models, different management structures, and different informational requirements.
The key to improving productivity is to identify, track, and measure the productivity indicators that have the most impact on your repair shop, and to educate your staff on what those indicators tell them about the role they play in running an efficient diesel repair shop. As you measure your productivity indicators, and establish baselines, you will begin to see where improvement needs to be made, providing you with the knowledge you need to innovate your systems and processes to be more productive.
For more information on optimizing resources to improve the productivity of your diesel repair shop, please read Part II of this blog series - Managing the Productivity of Your Diesel Repair Shop.