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A formula for self-checking the health of your Service Department
Use the following formula to give your Service Department a Performance Check Up. Even healthy athletes need to have a Doctor check them out from time to time. The same applies to your Service Department. Discover where your team excels. Discover where your team needs from healing help.
Key Points to Consider:
1. Performance Measurements:
- Customer Repair Orders vs. Gross Profit: If customer repair order counts increase while gross profit dollars decrease, it is a cause for concern. This discrepancy indicates inefficiencies or potential issues in service pricing or operational costs.
- Conversely, if gross profit dollars remain stable or increase while repair order counts drop, this signals a major red flag. It suggests that the dealership is losing customers or not generating enough business to sustain future growth.
2. Consistency in Execution:
- High-Performing Entities: High-performing entities such as Apple, Cisco, and successful sports teams like the Yankees consistently execute well-developed processes. This consistent execution is at the core of their sustained success.
- Application to Dealerships: Dealerships can achieve similar success by implementing consistent processes in their service operations. This involves not only creating comprehensive plans but also ensuring these plans are executed consistently over time.
3. Developing Cultural Consistency:
Three Steps to Success:
- Planning: Develop comprehensive and detailed plans. This involves setting clear objectives, determining the necessary steps to achieve these objectives, and identifying the resources required.
- Execution: Implement the plans meticulously. Ensure that all team members understand their roles and responsibilities and have the necessary tools and training to execute the plans effectively.
- Follow-Up: Continuous follow-up is crucial for maintaining consistency. Without regular follow-up, even the best plans can falter as pieces of the process are executed inconsistently or are abandoned over time.
Importance of Follow-Up: Follow-up should never end. It is an ongoing process that ensures the initial planning and execution phases continue to deliver results. Without follow-up, plans can become dormant and eventually fail.
4. Service Department Health Check:
- Objectives: Clear objectives are necessary for measuring success. Without objectives, any result can be seen as acceptable, which undermines efforts to achieve high performance.
- Plans: Detailed plans are required for achieving these objectives. Plans should break down each objective into manageable tasks, allowing for thorough execution.
- Participants: The right team is crucial for executing the plan. It’s not about having more people; it’s about having the right people who are capable and motivated to achieve the objectives.
- Installation: Implement plans step-by-step, addressing issues as they arise. Recognize that there will be challenges and be prepared to overcome them.
- Maintenance: Discipline and consistency in system maintenance are key to sustaining success. Regular audits and follow-ups help ensure processes are being followed and objectives are being met.
5. Detailed Processes and Tools:
- Job Function Audits: Ensure employees have clear job descriptions and understand their responsibilities. Regular reviews of job functions help maintain clarity and accountability.
- Repair Order Audits: Regularly review repair orders to maintain accuracy and compliance. Accurate documentation is essential for legal compliance and operational efficiency.
- Garage Operations Audits: Monthly audits of various operational aspects ensure issues are addressed promptly. This proactive approach prevents small issues from becoming significant problems.
- Multi-Point Inspection (MPI) Audits: Regular checks of MPI processes prevent liability issues and ensure thorough inspections. Properly performed MPIs are crucial for customer safety and satisfaction.
- Reception Process Audits: Audit the service reception process to improve customer experience and operational efficiency. A well-organized reception process sets the tone for the entire service experience.
6. Practical Considerations and Tools
- Competitive Labor Rate: Determining your competitive labor rate involves understanding the market. This can be achieved through market research and benchmarking against competitors. Regularly reviewing and adjusting labor rates based on market conditions ensures competitiveness.
- Planning Calendar: Using an organized calendar to allocate time for proactive activities helps ensure that important tasks are prioritized and completed. A planning calendar allows managers to break down large projects into manageable tasks and schedule them effectively.
- Audit Tools: Developing and utilizing audit tools for various aspects of service operations helps maintain cultural consistency. Audits provide a structured way to review processes, identify areas for improvement, and ensure compliance with established standards.
7. Importance of Cultural Consistency
- Definition: Consistency involves agreement, harmony, or uniformity within an organization. It ensures that all parts of a complex system work together seamlessly.
- Achieving Excellence: Embedding cultural consistency leads to sustained high performance and customer satisfaction. It involves setting clear standards, training employees to meet these standards, and continuously auditing and adjusting processes to maintain them.
- Role Models: Companies like Porsche, Lexus, and Roger Penske Racing achieve excellence through cultural consistency. They start by setting high standards, designing detailed processes to meet these standards, and aggressively maintaining these processes through continuous follow-up.
Wrap Up:
Consistent follow-up and auditing are essential for maintaining high standards in service operations. By developing a culture of consistency, dealerships can ensure long-term success and customer satisfaction. Detailed audit tools and maintaining clear job functions are practical steps toward achieving this goal. Regularly reviewing and adjusting processes based on audit findings ensures that the dealership remains competitive and meets customer expectations.
There are several more suggestions available on how to effectively follow up with “Services Declined” customers. But first you have to have sufficient data and detail so that your efforts can be successful.
This topic is adapted from just one recommendation from the DealersEdge publication: “Fixed Operations Management Skills Guide.” Receive full details on how you can get a copy via the links below.
390 Pages of Fixed Ops Management Wisdom... Tabbed for Easy Reference
Financial Analysis Tools For Fixed Ops
Pricing Formulas for Service & Parts
Service Advisor Coaching
Parts Dept Profit Management
Plus What Fixed Ops Managers Need to know about the Entire Enterprise
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