SERVICE CAPACITY GUIDEBOOK I MARCH 2017 MAXIMIZING SHOP CAPACITY

Transcription

1 SERVICE CAPACITY GUIDEBOOK I MARCH 2017 MAXIMIZING SHOP CAPACITY Measuring and Managing Shop Production Customer Scheduling Methods Repair Order Dispatch Shop Organizational Systems Implementing Alternative Work Schedules

2 2 SERVICE CAPACITY GUIDEBOOK I MARCH 2017 MAXIMIZING SHOP CAPACTIY Pg. 3-6 / Introduction Pg / What s My Potential Pg / Managing Production Objectives Pg / Technician Production Roadblocks Pg / Customer Scheduling Pg / Dispatch Methods Pg / Advanced Production Systems Pg / Increased Clock Hours & Extended Hours Pg / Saturday / Sunday Hours Pg / Staggered Hours Pg / 4 10 s Pg / 3 13 s Pg / Adding a Second Shift Pg / 20/-10 Shift Pg / QA s

3 3 INTRODUCTION What this guidebook can do for you If you re reading this, it s likely because your dealership is searching for ideas to cope with increasing traffic in your service drive. It s a great opportunity, but one that has caught some by surprise. Since the quick decline in vehicle sales in , we have seen a slow but steady increase in new vehicle sales. The recovery rate has been impressive the past few years, breaking the 16 million SAAR rate in You ve witnessed this recovery first-hand in your dealership. Long lines in the service lanes. A lobby filled with owners waiting for their vehicles. Technicians taxed in getting maintenance and repairs done quickly during the work day. If not addressed promptly and correctly, service capacity issues can result in frustrated customers and overworked technicians. That s why we have created this guidebook the information and scheduling techniques featured here are designed to assist your dealership is seizing on the existing opportunities in increased traffic, while avoiding the pitfalls of a crowded service lane. This document offers the guidance needed to assess service capacity and successfully implement production management methods, customer scheduling, RO dispatch, and alternative work schedules for your dealership. Of course, it s not designed to be an all-inclusive document: each dealership is different, and to develop a document that was all-inclusive would not be worth the paper it was written on, because every topic pertinent to each dealership can t be covered. This guide will provide structure to minimize confusion when implementing change. People generally will not accept change with open arms. We all become comfortable in knowing tomorrow will be the same as today. We know what to expect and have no surprises. We like this, but look at business over the last several years. It s been nothing but change!

4 4 INTRODUCTION Capacity, Convenience, and Retaining Customers A key goal of this guidebook is to help you in creating shop capacity that is convenient for your customers. Convenience has never been more important to consumers. Think about the ways that we select products based on convenience: Phone apps where you can order food and it s ready when you arrive; online banking; lawn and pool service; internet bill-pay; remote controls, just to name a few. Banks that once were open 9-5, Monday through Friday, are now open full days on Saturday, and even Sunday! We live in a busy society. We all knew this was coming. Industry experts had been telling us this for years. But many of us ignored it because we believed that weekend and extended hours would only add to the 60+ hours that we, as managers, are already working. As a result, our customers have continued to disappear to the Independent Repair Facilities because they are willing to do what we have not been willing to do. The term retention is often used to measure how well dealerships keep the customers they started with. We define retention as this: earning the right to serve the customer a second time, based on the level of service your staff provided during the last transaction with the customer. The ability for your customers to get vehicle repairs and maintenance done at a time that is convenient to them is crucial to retaining them as a long term customer. Wal-Mart stores, the largest retailer in the history of the world, are generally open 24 hours a day, 7 days a week. Do their store managers work 24/7? Bet not! And that s because they have designed and implemented processes to make the extended hours work without overworking themselves and their staff. In this document we will discuss ways to satisfy the customer s needs and desires without overworking yourself and your staff.

