PART II: Managing the Productivity of Your Diesel Repair Shop.
Principles apply to productivity management like they do anything else you manage in your diesel repair shop. They apply to all levels of your business from the lowest level employees, to middle management, all the way up to the owner.
The 5 Principles of Productivity Management:
1. Acquire the most productive resources. Resources include staff/labor, space/facilities, equipment, supplies, information, time, and money.
Technology investments can increase the productivity of many business functions. And with the advancements in mobile and cloud technologies, it seems to be the preferred method nowadays. But implementing new technology isn’t the only way to increase productivity.
The recruiting and promoting of employees with the best qualifications and right personalities for their positions; the utilization of office space, production space, and other facilities that are the optimal size and configuration for the tasks being performed within them; the machinery and tools that are right for the tasks they are being used for; and numerous other resources can have a dramatic impact on the productivity of your repair shop.
2. Make the “highest and best” use of your resources through systems. As well as being the most cost-effective way to run a business, systems are also a primary means to increase productivity. When innovating your repair shop systems, be sure to include productivity measures to evaluate new systems and to track existing ones. Make sure your systems are being operated by employees with the proper qualifications, skills, and training.
Not everyone is fortunate enough to have unlimited resources in their business. If your resources are limited, then you must assign them to areas of the business where they’ll do the most good, in other words, assign them to systems where they’ll be the most productive.
3. Optimize (rather than maximize) the productivity of your resources and systems. Common sense tells you that you should maximize a good thing, and most people would agree that productivity is a good thing? So why don’t you maximize productivity? Because there are situations when productivity gains can hamper quality and customer satisfaction. Because quality and customer satisfaction are also very important goals for your diesel repair shop, productivity must be kept in balance with them.
Another word for balance is “optimize.” You need to optimize productivity.
For instance, if your repair shop service advisor merely hands an estimate to a customer and moves on to servicing the next person in line, without explaining the estimate to the customer, they will feel uncertain about the necessity and scope of the repairs, and lose confidence in the professionalism of your repair shop. This will cause the customer to take their future business elsewhere. The service advisor will have high productivity, in terms of servicing many customers in a day, but your repair shop will go out of business, due to the lack of return customers. In this case, high productivity comes at the cost of not retaining customers. The solution to this is to find the balance point between productivity and customer retention.
4. Quantify and monitor key productivity indicators for every system, business unit, and important resource. Productivity is one of the best indicators of performance, and is almost always quantifiable. It’s a key indicator to add to your system, business, and strategic indicators.
You most likely already have key performance indicators for your repair shop. It’s a good idea, however, for you and your managers to review their quantification and add productivity measures, if they are not already covered.
And, of course, quantification isn’t a one-time thing. You need to track and evaluate productivity over time, just as you would any other quantification, so you can monitor the pulse of your repair shop. Downward trends of productivity indicators are early warning signs that you are having problems, and helpful in discovering the cause of those problems. Before and after measures of productivity indicate if a system innovation is helping or hindering the system. The key strategic indicators of productivity help you measure your progress toward your strategic objectives.
5. Use strategic systemization as the tool for managing productivity at all levels of your repair shop. If you are using systems to run your repair shop, then you already have productivity improvement processes in place, because most of your management systems have productivity improvement as an objective. Productivity doesn’t mean adding systems. It means making your existing systems as productive as they can be – getting the best possible results (outputs) for the resources (inputs) you use to get those results.
Now, all you need to do is to design and manage your systems with productivity in mind. To do that, you’ll need to add productivity measures to the key indicators for each system, and each employee and management positions, and monitor them through your existing management information, financial control, quantification, and employee evaluation systems.
Your existing systems will operate much as they do now, but with additional focus and emphasis on productivity. This will automatically establish higher priorities for the improvement of low-productivity systems, and result in allocation of more resources to productivity improvement. The result will be a rapid improvement in productivity at all levels, not to mention an upward trend in the market value of your repair shop. The more productive your resources, systems, organizational units, and your entire business are, the more value you build into your products and services, and the more value you build into the repair shop itself.
For more information on optimizing resources to improve the productivity of your diesel repair shop, please read Part III of this blog series - Performing a Productivity Review.