BY BRYAN STASCH, VICE PRESIDENT OF PRODUCT AND CONTENT DEVELOPMENT, AUTOMOTIVE TRAINING INSTITUTE
IT’S HARD TO HAVE A CONVERSATION ABOUT TECHNICIAN EFFICIENCY without discussing productivity. And, alternately, it’s hard to have a conversation about productivity without discussing technician efficiency. You can be efficient and not productive, but without efficiency, it’s almost impossible to maximize productivity.
First, let’s define each:
Technician Productivity = The actual time billed in a day or week versus the number of clock hours available in that day or week
- Goal = Bill 1 hour for every hour a technician works
Technician Efficiency = The actual number of hours a technician takes to perform the labor, as opposed to the number of labor hours sold
- The ability of the technician to beat a time standard published in a flat-rate manual
- Benchmark: Completes 2.0 billed hours in 1.5 clock hours = 133% efficient
Second, let’s do the math:
Technician Productivity: What is a technician capable of generating in parts and labor sales if they could bill 1 hour for every hour worked? I have heard all kinds of numbers over the years — $30,000 a month, $35,000 a month, and so on. However, none of those numbers are ever followed with a formula on how they come up with those numbers. And, honestly, I am not sure you care what techs can do in other shops. My guess is you want to know what a tech can generate in your shop.
So, here’s the formula:
- Labor rate divided by “labor as a percent of sales” (example: 50%) = Hourly potential
- Hourly potential times “number of hours available per day” (example: 8) = Daily potential
- Daily potential times “number of days per week” (example: 5) = Weekly potential
- Weekly potential times “number of weeks per year” (example: 50) = Annual potential
Now, what does it look like with numbers, and using an average labor rate of $150 (because it is easy for me)?
Labor rate of $150 per hour divided by “labor 50% of sales”) = Hourly potential of $300 p/hour
- Hourly potential of $300 times 8 hours per day = Daily potential of $2,400 p/day
- Daily potential of $2,400 times 5 days per week = Weekly potential of $12,000 p/week
- Weekly potential of $12,000 p/week times 4.3 weeks per month = Monthly potential of $51,600
- Monthly potential of $51,600 p/month times 12 months per year = $619,200
So, how many of you just grabbed a calculator? This is a far cry from the numbers we’ve heard over the years. It’s all about the labor rate and “labor as a percentage of sales!”
Technician Efficiency: Why is efficiency so important? Because you will never make up for the 40 to 60 minutes of non-paid time for every car that comes through the shop. The inefficiencies in the workflow process — test drive, vehicle inspections, estimate building, and waiting for authorizations — are all important steps, but inefficient nonetheless.
The Math: Is the advisor selling enough hours per ticket, and is the technician efficient enough to make up the downtime to allow the technician to bill 1 hour for every hour worked? Using the benchmark for technician efficiency, 125% to 133% or making up 12 to 15 minutes per hour — and 45 minutes of non-paid time — the advisor would need to sell, on average, 3 hours per ticket.
Tips to Optimize Technician Efficiency
Invest in your team: Training and development plans for technicians and service advisors will help them stay up-to-date with the latest technology, tools, and techniques to improve their technical and sales skills.
Provide the right workspace: A clean and organized workspace can reduce the time it takes to find tools and equipment. Maximize the workspace by arranging bays to fit the technician, all supplies, common hand tools, lighting, and electric at each lift.
Use technology: Technology can help technicians diagnose problems quicker and locate and verify accurate repair information. Digital inspection programs have been a game-changer to increase hours per ticket, job assignments, job progress, communication, and estimating.
Optimize workflow: Streamlining the repair process can help reduce wasted time and improve efficiency. This includes optimizing the work order process, improving parts management, and reducing unnecessary steps in the process. The test drive and the inspection are tech time, but building estimates and authorizations are service advisor time. And, most bottlenecks are at the front counter.
Prioritize preventive maintenance: The right blend of repairs and maintenance will allow technicians to beat the book time on many jobs and increase hours per ticket.
Measure what you’re selling: Yes, that means time clocks. Until you can identify where the bottlenecks are, it will be tough to fix them. Motivation: Be sure you have a great compensation plan for your team that drives productivity.
Bryan Stasch began in the auto industry in 1984 as a technician before becoming general manager at a national franchise store, and eventually sharing ownership of three successful auto repair shops. In 2000, he joined ATI as chief instructor and became deeply involved in developing and presenting all aspects of ATI’s coaching and training programs. In 2006, he became head of ATI’s member fulfillment department, overseeing all ATI coaches and related administrative staff. In 2019, he took on the role of VP of product and content development, an area of expertise in which he excels.