This post was originally published on Auto Success
As the service director of your dealership, you focus on selling time. Time is the asset, hours. It’s important how you do this. You want to maximize every reasonable billable hour in the workday. It’s time to look for more billing revenue within the service workflow itself.
Capturing more billable hours from the work you already have is called cycle time management. A cousin of manufacturing lean production, it helps you identify and remove bottlenecks and unapplied time losses from your key-to-key service process.
Our analysis shows that, on average, dealership service departments lose 45 minutes of billable time per maintenance service. This is often due to inefficiencies like waiting for parts, locating vehicles, technician availability or communication between step handoffs, such as service completion to customer delivery.
By reducing cycle times, dealerships can recover this lost time, translating it into more billable hours and increased revenue. For example, saving 45 minutes on each service across 10 jobs per day can add 7.5 extra billable hours daily, significantly boosting profitability.
Here’s a sad example we still see too often today: Technicians leaving their bays to go retrieve their next job, which is rarely parked where they’re told it is.
Simple GPS and Bluetooth-like hang tag trackers attached to every vehicle moving through your shop and parking areas stop this nonsense. This shocking disregard for shop profitability leaves billable time on the shop floor. No dealer principal should tolerate it another day.
Lean into More Billable Hours
“The benchmark for hours per RO is typically between three and four, yet many dealerships are stuck between one and two hours. Don’t allow your department to be one of those at the bottom. Get to work immediately to increase your billable hours and overall productivity,” advises Ted Ings of the Center for Performance Improvement.
Tully Williams, parts and service director for The Niello Company is adamant: “You get to your percentage by selling your capacity and great recommendations. Set a goal of nine hours per technician at first — 100% of the team should be hitting that after a year.”
Dawn Newsome, vice president of fixed operations for the 12-store Vaden Auto Group of Savannah, establishes attainable goals for technicians based on skill level and whether they use multiple bays.
Set expectations of achieving 125% to 140% of the goal. This approach empowers you to manage your time effectively and see momentous results.
Don’t push too hard to make hours, though. That can frustrate the system, employees and customers. The best practice is limiting advisors to writing 18 to 20 ROs daily. The goal is quality customer time and more thorough walkarounds — pushing ROs detracts from this important rapport-building part of the service experience. The steady cadence of a better-balanced RO flow reduces disruption and rush, favoring long-term productivity and technician job satisfaction.
Cycle time management is a remarkable tool for service managers who want to lean out or squeeze more billable hours from their day-to-day service workflow. The chart below shows a typical service workflow and the work steps along its flow where time can be lost — and, when known about, recovered. This recovery translates into increased bay usage, faster step baton transfers and improved CSI when service promises are met.
Dealers using cycle time management are experiencing profound improvements:
• 43% increase in bay turn
• $10,000 a week in more billable labor
• 75% reduction in lost or misplaced keys
• 40% reduction in wait times
• 35% increase in positive customer reviews
Let’s Get Started
Look at your data to determine your:
• Average advisor write-up and walkaround times
• Average staging time or bay wait
• Average bay time/billable hour
• Average diagnostic/safety test drive
• Customer delivery
• End service – did the customer drive away?
What you do and want to do happens when defined and measured. When it’s measured, it’s provable and believable. When you can forecast the desired outcomes you expect from everyone who touches the car through its workflow, they add value and eliminate waste. Cycle time management techniques provide this diagnostic help.
