Impact
Analysis 2: Impact of Integrated Time Management
Not all time management systems are created
equal.
There certainly are a whole slew of me-too "shop programs" that
claim to do it all. Many will write service well enough, some
keep track of your parts (maybe), a few dabble with rudimentary
time tracking. But none fully manage technician time the way
ServiceShop does.
What is technician time to a repair shop? It's three
things:
1: Approximately 50% of your product mix (service is parts
and labor combined to an end product).
2. Approximately 100% of whatever differentiates you from
your competition (the parts certainly don't).
3. Labor inventory, just sitting there on the shelf, waiting
to be billed out.
It's INVENTORY - and it's every bit as valuable to you as
your parts inventory. How do you feel if that parts inventory
grows legs and walks out the door - unbilled, because somehow
the parts never made it onto the ticket? Pretty upset, right? So
why would you be any less upset over UNBILLED LABOR? Why would
it EVER be OK with you NOT to bill out EVERY one of these hours
of labor sitting in inventory WAITING to be billed out?
If you have 3 technicians working 40 hours per week, you have
120 labor hours in inventory available to sell each week, and
that's assuming you only strive for 100% technician productivity
(some call it efficiency). What's your shop's productivity? Do
you know? Do you have ANY IDEA?
Here's a set of numbers most everyone can agree on:
Average shop productivity in shops without time management:
60%.
Average shop productivity in shops with time management: 110%
Average labor rate: $55/hour.
Number of techs: 1
Hours worked per week per tech: 40
Total labor hours billed at 60% productivity: 40 hrs worked x
60% = 24 hours
Total labor dollars generated at 60% productivity (at $55/hour):
24 hrs x $55/hr = $1320
Total labor hours billed at 110% productivity (at $55/hour):
40 hrs worked x 110% = 44 hours
Total labor dollars generated at 110% productivity (at
$55/hour): 44 hrs x $55/hr = $2420
Incremental labor dollars generated with time management (per
technician per week) = $2420 - $1320 = $1100
This means you stand to recover $1100 in unbilled labor
per technician per week by simply implementing time management
alone (regardless of any other possible impact ServiceShop might
have on profitability.)
These numbers prove that tracking technician time is perhaps
the single most important area of management control and is
probably one of the hottest topics on the shop management
lecture circuit today. The top management trainers in the
country will tell you first and foremost - implementation of
true technician time management will jump start your profits
like no other single business adjustment you can make.
So how can you possibly overlook the process of MANAGING IT?
Certainly it is a huge mistake not to. Some shop owners are
afraid to, because they think the technicians will resist it.
This is generally untrue - most technicians prefer it,
especially if they are compensated in such a way that they are
rewarded for good productivity. And so they should be. If a
technician can have a beneficial impact on the bottom line of
your company and strives to do so, that technician should be be
made to feel the benefits of his actions.
GenesisFour has always understood the importance of tracking
technician time, and has always incorporated full time
management functionality throughout its software in many
different ways - so extensively that it influences nearly every
aspect of how the system thinks. This in turn will influence
every aspect of how you, and perhaps more importantly, how your
service advisors and your technicians think. Every hour of labor
you have in inventory available to sell - should be sold. And
then some.
There is an entire mindset change in the shop once time
management is in place. Everybody thinks differently. Everybody
works differently. And it's all vastly for the better. Even if
you are doing something with manual time punching now, it
cannot, and does not hold a candle to a full-blown
implementation of time management throughout your management
system. It's so important that all other feature differences
pale by comparison.
Car manufacturers dealerships have always understood the
importance of tracking technician time. Why? 2 reasons.
1. Because they think in terms of labor inventory. They know
exactly what they have for labor inventory, and insist that it
all be sold. Shouldn't you do the same?
2. Because the manufacturers hold their dealers accountable
for technician time because they are often being billed for it
by the dealer for warranty reimbursement, and the manufacturers
have a major problem paying for labor that didn't happen.
Shouldn't you? Your customers sure do.
At least some owners of larger shops understand all this
implicitly. Those that do... generally purchase our software
because, quite frankly, no one has a better implementation of
time management software than we do.
Sadly, owners of smaller shops frequently dismiss time
management as being irrelevant to them. They think that it's
only for larger shops. This is perhaps one of the biggest
strategic errors a shop owner can ever make, especially since
once they overlook it (by selecting a shop program that can't do
it properly, and most can't), they have no easy way of getting
it, and at that point, they're stuck.
Big shop, or small shop, it makes no difference. If you do
nothing else that we, or anyone else tells you to do... do time
management. If not from the first day you get ServiceShop, soon
thereafter (it's an optional module that can be added at any
time with a single phone call).
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