CED

October 2012

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Aftermarket Standard Times & Flat Rating What is everyone so afraid of with this approach to service? BY RON SLEE Many years ago, I joined a dealership that had been running a flat rated operation since it started in the 1950s. That was the service para- digm that I grew up with – a planned service operation, assigning work to individuals with time expectations for most of the work. I didn't see a job shop for a few years, and when I did I was stunned. How can you operate a repair and maintenance facility without using standard job codes to manage and measure performance and provide prices and completion dates to customers? I thought that there was no way that there would be means available to manage and super- vise such an operation. I am more convinced today than ever that I was right then and continue to be right on standard times and flat rating. The next step in the progression for me was to be on a small committee of dealer and supplier personnel to review and design a major service manage- ment control system. This spanned establishing job code structures and time collection methods to use. This was plugged into the Service Department system design at the dealership. Standard times should be as common in dealer service operations as the system solution itself. That is true, but it also requires a few critical elements be in place. Job Codes If you are going to run a standard time operation, you have to be able to monitor the times taken to perform tasks and be able to adjust them based on your actual performance. That means a water pump removal and installation has to be done using the same job code in every location and each time it is performed. The coding structure should be simple and consistent. It should cover a compo- nent code, an operations code and a sequence code. But it should be so simple that people can look at the code and easily tell you what it means. This code is not intended for engi- neers at a manufacturing plant – it is designed to be used by technicians in a service bay or on a field truck. Job Segments The work to be done must be broken down into manageable blocks of time. That means there will never be a job segment longer than eight hours nor one shorter than 30 minutes. The eight hours is simple enough to understand when you consider a schedule. If you think about an engine overhaul, which might take 40 hours, I don't want to give that job segment to a techni- cian. At the end of the day, I will ask if the work is on schedule and I will get back an opinion. But I don't want an opinion – I want a Yes or No answer. This is critically important to managing a schedule to a completion date. Standard Times The next thing we have to provide is a standard time. This is an area that a large majority of people get wrong. This is not the average time it takes to perform the work. But let's begin properly. The time taken to perform the work is when all the parts are with the technician before the work is started. The clock starts running with all parts present and man-hours being applied to the job. The techni- cian performs the job and it is added to the work order, as well as updating the standard time files. Simple enough isn't it? I agree, but I want to go further. When you provide a fixed time for a job (which for the customer means a fixed price and completion date), you are assuming all of the risk for the job. With time and material work, the customer assumes all the risk and this is where they feel vulner- able. You know the feeling well: The shop is the black hole into which work goes, and we don't know when it will come out or what the price will be. You have to apply a risk premium. Now we can provide meaningful quotations on all work performed. Now we can manage the function, provided we have strong schedu- ling systems. We can then provide completion dates that are going to be met. All the surveys on the Service Department that I have seen from AED tell us what the customers want from service: n Price n Responsiveness n Convenience n Quality Standard Times and Flat Rating answer all those needs. If the customers tell us they want it, shouldn't we deliver it? I thought so. The time is now. RON SLEE (ron@rjslee.com) is the founder of R.J. Slee & Associates, Rancho Mirage, Calif., celebrating more than 30 years in business in the United States, a consulting firm that specializes in dealership operations. Ron also operates Quest Learning Centers, a company that provides training services specializing in product support, and Insight (M&R) Institute, a company that operates and facilitates "Dealer Twenty" Groups. Fol- low Ron on Twitter: @RonSlee; and read his blog at learningwithoutscars.com. October 2012 | Construction Equipment Distribution | www.cedmag.com | 57

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