Automotive Service Management Newsletter
Vol 1, No 7, July 2007
Quit Losing Money Over Quality Issues
Part 1: Introduction
Quality is formally defined as Zero Defects as based on the teachings of Joseph Juran, considered by many the godfather of the quality movement starting back in the 1950's. As simply as it is stated it is the biggest challenge of any consumer product industry. Mr. Juran taught that if a consumer bought a product that did not work properly right of the box or had problems early in ownership, that that consumer would probably not buy another product made by that company and would tell others to not buy it.
This basic teaching has never changed and will always be the foundation of a successful retail or service business. However, over the years I learned that quality is not limited to the new product itself, but includes the repair of the product during warranty and customer handling processes for sales and service.
For the service department, this translates into Zero Repeat Repairs and Zero Customer Handling Problems. For point of discussion, the definition I use for a Repeat Repair is any type of repair that takes more than one visit to complete, which can include a customer not feeling the repair was done to their satisfaction, and there is no time limit with this issue. I don't believe I have to define Customer Handling, yet it includes accurate repair prices, keeping time promises and any other agreements, and good communications during the repair process. If either of these or both fail, then the service department is in a lot of trouble.
With this introduction in mind, something that has puzzled me since I started in this business in 1986 is why many automotive service departments treat quality as a hit or miss proposition. Quality is truly not hard to manage but the excuses for letting it go range from not enough staffing or it takes too much time to issues like I can't get my techs to take the time to check their work or the service advisors don't have time to keep their customers updated.
Another source of contention concerns the quality of new vehicles and poor support from manufacturers for repairing the vehicles. Overall, the automotive industry has done a remarkable job in improving quality as shown by the percentage of warranty repairs in dealerships. As little as ten years ago, the average dealership's warranty repair business was about 40-50% of their daily repair business. Since the early 2000's, the percentage of warranty repair business has dropped to 12-17% of total business and is moving even lower each year. Most manufacturers feel they can attain a 10-12% warranty repair level within a few years.
So to me the issue is to control what you can control, your repair and service quality with an even mix of customer handling.
Using the gauge for quality in the service department as Zero Repeat Repairs and Zero Defects in the Customer Handling Processes, we are going to look how to make quality a way of doing good business by looking at these issues over the next five newsletters:
- Whose Job is Quality?
- The Cost of Repeat Repairs and Poor Customer Handling
- Tracking and Analyzing Repeat Repairs
- Tracking and Analyzing Poor Customer Handling Situations
- Quality Improvement Meetings
© Copyright, 2007, J. Daniel Emmanuel