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Issue link: http://read.dmtmag.com/i/481024
What is the most damaged, broken, in need of repair area in our dealership? Why it's the service department of course! You try to help your customers repair or service their broken equipment with a department that barely gets equipment out in a timely manner; loses money or, at best, breaks even; and if it had to function on its own, would probably shut down. What leads us down this road? Low expectations. If you ever want your service department to be- come a profit center, a foundation of your business, you need to expect more, and with that expectation, drive the department into a new direction. Make the service department a priority, and the benefits will be tremendous. Time is The enemy You need to create time! How do you do that? Flat rate as many tasks as possible. An easy rule of thumb if you have no flat rate guide is to take the warranty flat rates and multiply them by a factor. I would suggest 1.5 as a starting point. If the manufacturer suggests 1 hour, then you are billing 1.5 hours. Your technicians need the opportunity to gain time, not lose it. (This could mean the possibility of billing 12 hours in an 8-hour day). Every man- ufacturer might be a little different with regard to the factor you apply, but you need to make sure you are creating time for your service technicians so they can produce the billable labor that you need to have an efficient service department. This means that you have decided to assign value to the time of the service technicians. Would you rather have a technician working on equipment for 8 hours a day or 6 hours a day? Obviously, 8 if there is work to be done. This means they cannot be made available to unload trucks or perform other jobs when they can be producing 1.5 times the labor rate. If you charge $60 an hour for your labor rate, you are really billing $90 for that technician's time. Why would you ever want to have technicians stop what they are doing? I walk into service departments all the time where the efficiency is around 50 percent. I often see service technicians who, without much effort, could be 20-30 percent more efficient if they weren't being asked to leave their work area so much to answer customers' questions, unload trucks, or pull their own parts. In part two of this series in March 2015 OPE, I mentioned the parts department's role in the service department process and stated my firm belief that the parts department should be delivering parts to its biggest customer — the service department. Going forward, technicians need to be aware that they will be evaluated and rewarded by being 100-percent efficient. You are giv- ing them more time, and they have to know that the goal is not to extend the repair time, but to be efficient and beat the flat rate 80 percent of the time. Standards need to be set, so that owners, managers and technicians know what they are working toward as a goal, and establishing a flat-rate time helps do that. Wasting time in any way is the enemy! Good processes maTTer The more rigid of a process that you put in place and can be fol- lowed without a lot of ability to divert from it, the better your ser- vice department will run. Anyone who has ever had me visit their dealership knows that I advocate beginning the process the first day that the dealership takes in the equipment. You need someone to look at the equipment and make a determination if it was brought in for the correct reasons and if there are additional items that need to be repaired. You then "triage" the equipment, which means sort- ing and deciding which piece of equipment should be repaired or serviced first based on parts availability and whether you need to contact the customer for further repairs. One of the goals of this is to determine the need to order parts early in the process, so that 16 APRIL 2015 OUTDOOR POWER EQUIPMENT www.outdoorpowerequipment.com Feature Story | Best Practices PHOTO BY STIHL INC. ■ By JeFF SheetS Profit Center Series (Part III): Service Last in a three-part series: