When we polled over 500 repair shops nationwide, we found the number one concern as we begin 2018 was repair shop profitability. As the cost of doing business increases and customers are searching for the best price, maintaining profitability becomes more and more difficult. Ultimately, the secret to increasing profitability in 2018 lies in the efficiency of your repair shop. To shed some light on the subject, we’ve compiled five easy ways to increase efficiency in your diesel repair shop so you can count on a profitable 2018.
1. Communicate with your Customer
The first and foremost priority of any repair shop is the customer. While it’s easy to focus on capacity, profitability, and planning for the future, true repair shop efficiency starts the moment a customer walks in the door. Instead of focusing on the repair or discussing part options, determine your customer’s expectations first. Finding whether the customer has other rigs for backup, or is planning on replacing the truck soon can be leveraged as you fit the repair in your shop’s schedule. Be sure to ask your customer about part preferences, and take it as an opportunity to educate the customer on aftermarket parts that can save him money while boosting your profitability. Lastly, don’t forget to ask the customer’s budget and how they are going to pay; the last thing you need is to squeeze a truck into your bay then have it sitting outside for weeks while you wait for payment.Be sure to document all of your findings on your repair intake form, as well as details about the repair. Once you’ve gone over everything with your customer and confirmed the information they’ve provided, have them sign off on the form so you don’t have to worry about future recourse if the customer changes his mind.
While it’s easy to focus on capacity, profitability, and planning for the future, true repair shop efficiency starts the moment a customer walks in the door. Instead of focusing on the repair or discussing part options, determine your customer’s expectations first.
2. Schedule for Success
The second key in increasing repair shop efficiency is to schedule your shop for success. This doesn’t mean having all hands on deck all the time either, rather it means knowing your capacity at any given moment. Capacity can be defined as the sum of the maximum billable hours for all techs, and determining the capacity of your repair shop is known as taking inventory of labor. While it may sound complicated, inventory of labor is simple: take the maximum billable hours each of your technicians are capable of producing any given day, and add them together. For example, say you have an apprentice technician capable of six hours, two higher-level techs each at nine hours, and three master technicians at 14 hours each. All of those added together (6 + 9 + 9 + 14 + 14 + 14) equals 66 total billable hours your shop can use- at a maximum- in a given day. Now you know you have 66 billable hours you can devote to repairs without stretching your staff too thin.Taking inventory of labor is the first step in scheduling for success. The second step is actually scheduling repairs to maximize the total billable hours. For example, push for customer appointments for efficient diagnostics, and be sure the repair is suited for the technician so you can maximize profitability on labor. The last thing you’d want is your master mechanic working on something an apprentice could do, or having a less-experienced tech struggle at a repair suited for a master technician.
Capacity can be defined as the sum of the maximum billable hours for all techs, and determining the capacity of your repair shop is known as taking inventory of labor.
3. Inspections as a Baseline
Efficiency loses its luster quickly if the rig is back in the shop a week later for rework. Incorporate inspections into each and every repair, so that potential problems are taken care of before the rig is returned to the customer. One way to help with inspections is to have technicians document anything related the repair that was not already outlined on the repair intake form, and be sure to keep communication lines open with the customer. If additional repairs are found, notify and quote the customer as soon as possible so the truck isn’t sitting in a bay any longer than it should. And, when it comes to inspections, have technicians with more experience inspect the work of techs with less experience. This will ensure every repair has a second set of eyes on it without adding work to your ever-growing to-do list.
Workflow, Workflow, Workflow
Workflows are a great way to increase the efficiency of a process, and the repair process is no exception. We’ve compiled a sample five-step workflow for your repair shop below:
- Step 1: Service Writing. Using a repair intake form, take detailed notes at the time of drop off. Enter the notes in the repair shops management system, or file it with new jobs.
- Step 2: Transfer to Service Advisor. Print the work order, or retrieve the repair intake form and file it for the Service Advisor with the keys to the vehicle. The Service Advisor will check the file often to know when jobs are waiting.
- Step 3: Schedule the Job. The service advisor double-checks the work, and then assigns it to a technician based on the shop’s inventory of labor and the technician’s skill level and experience.
- Step 4: Dispatch to Technican. Purchase a dry erase board with a file rack for each bay in your repair shop. This dry erase board will serve as a job board, and should be broken into three sections: the top for vehicles to be inspected, the middle for approved work for the day, and the bottom for work approved for the following day. Be sure to leave room for any notes to be filled in, and color-code jobs based on priority (red being critical, then yellow, then green).
- Step 5: Job returned to the Service Advisor.When the technician completes the work, he brings the file back to the service advisor’s office rack. If it was an inspection, the advisor then calls the customer to sell the work and will return the folder back to the technician’s rack. If service is complete, the advisor will then bring the folder to a senior tech for final inspection. Once that’s complete, final delivery is scheduled with the customer.
5. Set Goals
The final step in increasing repair shop productivity is to set goals for your technicians. We’ve all heard Peter Drucker’s saying, “if you can’t measure it, you can’t change it”, and the same holds true when managing your staff. Start with being transparent with your staff, educate them in their cost to the business and be clear in the expectation that they generate a billable hour for every hour they are on the floor. Set productivity goals for your staff, be sure everyone is aware of them, and be ruthless in removing any obstacles that stand in their way. Whether you decide to enact bonus or commission plans for staff who are achieving their goals, or prefer to hold contests or other incentives, it doesn’t matter. What matters is that the techs see this approach as a win for them as they start to drive productivity and efficiency.
"If you can't measure it, you can't change it."
Whether you decide to implement one of these techniques, or you commit to implementing all five tips, any increase in efficiency is a step towards boosting the profitability of your repair shop. If you haven’t already joined the HHP Repair Shop Value Program, be sure to enroll in the free program and subscribe to the HPP Newsletter here for exclusive content designed to Grow Your Business.