How To Increase Productivity As An Automotive Technician

Foreign.

Service Drive revolution. Friday drive by. I don't know how to say Friday drive by in Spanish.

I don't either.

What's Friday? I should have looked that up, but welcome. This is where we answer your questions. The number should you have a question and need our advice or help is 8333-ASK SDR. That's 833-ASK SDR. I'm Chris Collins and this is Chris Joan.

Hello everyone.

Let's get right to the call.

If you had a preference about how many bays a mechanic should have. So a little bit of background on that is I'm a mechanic, I'm a technician and I've been doing this for 10 years or so now. And I'm, I, I'm a high, I produce a good bit hours and so I usually enjoy two base. Well, it seems like anywhere around the town I'm in when you're looking for a shop, they like to stuff as many text as it is.

And the shop that I was at last, they kept putting a tech in the bay next to me when honestly they were just hurting themselves with production because he wasn't billing as much as I could have out of those two bays. So I didn't know if you've had experience, whereas like, and I get it that everybody's not a two bay tech, so I didn't know if you've had experience with how to navigate that or your thoughts on that. Thank you.

Great question, Frank. I think so. There's a couple things I would say. There is. The first thing is it depends on the type of technician. So if you're a heavy duty technician, your efficiency is important in that equation. But you know, if you're working on heavy duty trucks or pulling engines or transmissions, you usually need two bays just because they're down and they're apart and you can't pull one in and diagnose it while you have one apart. And a lot of times you need to diagnose or do something while you're doing a big job. And so the type of technician is one part of it. But the math is really the friend here. And the way that you look at running a service department is the service department is only.

As effective as the amount of stalls it has. And so if you have 10 stalls, you could only hypothetically ever do as much labor as you could bill in 10 stalls, 24 hours a day, seven days a week. And then we say, oh, we don't want to be open 24 hours a day, we don't want to be open on Sunday. Oh, we're half down sat, whatever it is. So now we are open a certain amount of time. So then that's our available time to sell. And if you put a technician in two stalls to make that math work, you hypothetically have to run over 200% because your average technician that's good is going to be around 100%. So if I can have individual techs and stalls running at 100%, I'm going to do better than having one technician with two stalls running at 150% or 170%. Right. So and even better, if I have a technician, technicians with one stall and they're running at 150, I'm still. I would then have to have a technician running at 300%.

Yep.

So it usually comes down to the math and the available time. Now you can play with that. With 410 work weeks. There's a bunch of other stuff you can do to fix that in the sense that I can, on a 410 work schedule, I can take six bays, make them into nine techs, and if I had extra stalls and some of the techs could have two stalls working in a 410 and it wouldn't really affect the shop, would actually increase our productivity, but it's increasing it because we're extending our hours two hours a day.

Right.

So I know that's a long winded answer to that, but it just comes down to math. When I'm talking about this with a service manager, I will take the total overhead for the department and divide it by the stalls and I'll say, so this is our break even point of what we have to produce in gross per stall. And then you can usually see pretty quickly that a technician having two stalls can't quite hit that number like an individual in an individual stall running at 120, 130%, because the overhead per stall is usually pretty high. And you have to remember that unless you're looking at the financials. Frank, most service departments in this country are not making money. I mean, I know it's a crazy thing, but most of them, if you, you know, average out the average service department in the US and Canada, most of them are barely breaking even.

And so you got to keep that in mind too. You coming in and having your, you know, your thought process and your agenda to hey, give me two stalls, I'll get to work, is, is one side of the story, but the other side of the story is most service departments aren't profitable or as profitable as it should be.

Yeah. It's so funny. I just. I realized kind of an error that I did. So I had a. I had an 80 hour rule with the tech. So if I had a technician, they could produce 80 hours a week, they could have two stalls. But the flaw in that is assuming that the average tech does 100, when they could be 120%, 130% efficient, I actually lose out just by having that tech have two stalls.

And the brand plays into that. Right. Because if I got Toyota, techs can run at 150% all day long, Right?

Yeah.

And so then we're talking about 300%. But you take like a BMW tech, maybe BMW techs are more 100%.

Yeah.

So it does depend on the brand.

Yeah. But I will say to Frank's defense is that I think a lot of times when we talk about the stuff in the stall, utilization, everything like that, we're not taking the text into consideration, like. And I think what I would maybe suggest to Frank is just try it for a little bit is because my experience is when a technician has two stalls, they're more apt to let one sit. Right. And I call that the hoist hanger. So it's the one that's waiting on a part. And let's say that the part doesn't come in for two days and the same truck or car sits on a stall for three days. And they didn't really do anything. They just ended up working on a one stall anyway. So what I would say is I would take two weeks. Right. Even if, let's say you have two stalls, just try and see what happens with one and how many hours you produce out of the one stall. Because my observation is that more often than not when a tech has two stalls, they create themselves an extra inefficiency. And you'd be amazed at how much you can produce out of one stall, because it forces you to make sure that everything matters, that you do.

I can't think of a time where I didn't go in and explain the math to a group of technicians. And even those guys, you know, those techs that'll have two stalls, and this is kind of what you're describing. They'll have two stalls. They'll have cars under the cars that are up.

Yeah.

