Measuring Service Technician Efficiency

Efficiency within all parts of a dealership will generate more profit for the dealership.  This is most important in the service department where your gross profit should be over 70-80%. Proper management, scheduling, status tracking and customer follow-up on service technicians performance are all key elements of maximizing profitability of your service department.

Service efficiency can be measured in many ways. If you are not running a 100% flat rate shop, you can still measure your service technicians’ actual hours recorded to payroll hours. This can only be done if your service technicians are tracking their actual time on every job they are assigned, either manually (not recommended), or by time clock. The IDS system also provides a mechanic time card entry feature so that the technicians can clock in and out of jobs via the IDS system. These hours are automatically fed into and tracked by the work order. If this type of system is not feasible in your dealership, the recommended way to record service hours is via a daily mechanic time card, which is entered into IDS on a daily basis by the service writer or manager.

In addition to comparing actual hours recorded vs. payroll hours, if you have flat rate manuals loaded into IDS and/or canned jobs setup within IDS, you can also use the IDS system to run the service technician efficiency reports compared to chargeable or billable hours.

Another key element of maximizing service gross profit is to understand what your effective labor rate is. If your effective labor rate is less than your posted retail hourly rate, then you have inefficiency within your service department. A good technician will be able to bill 7-8 per day, a great technician will be able to bill up to 12-14 per day. If your technicians are not achieving these types of numbers, then you need to first review how your labor that is being performed daily, is being recorded to the IDS system. The first place to start is to record the labor on a daily basis, provided the technicians are recording their actual time on each job they are assigned. The next element to analyze is how much time the technicians are standing around waiting on parts, which should be noted on their daily time sheet. If your parts department cannot pull parts for the technicians when they are needed, this also will reduce the efficiency of your service department. Also ensure that your technicians are properly trained on the product they are servicing.

There are many reports in the IDS system that will give you information on mechanic efficiency, labor hours recorded for actual and chargeable, and service profitability. These are all found in the Service, Work Order, Reports menu, which can be accessed via the menu numbers of 4-3-2.   The most used reports for this topic are

1. Labor Hours by Labor Date – Menu 4-3-2-34-3.
2. Service Profitability – Menu 4-3-2-20.
3. Mechanic Hours – Menu 4-3-2-14 or 5.

You do not have to be a full flat rate shop in order to achieve maximum efficiency. All it takes is proper management and understanding of the elements involved.  The first place to start is to review how and when your labor hours are being recorded into IDS.

If the gross profit of your service department is less than 60%, it is time to learn more about this topic. To arrange a consulting session with one of the IDS Professional Service experts in this area, please contact the manager of the Professional Services department, Marilyn Melkus, at m.melkus@ids-astra.com.

A team approach is an important part of turning any RV service department into a profit center. A service team dedicated to helping your customers will go a long way toward developing a loyal customer base.