What information should we use to evaluate workshop performance?

Measuring workshop performance and productivity is a task that in many cases seems to be done superficially, and not based on accurate data.

But if we take into account certain factors we can anticipate future problems and increase the department’s profitability

In order to achieve this, we need to start registering the following information:

• Hours Invoiced: Hours in the repair order, paid by the customer, by the OEM in case of warranties, or by the dealer in case of internal charges.
   
• Hours Purchased: Hours the technician is actually at the dealership, by virtue of the salary they are paid. This includes time working on a vehicle, but also training, lunch, leaves, etc.
   
• Hours Available: Hours the technician will be available to work on a vehicle. These are a part of Purchased Hours.
   
• Hours Worked: The hours the technician actually works on the vehicle.
   
• Delays: Time the technician stops working on a vehicle due to lack of parts, lack of tools, etc.

It´s important to record delays in order to detect:

• Training needs
• Equipment needs
• Needs for improvement in parts management

If we analyze the frequency of delays and their reasons, we can detect the causes. For example, if the reason is a lack of parts, you can see how to improve parts purchasing.

What is the use of this information?

Once we gather this information, we can calculate the following indicators, analyze the results and see which measures we can take to optimize workshop operations.

How many available hours are actually being worked in the repair order?

Hrs. Worked / Hrs. Available = X%

• Goal: Close to 100%

How many available hours are being invoiced to customers? This question is similar to the previous one, but a financial point of view.

Hrs. Invoiced / Hrs. Available = X%

• Goal: Close to 100%

Efficiency

The capacity of each workshop technician to produce revenue in terms of hours invoiced compared to hours worked. This indicator answers the following question: How efficient is each employee?

Hrs. Invoiced / Hrs. Worked = X

• Goal: Greater than 1

It’s essential that the value be greater than 1; otherwise it implies that you are not invoicing the total of hours worked.

Even in the case of warranties or internal charges that are not invoiced to the customer, you must record and “invoice” them in order to take into account the expense and estimate these hours in your accounting.

How can we gather this information?

First, an important point is to have a dealer management system capable of storing all this information and managing the required indicators.

It should also be simple for technicians to enter data. This is why many workshops are beginning to use touch screens so that technicians can easily indicate what they are doing:

• Repairing a vehicle
• Cleaning their workspace
• Helping other areas
• Moving a vehicle
• ... And any other task that the Service Manager (or the Aftersales Manager) wants to measure.

With suitable dealer management software and a touch screen, the Service Department can optimize the workshop´s performance and efficiency.