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Automotive Service Management Newsletter
Vol 1, No 2, February 2007

Time is Money
Part 2: So What If My Time Tracking Isn't Very Accurate!

In Part 1, I set the foundation for the importance of time tracking for technicians because they are the only real source of income in a service department by the Labor Hours they generate per repair. I reviewed the four types of time that must be tracked - Available Time, Actual Time, "W" Time (nonproductive, non-repair times) and Labor Hours.

I used an example of tech efficiency to show that without proper time tracking a technician can look like he is taking too long on a repair because he is not accurately clocking on and off the repair while going to get parts. The tech's trip to the parts counter added 15 minutes to the repair. These 15 minutes should have been documented as "W" Time. The same could happen if the tech was checking tech resources, contacting the tech hot-line and other types of non-repair situations that may arise during the repair. Without tracking "W" Time, the tech could be blamed for doing a repair too slow. So the purpose of tracking "W" Time is to learn how to minimize these situations when possible.

I want to give you some other examples of what you can learn by properly tracking technician time.

Let's create a month of results for 8 techs:

Tech #
Available Time
Actual Time
Labor Hours
"W" Time
1
189.2
160.3
210
28.9
2
193.5
170.4
183.7
23.1
3
176.3
155.8
160.6
20.5
4
189.2
171
181.5
18.2
5
172
153.5
144
18.5
6
193.5
162.5
160.6
31
7
193.5
166.8
181
26.7
8
176.3
143.4
140.4
32.9
Totals
1,483.5
1,283.7
1,361.8
199.8


The formula for establishing "W" Time is:
Available Time -(minus) Actual Time = "W" Time
At first glance we can see that this shop had a good month, yet if the manager had set up a system to know the potential for the shop, the truth of these numbers might surprise you. To establish what the potential for a shop can be we have to consider these factors:
  • Number of bays available to do work and income potential per bay
  • The number of techs in relation to number of bays
  • Technician Actual Time in relation to Available Time
To keep it simple, this shop has 8 bays with 8 techs. To see if this shop is hitting its potential, I would start with establishing how productive the shop is overall using the Productivity formula:
Actual Time /(divided by) Available time = Productivity Percentage

1,283.7 /(divided by) 1,483.5 = 87 %

(The National Auto Dealers Association recommends that Technician Productivity should be in a range of 85-90 %.)
So we see that the shop's Productivity is within the recommended range. This also means that 13 % of the shop's time was "W" Time, which is not too bad there either.

Next let's see how efficient our techs were as a group:
Labor Hours /(divided by) Actual time = Efficiency Percentage

1,361.8 /(divided by) 1,283.7 = 106 %

(The National Auto Dealers Association recommends that Technician Efficiency should be in a range of 115-125 %.)
Looks like we are losing a little money here, but how much money are we really losing? To find that out we must decide how many Labor Hours our group of techs could have generated this month.

To do this we should invert the efficiency formula. We will use the low end of the recommended efficiency range as our factor, 115 %. The formula would look like this:
Actual Time x(times) Efficiency Percentage = Labor Hours Potential

1,283.7 x(times) 1.15 (115%) = 1,476.26
This shop has just given up 114.46 Labor Hours this month. If this trend continues for a year, then the shop will lose 1,373.52 Labor Hours, a whole month of potential income. If we used the higher end of the Efficiency Rating of 125 %, then the shop would be losing 242.83 Labor Hours a month resulting in 2,913.96 Labor Hours for the year, over double the 115 % rating.

So where can this shop improve? To get some ideas we need to see what was happening with each tech.

Tech #
Productivity %
Efficiency %
"W" Time %
1
85
131
15
2
88
108
12
3
88
103
12
4
90
106
10
5
89
94
11
6
84
99
16
7
86
109
14
8
81
98
19
Totals
87
106
13


Let's first look at Productivity to see how much of each tech's time is being used for repairs. Techs 6 and 9 seem to be having the lowest Productivity percentages so I would like to see what is happening there. This is where documenting "W" Times is critical. The fact that they have high "W" Times is not bad, what we want to see is if there is anything that can be done to trim some of that time.

Even more critical are the three low efficiency ratings for techs 5, 6 and 8. Were they being dispatched work that is in their area of expertise? Is there a learning curve going on here? Are they just not trying to work fast and accurate? Does the shop have not much work, so are they are taking their time on the jobs they have?

What is very important about using these formulas is that if a tech is being told their Productivity is down or their "W" Time is too high, the logical step for that tech is to spend more time on the job, slow to clock off. This will lower the "W" Time and raise Productivity, but the tech's efficiency will drop heavily.

For instance, after a review with the manager about his low productivity and high "W" Time, tech 8 decides to stay on a few jobs longer to lower "W" Time and raise Productivity. His numbers for the next month are 180.1 hours of Available Time, 155 hours of Actual Time, 147 Labor Hours and 15.1 hours of "W" Time. Looks good on paper until we analyze the numbers:
Productivity formula: 180.1 /(divided by) 155 = 86 %
  Better with only 15.1 hours of "W" Time

Efficiency formula: 147/(divided by) 155 = 95 % - Lower than last month
The beauty of knowing how to use these formulas is to realize if a tech skews the number to affect one rating, it changes the other. If he had tried to improve his efficiency by clocking off jobs faster, then the Productivity and "W" Time would have risen.

My point is that with a little time and effort, mixed with accurate time tracking, a good manager has the data needed to analyze the operation to discover how to set up and control conditions to allow techs to work better and faster. Some of the problems may be laziness by the tech, poor dispatching, just not much work in the shop or too much work in the shop causing techs to hurry their work creating errors and comebacks. Regardless, the more specific a problem is defined, the easier to find a solution.
Here are some other examples of problems that can be created if these four types of time are not properly tracked:
  • You can't establish the average amount of technician hours available daily for appointment scheduling
  • Tech productivity and efficiency will not be accurate
  • Shop Utilization can not be accurately established
  • You would not be able to establish and track Actual versus Potential Labor Hours for yearly forecasting
Time tracking requires cooperation from technicians and the dispatcher, if the shop does not use computerized dispatching. One of the most powerful ways to get people to cooperate is by getting them to "want" to cooperate. There are several things I can recommend there:

  • Have weekly shop meetings to discuss what needs to change and find ways to help techs work faster and better. The more usable ideas the techs bring to the table, the better the buy-in by the techs.
  • Post and update their numbers daily or every few days, where each tech can see each other's numbers. This will create a competitive atmosphere which will also cause them to want to track their numbers better to make sure they are seeing their best scores.
  • Reward improvement and consistency for each tech as individuals
  • Post a report recognizing those who met their goals
Next month, we will look at the Service Advisor's role in helping create a productive and profitable shop during write-up by doing walk around vehicle inspections and helping the customer take better care of their vehicle using the manufacturer's maintenance schedule.

Copyright, 2006, J. Daniel Emmanuel


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