September 10, 2001 20:47:23
Being Proactive in the Service Department
DTC Retail Consulting
When you are in retail business of any type, can you ever hope to be in control of your day? Yes? No? Well, Maybe. Somewhat. Sounds like a political answer I know, but it is absolutely necessary to try to gain control of your Service day. I hope to share some advice and tools that will assist you in doing so.
In our Service Department we have an inventory. It is the most precious inventory in the dealership. Much more so than parts, new cars or yes even used cars. It is called TIME, production time that is available to be sold with an appropriate rate attached and associated parts. It is obvious that this time is the most precious because it is also the most perishable. At the end of the day the unsold inventory (time) is lost forever, not to be carried over to the next day. So does it make sense to have some form of inventory management in place to maximize the efficiency of this inventory? Unfortunately, in many Service Operations the extent of inventory management consist of turning on the lights, raising the overhead doors and “just bringing it in”.
So then, what are the areas of the Service Process that we can at least make some positive impact on inventory management?
- Customer scheduling
- Shop loading
- Menu/maintenance sales penetration
- History review
- Job duration estimating
- Proactive delivery
There are certainly other areas of the typical Service transaction that can have an impact on efficient inventory management but the items listed above cover the major ones. In this submission I will focus on only two of the areas, customer scheduling and shop loading.
At first glance you may wonder what is the difference between Customer Scheduling and Shop Loading. Quite a bit. Very simply, Customer Scheduling is the practice of scheduling the arrival times of your Service Customers while Shop Loading is determining the amount of work coming into the shop on any given day and knowing when the day is considered to be full. Many of our customer situations that sometimes lead to unhappy customers begin with the promises the Service Advisors make or imply. Their intentions are good. The Service Advisors are trying to accommodate the customer's request regardless of the current situation in the shop but this is where the trouble begins. It's called “over promising and under delivering”.
A positive first impression by our customer is very important in contributing to CSI and retention. Having the majority of the Service Customers arrive at the same time will not contribute to this positive impression. Many of us have made statements to our customers like, “Bring it on down first thing” or “What time would you like to bring it in?”. With either of these statements we lose control of ensuring a positive first impression. Either the customer will show up “first thing”, of course what does first thing mean or, they will pick a time or day that is convenient for them which may be the worst possible day for you and your shop. The only way to ensure a quality transaction with each customer with each visit is to have adequate staff, (in my opinion one Service Advisor can efficiently handle only 15 - 17 customers per day, depending on shop structure of course) and to plan the customer's arrival so that quality time can be spent and a relationship formed. In a future submission I will go into detail on what should take place after the appointment is made but before the customer's scheduled arrival date.
Begin training your customers on how your appointment process works. This training begins with the delivery process of the vehicle and continues with every contact they have with the Service Department from then on. Attempt to lead your customer into an either/or choice situation by asking, “I have Tuesday or Thursday available which of those two days would be the most convenient for you?”. Once the day has been determined next ask, “There is a 8:15 or 9:45 time available for us to meet and discuss your vehicle needs, which of those two times work best for you?”. Chances are the customer will select one of your options, but should those dates/times not be convenient always try to accommodate their needs if possible. You may however, have to explain to the customer up front any potential delays due to shop load or a full schedule.
Shop Loading is the science and art of knowing exactly how much work to bring into the shop on any given day. The goal is to make sure that you have enough work, but to also allow time for emergencies, up-sell opportunities, etc. There is a very fine line between not enough work and too much work….one vehicle makes the difference. Many shops schedule their shop load by the number of vehicles coming in. What does that mean? Should you schedule by number of vehicles you could end up with twenty lube, oil and filters for that day or twenty heavy engine jobs, quite a bit of difference in the amount of inventory necessary to produce these two examples. Absolutely do not schedule your shop load by the number of vehicles. Again you are attempting to stay in control of your day remember.
Step 1 Plan your shop load by first determining the amount of inventory available for any given day, allowing for planned absences, training, etc. The following formula will assist you.
# Technicians X Clock Hours Available X .93 Attendance Factor X
% Proficiency = Production Inventory Available
(The result of this formula assumes that all Technicians available have equal skill levels and are able to perform all operations. A further breakdown may be necessary to allow time available for specialized work or a particular skill.)
Step 2 Determine how much of this inventory to set aside for appointments, usually 50% to 70% of time available. This will probably be an ever-changing amount due to current conditions in the shop, such as carryovers.
5 Technicians X 8.0 Clock Hours Available X .93 Attendance Factor X
100% Proficiency = 37.2 Production Inventory Available
37.2 Production Inventory Available X .70 Appointments = 26.0 Production
Inventory Available for scheduled work.
11.2 Production Inventory Available for carryovers, emergencies, up-sells, etc.
Step 3 Begin estimating the duration of jobs as you schedule appointments. Certainly this for the most part is a “best guess” but being able to plan part of our day is better than not planning at all. Keep a running total of these durations for each day scheduled so that when you reach your shop loading target you know to offer the customer other options of days available. Use an Appointment Data Form to record the customer's information and vehicle concerns while on the phone. Use this form to input the data into your system later when time permits. Keep an appointment log sheet to record the arrival day and times of customers coming in so you do not to over schedule with too many customers on any particular day or time.
Step 4 Do not encourage customers to wait. A large volume of customers waiting at the dealership can reduce the effectiveness of your Appointment process. Customers can quickly learn that the best way to get their vehicle worked on is to just show up and wait. Again we are attempting to gain control of our day. I am not suggesting that you should attempt to eliminate or refuse to let customers wait. Not at all. In fact some customers have no other option but to wait likewise some types of work, especially the quick service type you may only get if you allow customers to wait. Make allowances for the volume of waiting customers you typically have and factor this into the amount of shop loading time you make available.
Keep in mind that Customer Scheduling and Shop Loading is not an exact science. Not all customers are going to show up exactly at their scheduled arrival time. You will occasionally over book or under book your shop. The art of Customer Scheduling and Shop Loading is an on-going practice that will improve with experience.
Gain control of your day.
Don Tipton, DTC Retail Consulting