5 5 INTRODUCTION Challenges: In addition to retaining customers, many dealerships are finding it difficult to attract and retain employees. The satisfaction of your current team and the ability to attract new employees could be in jeopardy if you have heard comments like these in your dealership: It takes too long to get used cars through service Technicians..I d hire them if I could find some that would want to work here I can t get anybody to work Saturdays There is a tech in every stall, so I can t hire more techs We re so busy my techs are working longer hours and are burned out We need more stalls, but my dealer says it s not the right time Sorry, but the soonest I can look at your car is week after next My dealer wants increased sales, but my guys are burned out Options: When met with any of the challenges above, your first reaction to improve the situation may not be the right one. As well, you may need to consider a combination of several options discussed in this document. Add brick and mortar, more bays in the service department Review current production levels for all technicians. Can improvements be made? Ensure all stalls are 100% utilized, to include flat stalls Increase the number of hours employees are scheduled to work. Start a little earlier, stay open a little later, and reduce lunch period from 1 to ½ hour If oil changes are going through normal service process, implement quick service Review different production and dispatching techniques Open for Saturday service, either half or full day. Offer extended hours by selecting an evening or more to stay open later Implement an appointment process based on production objectives Offer scheduled hours outside of the normal 5 day 8 hours per day schedule

6 INTRODUCTION The Road to Successful Shop Capacity If the challenges and concerns raised in the introduction are familiar to your dealership, keep reading! Your shop size and structure may not meet the changing business conditions and expectations of your customers. This guidebook is here to help by: Reviewing several key areas that directly impact production. The production of flat rate hours is one key measurement that affects our ability to meet customers needs now, and in the future. After ensuring you have a game plan for maximizing production with your current team, we ll review options to increase your hours of operation through scheduling. After beginning easy, we ll move towards ideas that may seem outside the box when compared with current schedules of many dealerships. Alternative Hours and Wok Schedules will have an impact on customer satisfaction and shop production, and will be reviewed. Extended hours, 4-10 s, 3-13 s, double shifts why one and not another? There is NOT a one size fits all alternative work schedule system. Each dealership is different. After having a better understanding of the benefits of each, you can make an informed decision. Any changes you make affect the financial performance of the dealership. When you enter your changes on a Proforma sheet, you may be surprised at the positive outcome Let s get started! CONTENT DISCLAIMER The content featured in this guidebook was created and compiled for FCA and Mopar by: M5 Management Services. Inc. 985 Yeager Parkway Pelham, AL

7 Service Capacity Guidebook WHAT S MY POTENTIAL? Determine key measurements for understanding your current facility capacity and areas of improvement

8 8 WHAT S MY POTENTIAL Evaluate Demand vs. Capacity: Do you have too much business? Your production supply (available shop flat rate hours) should always exceed the demand (customers). Think about this If your grocery store averages selling 20 loaves of bread per day and is restocked each morning, how many loaves of bread should the store carry? More than 20, right? Because 20 is an average, they likely sell loaves on some days and sell on other days, right? If they only stocked 20 loaves, they would run out of inventory on some days. If you went in to that store a couple of times late to buy bread and they were out, what would you do? You would probably find a new bread source, right? The same logic applies to your labor supply. You need to minimize the risk of running out of production. If you regularly run out of production supply, your customers may find themselves a new vehicle repair source. Until technicians understand the concepts of this argument, they are not likely to be big fans of the logic. Technicians are generally very logical people. When the logic makes sense, they are typically very cooperative. How many Jobs do your techs work on each day? The average technician works on 4 to 5 vehicles per day. To calculate your average, simply divide the number of vehicles you serviced last month by the number of working days divided by number of technicians. So, based on the average, for every 5 vehicles that are not scheduled within two days, there may be a need for an additional technician. If a customer calls today and it s more than a 1-2 days to get in, that can be a potential Customer Satisfaction problem. How many days are you booking out appointments for services and minor repairs? If your business consistently exceeds your production capacity, you have a capacity overload situation or condition. How many carryovers do you have each day? For every 5 carryovers (not held for parts or inprogress), there may be a need for an additional tech. Or can this be solved by increasing the production of your current staff? If your production is already good, do you have enough stalls to accommodate these additional techs? If not, extended hours might be a good choice. In addition to your known capacity issues, consider that when your shop is overloaded, it has a direct effect on: Menu Sales, Inspection Sales, Technician Proficiency, Production Objectives, Dispatch, and ultimately profits. Let s explore each of these on the next page.