It really is a function of time management more than it is that they need two stalls. And so sometimes those cars just need to get done or you got to push them out or whatever it is. Because if you have the two stalls, sometimes you'll just let stuff sit in two stalls. It doesn't really make you more efficient. But I've yet to explain it and not have them understand and also not have the efficiency go up in the guys that want two stalls because they understand that it's a privilege, not an entitlement in that way. So I think communication and most of the time, I think where our industry fails is we're not explaining this stuff to text. We're not explaining how profitability works. I mean, just think about when we go through the financials with advisors. What's the first thing that happens?

They stop discounting.

Yeah. And. And it's only by educating. Right, right. And I don't know when we decided that everybody in our industry is dumb and can't. I mean, I don't know, it reminds me in a way of the Fauci thing with the masks.

Yeah.

Where he's like, well, I lied to everybody because everybody kind of assuming they were dumb.

The truth.

Yeah. And it's like, I don't know. I think that if you tell people the truth, it always is better. And I think if you educate people, you're creating your future managers also. And so people love to understand and know why they're doing something and how the math works. So I think that's a failure. But great question. Thank you so much for that and hopefully we gave you food for thought. Let's do the next one.

I work in a high volume used car dealership. I've got my shops based mostly on the used cars and then we're trying to get customer cars in there also. My question is, is how do I convince the dealer principal that he needs to run one labor rate for used cars and customer pay so all the numbers balance. I'm having to run my used cars at $80 an hour when my door rates 150. And he wonders why my numbers are off.

That's a good one, John. So I usually take a couple different swipes at this one. And depending on your boss and how they think is the first thing that I would do is I would establish what our cost is per stall so he understands, like what it cost us for the phone, the rent, for your advisors, everything. You know, you take all of your expenses and then divide them by how many stalls you have and then having that number. So you're talking about, you know, how profitable should we be in. In the service department. Then the second one is then showing him your hours per ro. So if, let's say you're probably. I'm Going to guess running a little under two hours a ticket right now for your recon on the used cars, but let's just use two as the example, and then you can fill in the real number. If you're charging $80 for internal and 150 for external and the average car has two hours of labor on it. Christians like rain men with math. What is the math on that? What's the difference between the two?

$140 ticket.

If we are going to lose a used car sale over $140, we might want to rethink everything. Yeah, like literally over $140. We're not going to be able to sell it. We might want to buy different. We might want to have better salespeople. I don't know. There's a bunch of things we might want to do, but $140 isn't keeping us from selling a car. And so it's not about the labor rate at the end of the day. Usually what it is is they're buying edgier stuff. In the edgier stuff, it's not 140. It's six or seven because you're, you know, you're having to fix a problem. But I make that point. So I talk about our cost, what our profitability should be, then we're not going to lose it over 140. And then I show them how the gross retained in service goes right to the bottom line. The gross in sales, usually you're giving away 20% of that to salespeople, you know, f and I, whatever it is. But at the end of the day, you're holding on to way less of it on the front than you are having it go on the back. So the most successful operators out there will pack their used car recon because they're retaining that money and it's going right to the bottom line instead of give, you know, giving it away on the front. It also in every situation I've ever been in, and I've been a general manager, I've been a dealer, they, the salespeople sell from cost up. If that cost is $200 more, they're selling from cost up. They look at that car and they say that car should be a $3,000 gross. And that's how it works. So it's cost up more than anything else. So those are kind of the steps. Do you have anything you'd add to that?

Yeah, I think the big lesson is that it's fixed gross versus variable gross. And I would say that every Time you sell an hour of labor at 80, you're losing that $70 an hour. 100% of the time you're losing that.

You.

And then you're rolling the dice to think you're going to catch it on the backside. And it just doesn't happen.

100 never happened. I've never seen it happen where you lower the labor rate and the used car department makes more money.

That's right. And at the very least, it happens sometimes, but not often. So I would much rather have the money in the bank. And I like that idea of figuring out what you need to do to cover your costs because you can actually break that down. And what you would probably find out in his scenario is, is that at $80 an hour, he's probably losing money when he's reconning a used car in his stall. That would be my guess on the service side. And then with a volatile market, the used cars then could also lose money. So you're losing in the front, losing in the back, and then that really becomes a nightmare. So I just think that it's good business sense to charge what you charge customers on the internal side. And like you said, there's people that do more, but thinking about it as fixed gross and guaranteed income at the bottom line at the end of the day. So you're. You're from up in that area. Like Yakima is close to Port Orchard.

It's the same state.

Same state, but completely different sides. There's also like, you know, like that Pacific Northwest you went. You were in Alaska.

Wait, is this the beginning of a joke?

Were you. You've been to Alaska before?

I have been to Alaska, which is not a. Not a place I would go back to.

No. The guys were talking about, like, is a crazy murder rate in Alaska or something like that.

So crime, most felons.

Yeah. So I don't see us moving suicide anytime soon. But I. I can't remember. What's the capital of Alaska?

Juneau.

I don't. What's the capital of Alaska?

Oh, man.

And why are you talking to me in a funny accent?

Oh, I should have said Anchorage.

That is a common answer.

That was a great segue, Chris. Shown.

Thank you.

Thanks, everybody. Remember the numbers. 8,000, 333. Ask STR and we'll see you next time on Service Drive Revolution. Thanks for watching this week's Drive By. I hope we gave you something to think about over the weekend. We're uploading new stuff every day, so make sure you subscribe and click the Bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call 8333-ASK SDR and. And we'll answer your question on the show. That's 8333, ask SDR. For special deals on our books and training, head over to offers.chriscollinsinc.com now that's offers.chriscollinsInc.com I'm Chris Collins, and I'll see you in the next video.