I'm not sure why I've become so focused lately. When I spent the lion's share of my time on the shop floor, the only numbers I ever cared about were book times and whether or not I could 'beat' them. That didn't have as much to do with productivity as it did my own competitive nature - matching my performance against the imaginary scale or model presented in the Labor Guide. Productivity as a concept wasn't a very attractive distraction at that time. After all, the most important thing was fixing the vehicle, making the car or truck whole again, solving the puzzle. Insuring profitability was someone else's responsibility. It certainly wasn't mine.
Now, I find myself on the other side of the office door or in front of a classroom filled with other shop owners, and to say my focus has changed would be a gross misstatement of the facts. Bottom-line financial responsibility is clearly a front-counter, management function, and ignoring it or hiding from it won't make it go away. The industry looks a lot different from the office than it did from under the hood. And, I suppose my fascination began when I realized that understanding the numbers - understanding what they represent, what they are trying to tell you - helped put these differences in perspective.
You see it wasn't just a matter of me against the 'book' anymore, and whether or not the times were accurate or even realistic. Now, there were others involved in the struggle, individuals with different skills and abilities. I was no longer responsible for just my own performance, even though that performance had a great deal to do with the overall success of the business. I was now responsible for the lives and the livelihoods of a half-dozen other families. The decisions I made no longer affected just me; they now had a much more global impact.
There were other factors contributing to the overall success of 'the business.' Parts availability plays a dramatic role in productivity. Productivity and technician efficiency are critical to the success of both the technician and the business, but, no more or less important than the many other factors impacting the technician's ability to accomplish the job in the time allotted. Parts margins are important, as are gross profit margins on labor. Return on Investment and Return on Assets are important, but no more or less important than other Key Performance Indicators like Average Invoice, Labor Content per Invoice, Car Count, Labor Mix, Average Invoice Expense and a host of other concerns, all of which can be expressed in averages, ratios and relationships.
The more I realized the importance of these critical numbers, the more I wanted to know and understand. How do they interrelate? What do they mean? How can I use what I know to change the realities I face every morning and every evening? And, perhaps, most important, how am I doing? How am I doing compared with everyone else?
The harder we worked at understanding what the numbers had to say, the more we were able to concentrate on taking the business where it needed to go. Productivity climbed, not necessarily because our technicians suddenly began to work faster or more efficiently, but because we realized that the times in the labor guide did not reflect the aspects of the job most critical to us. Once we increased the times to reflect the two or three road-tests that accompany every job, the time required to ensure the job was cosmetically 'clean' enough to meet our standards and the extra time necessary to communicate with the motorist, we were amazed at just how quickly our technicians improved 'their' performance.
As we began to understand the impact world-class customer service has on the relationship you share with your customers and what it costs to deliver that quality of service, we realized just how important it is to ensure the profitability of the business. You can't achieve that level of performance without profits, and you can't create profit without that quality of service.
Numbers. Relationships. Ratios. Proportions.
You begin to understand that there are certain relationships - certain numbers that represent success. And you begin to key into those numbers with a fierce determination not only to understand them, but to move them in a positive direction.
You start to look for ways to recover lost labor times and other ways to increase parts margins. You begin to focus on profitability with regard to everything your technicians do. Ultimately, you are forced to make choices, some of them difficult, but all of them in the interest of future success, the best interest of everyone involved. In so doing, you begin to look for reassurance: benchmarks and mile markers. Ways to know you are moving in the right direction.
I'm not sure when I realized there were really no industry standards to match our performance with or against. Or, that all the numbers we have been 'given' aren't necessarily all that dependable. I'm not sure I know where they come from, do you? I don't know when the last industry survey was taken, who did it, what they measured or what happened to the results of their research either. I know no one ever asked us for information. Did they ask you? And, if they did, how representative is your shop of the industry as a whole?
Sure, there may have been surveys of select subgroups in the industry, but what happened to the results of those surveys and when was the last general management 'census' taken? What really is the average shop productivity across the United States? Aren't you the least bit curious to know? Aren't you interested to see how you stack up, where you fit in?
Everything I have seen suggests that the 50 to 55 percent number for shop productivity I've encountered just about everywhere is accurate, but is it? I think it's important to know, especially if you have just started trying to improve productivity at your shop. I'd like to know what the Average Invoice across the nation is as well. Not just at the better shops, not just at the shops affiliated with a group, a program or an association, but across the largest number of shops possible. I'd like to know what it is at specialty shops versus traditional shops, large shops versus smaller ones. One more thing, I want that information to come from within the industry, from a source I can trust, not from some outside research institution that's going to tell us it's ok to survey a fraction of the shops constituting the total universe of service outlets, and then extrapolate that information into something someone else insists is statistically significant.
That is why we here at Motor Age have decided to actually do something about it. Instead of reporting what others have done, we are going to participate in the research ourselves. We are going to ask all of you, our whole subscription list, to participate in perhaps the largest research study ever undertaken in the automotive service industry. If you are a shop owner or manager, we are asking you to share your information with us and with the rest of the industry by participating, by taking the time and dedicating the energy required to fill in the blanks. And, to ensure the information we are getting is accurate, we are qualifying the list by asking for your subscription number. This eightdigit (maximum)number is found on your mailing label, right above your name, and starts with the letters "MA."
If you're not a subscriber, be sure to answer all the questions and include your contact information, in case we need to verify your submission. In addition, for those readers with Internet access, the survey can be submitted online, via the Motor Age Web site at www.motorage.com.
We know that time is money, something else I learned by focusing on the numbers, and so we are initiating a sweepstakes with prizes to be awarded to only those shops participating. Instead of offering just a few "large" rewards, we are offering a higher number of smaller prizes so that more people can win. And, to ensure that everything we do benefits the industry we all serve, those prizes and awards will all be industry-specific, such as gift certificates for ASE testing, ASE study guides and training videos.
In some cases, what we are asking may seem almost too basic. In others, it may seem like a lot. All I can tell you is that I personally believe this exercise is critical if we are to understand our industry as it truly exists. We need your numbers to make this happen. We need you to participate, if for no other reason than to finally dispel the myth of apathy and indifference that has plagued us as long as I have been in this industry.
Enter the sweepstakes. Answer the questions. They aren't that difficult. It shouldn't take long. How many bays do you have? How many technicians? How many employees in general? What is your Labor Rate? What were Gross Sales for last year? How many cars do you work on per day? There is certainly nothing here you don't already or shouldn't already know.
Don't let your anxieties stop you. Everything you share with us will remain confidential. No one will have access to your specific answers. All we're asking for is your participation, your willingness to share.
The hard work will be done here, at the office and by our research staff. And, as we collect and compile the data, we'll share it with you so you can see just how you are doing, just where you are. Not, only will we share it with you, we'll even provide some suggestions on how to take your business from where you are now to the next level in a series of management articles based upon the survey results.
I'm not going to lie to you and tell you that spending hours immersed in the numbers that are your business is fun. It isn't. But, there is nothing else you can do that will make you more money, faster. In the end, it is the only way to accurately measure performance. Our goal, my goal, is to give you something of substance, something real, something of consequence, something from this industry and by this industry to match that performance against.
So, please, participate. Take a minute to fill in the blanks. Give us the opportunity to create the benchmarks we have never had but need so desperately. Don't leave this important exercise to someone else. We learned in Florida just a few months ago that everyone counts?????? if they are counted. Your response counts, because it will be counted.