9 WHAT S MY POTENTIAL Menu Sales: If your department is in a capacity overload situation, you are likely losing menus sales opportunities. When a service consultant has work from yesterday that didn t make it thru the shop and doesn t know how the work he already has written today is going to be completed, there is little reason to inspect a vehicle or to ask for an additional sale. Inspection Sales: Again, if you are in a capacity overload situation, technician and service consultant efforts in recommending and selling additional needed items will suffer. Not that the technicians and consultants don t care, they understand the reality that the main focus is on fixing the prime that the vehicle came in for and catching up from the previous day. The service consultant may or may not even take the time to inform the customer of the findings. In some cases due to the fear that customer may actually say yes, and the shop just can t get it done. This is a bad situation for both the customer and all parties at the dealership. Shop Proficiency: The demand vs. capacity issue that we are discussing assumes that the productivity of the shop is already good. Most service managers will define a good level of proficiency to be % or higher. A technician that spends 40 hours at the dealership should produce a minimum 40 hours. It is normal to have some technicians, lube techs or those with little experience, to be below 100%. You might ask yourself, what is Proficiency. It is a calculation of Technician Efficiency and Technician Productivity. Below is an explanation of Efficiency, Productivity and Proficiency. Efficiency is a measure of a tech s overall skill or ability level vs. the repair / job that was performed. It is calculated by dividing billed (sold) hours by the actual time the tech was on the job. Experienced techs should be at 100%+ efficiency. Techs that are consistently under 100% may need training, or the work should be redistributed to a more skilled tech. Productivity measures how productive a tech is with his/her time during their work day. It is calculated by dividing actual hours working on a vehicle by the number of hours they are available or present in a stall and capable of work. Tech productivity should be as close to 100% to maximize the opportunity for billable hours or work. Factors such as, breaks, long lunch, tool trucks, waiting on parts or upsells, dispatch. and shop layout all affect productivity. Proficiency is measured by dividing the billed flat rate hours by the available hours per tech. It is a very good indicator of your overall dealerships fixed operations performance, as it accounts for all aspects of repair process advisor write up, parts department functions, technicians (Efficiency)and management oversight and involvement (Productivity). Dispatch Bottlenecks: Many times proficiency is damaged due to dispatch bottlenecks which include: wasted time for technicians waiting for jobs; improper skill-match due to dispatcher s pressure to get the work out and dispatchers/service consultants taking care of their favorite techs. Even with the most sophisticated dispatch systems, advisors and technicians find ways to manipulate the dispatch rules, causing unfairness and reduced productivity. 9

10 10 WHAT S MY POTENTIAL? Your dealership will likely fall into one of two categories: 1. You have so much business you cannot keep up 2. You don t have enough business, and your need to become more retail-minded is now a reality Before we talk about different options, we need to determine the production capacity of your service department using current information. In addition, let s define the terms used below. Definitions for Calculation of Service Capacity Stall Count: Starts with counting all stalls where labor can be produced. This would include all work areas with a hoist, an alignment rack (labor is produced there), and flat stalls. This example has 12 hoists, 1 alignment rack, 2 flat stalls, and a car wash stall. 15 stalls. Clock Hours Available: The number of hours a technician is expected to be in attendance, per scheduled work day, according to the established policy. Start time 8:00AM-12:00PM 4 Hours Available Lunch period 12:00PM - 1:00PM 0 Hours Available Afternoon 1:00PM - 5:00PM 4 Hours Available Shop Proficiency Percentage: The calculation is flat rate hours billed divided by clock available. A technician that produced 50 hours in a 40 hour clock week would be 125% proficient Total Flat Rate Hours Produced Proficiency Calculator Excel Total Clock Hours Available Total: 8 hours Available Proficiency Calculator PDF = Proficiency Percentage 19,200 20,000 (10 Techs) = 96% Calculate your dealerships proficiency:

