Productivity vs Efficiency
As a repair shop owner which would you rather have a productive auto repair technician or an efficient technician?
Twice as many searches are done each month on Google for Technician Efficiency vs Technician Productivity. This tells us that shop owners know just how important efficiency is to the success of their shop.
You may have an automotive repair shop that is full of movement, but if your techs have low efficiency, we can guarantee you are leaving money on the table.
This article answers the most common questions: –
–What are Productivity & Efficiency?
First, it helps if you know the difference between Productivity and Efficiency.
What is Productivity?
Productivity is the total labor hours in a given time period divided by total hours of floor time or actual timeclock hours worked in the same time period. 90% productivity is a good figure to shoot for. If your shop is below that, it probably isn’t your technicians at fault. Your repair order writer needs to stack those efficiently done orders into an eight-hour day to make eight hours of labor sales (or more) per day.
What is Efficiency?
Efficiency is measured by how long your technician(s) take to complete a job, versus the estimated time in the labor guide. In most cases, technicians are above 100%, when it comes to efficiency.
You pay your staff for 8 hours and the time clock shows they were there for 8 hours before calling it and going home for the day. Have they been productive? Yes, they have, kind of, probably. But have they been efficient?
Does Technician Efficiency Really Matter?
If technicians are pushing work out and it looks like they are working most of the time isn’t that enough?
Technician efficiency only matters if you want to stay in business and make a profit. Shops that are not efficient will be out of business, the car repair business is just to competitive and owning an automobile workshop brings so many overheads and expenses that efficiency is the difference between going out of business and being profitable for years to come.
Efficiency improves productivity, the more efficient your shop is run the more productive your technicians will become. As repairs get finished quicker there will be time to bring in more repairs and more work equals more income for the shop and more profits for you the shop owner.
How to calculate technician efficiency is covered in a previous blog post here. As with most things you can do it with pen and paper or excel but it is easier to do with Auto repair shop software.
5 Ways to Improve Technician Efficiency and Productivity
Now that we’re dealing with the actual numbers that matter for your bottom line, where do you need to see improvement? We speak to repair shop owners every week and they all know deep down what they need to change in their business, here are a few things to look at
- Cell Phones and Smoking
- Is the right skill level technician working the right skill level job?
- Are technicians being pulled on and off of jobs without completing them?
- Are technicians waiting around for parts, or ‘OK’s’ on the work they’ve done?
- Are technicians waiting around for instructions on what to work on next?
These are all process problems, fixing the process will improve shop efficiency. You can’t blame your employees for what you need to be doing in managing your business. What does your company manual say about cell phone usage and smoke breaks?
If you aren’t getting the repaired OK’d by car owners quickly, or not ordering parts in a timely fashion that means you are slowing down productivity and affecting efficiency, not the techs.
As for productivity, the daily process of stacking jobs most productively depends on a properly trained service writer. Your service writer is the quarterback of the repair shop world. They are generally among the best-paid member of staff and they earn every penny as they have to juggle every part of the system. An efficient and experienced service writer will make sure your techs have enough work to fill their days.
You can have technicians capable of operating at 130%-150% efficiency, but if their work isn’t scheduled to maximize that efficiency, then you may find yourself consistently falling below the 90% efficiency figure mentioned above. In short, they can’t fix cars that are not sitting there ready to be fixed.
Your job as the shop owner is to make sure that you are doing the right repair shop marketing, getting Google reviews, sending emails out and getting positive local word of mouth.
What Does Increased Efficiency Mean To The Shop?
As the shop owner increased technician efficiency means increased income and increased profits. Over the last fifteen plus years of speaking to Transmission shop and general repair shop owners about how software can help their business the bottom line is that they are seeking to improve their profitability.
Increased efficiency is the way to increase profit
The most profitable shops we see are always the most efficient, they always have top level techs and parts guys and they always run their tech efficiency reports and watch the Profit Per Hour indicators that are built into Profitboost.
Let’s look at some numbers and we will see how increased efficiency will improve your bottom line. If you have watched our video on how to calculate technician efficiency you can scroll down a bit now, I won’t be offended.
How many techs do you have? 5
How many clock hours a week do they work? 40
So each week you have techs there for 200 hours, you can sell 200 hours of work and they have the time to do it all. Well, let’s be fair and remove the hours they spend doing nonincome producing things, tool truck, company meeting, driving a customer home, chasing parts and any one of the other half dozen things that some shops get their techs to do.
Each tech loses 2 hours a day to the things that don’t produce income, that is 10 hours a week each, so we are down to 30 hours x 5 techs = 150 hours
Each technician is being paid for 40 hours but only has 30 to actually wrench turning work. Now if they are good techs they can do 40 hours of book time work in 30 hours.
What if you stopped using your techs to drive people home, what if you made sure every part was in stock before they started working on the car, what if you reduced the (quite often needless) company meetings.
Suddenly your tech has 40 hours of actual wrench turning time, so your 5 techs can now do 200 hours instead of 150. You just freed up 50 hours of work by being more efficient.
So instead of 5 techs, you now need 4 to do the same amount of work. Reducing your staff by 1 could save you $50k a year.
The other way to increase profitability is to improve your shop marketing and get more work through the door, so keep all 5 techs but sell the extra 50 hours a week.
You get paid to fix cars, that is your prime objective. Doing it efficiently will keep everyone happy.
By the way, if you think the idea of losing 2 hours a day to nonincome producing work sounds far fetched, well start using the Time Clock and look closely at your reports after a couple of weeks and you will be surprised.
Which is best?
Do you want your technicians to be efficient or productive? Both is the answer, of course, it really isn’t a one or the other type of scenario.
Efficiency is a Team Effort
We have covered many ways you can help technicians be more efficient previously. But the main thing you need to remember is that it is a team effort. The whole shop has to buy into the need for efficiency.
Use the tools available to you in your shop management software, text messaging customers, ordering parts online, Digital vehicle check-in, and of course the time clock, to make every part of your operation more efficient.
If the person in charge of parts ordering can’t see how they affect the technician efficiency and the shop profitability, then you are doomed. As the business owner, it is your responsibility to make sure every member of your team understands that you are on an efficiency drive and why. Without shop profits, there is no shop and no shop equals no work for them.
Ready to learn how Software can increase your efficiency? Try a 30-day free trial and call us to discuss how we can help your shop be more efficient and more profitable. 888-274-3776