11 11 WHAT S MY POTENTIAL? Calendar Utilization: The calculation is based on the actual days available as a percent of the available days open for business. Days Available Monthly Number of Technicians = Total Days Available Techs = Days Total Available - 12 Days Vacation - 6 Days Training - 6 Days Sick Calendar Utilization Calculator Excel = 196 Days Actual Calendar Utilization Calculator PDF Actual Days Worked Monthly Days Available (Open) Monthly = Calendar Utilization % 196 Days 220 Days = 89% Calculate your dealerships Calendar Utilization: Shop Capacity (Hours) Calculation: The following calculation can be used to determine the service department s production capacity in hours. Stall:Tech Ratio (1:1) Stall:Tech Ratio (1.5:1) Number of Stalls Available Number of Technician Hours per Stall per Week Weeks per Year Shop Capacity (Hours) Calculator Excel Shop Capacity (Hours) Calculator PDF 89% 89% Calendar Utilization % 96% 96% Avg. Shop Proficiency % = 26,657 17,772 Shop Production Capacity in Hours per Year = Used in Calculating Shop Production Hours per Year Now that you know your current shop capacity in hours per year, how do you know if you have enough technicians to get the work done? There are several areas to review. Calculate your dealerships Shop Capacity (Hours):

12 Service Capacity Guidebook PRODUCTION OBJECTIVES Measuring, implementing, and increasing technician billable hours Goal Current

13 13 PRODUCTION OBJECTIVES Production Objectives, while normally introduced when implementing some level of Advanced Production (i.e. lateral support groups, etc.), they can be utilized in any shop structure. In this section, we will focus on traditional individual flat rate shops. Why Production Objectives Implementation and utilization of production objectives can improve the production of your current staff. For example, increasing production in an 8-10 technician shop by 10% has the same effect as adding one technician. Establishing Production Objectives essentially involves determining the average hours produced by each technician over a given period of time and applying a kicker increase that the technicians individually agree on. While production objectives are an extremely effective way of increasing shop production capacity, objectives are not maintenance-free. Production objectives require constant feedback from management. We, as human beings, are goal driven by nature. If no one is paying attention to the goals, they aren t goals. Daily production meetings are an absolute necessity in improving productivity through production objectives. When implemented properly, production objectives become a great source in building employee retention and loyalty. The technicians no longer feel like a loner. They feel that they now have assistance in helping them accomplish their personal financial needs. Objectives are also very valuable for scheduling and loading the shop. How can you effectively schedule and load the shop if you don t know what your capacity is? The accumulation of a group s objectives or a shop s objective for a period of time (day, week) is the amount of work that you can schedule and complete in that same period. Unworked carryovers tend to occupy parking space, create no revenue (until worked on), create rental expense, pose potential theft liability on the dealership, and aggravate customers who would rather have their vehicle at home. Production objectives must be implemented with-and-for technicians to really be effective. Technicians should be allowed to voice their concerns regarding roadblocks and should agree on the newly established objective.

14 MANAGING PRODUCTION OBJECTIVES How to Implement Production Objectives A key issue in managing production objectives is managing the personnel responsible for meeting those objectives. Service managers all over the country are being taught accountability and predictability. Holding employees accountable allows them to predict a response from management based on how well they have or have not performed. For example, service consultants are held accountable each day for properly scheduling appointments to maximize the use of a service department s facility. It is management s job to review the scheduling of its service consultants on a daily basis to ensure that this task is being performed. The service consultants are able to predict their service manager s response if the scheduling is completed or not completed properly. Also, employees are able to predict when their performance will be reviewed and the events as they will occur in the future if the service manager holds the employees accountable. Equally as important as accountability, is the fact that as a manager you are learning various leadership responsibilities. These responsibilities include, being taught to guide people, along with providing and demonstrating a sense of direction. People in any organization need guidance and standards. They must have goals and objectives as well as a personal mission statement. In order to establish production objectives, we compare the average flat rate hours produced by each technician per day utilizing a 10-week history of production and a 6-month history of production, then take the higher of the two averages. From this average we establish a production objective with each technician. A rule of thumb as well as a guideline to use in maintaining the average cost of labor sale is: Increase High Cost (A Level) Techs 5% Increase Average Cost (B Level) Techs 10% Increase Low Cost (C Level) Techs 15% Technician Name Tech 1 Tech 2 Week Ending FRH Produced Clock Hours FRH Produced Clock Hours 6/27/ /4/ /11/ /18/ /25/ /1/ /8/ /15/ /22/ /29/ Total Production % 107.0% 112.7% Average Week Average Day Select Target for % Increase in Production 10% 5% Weekly Production Objective Daily Production Objective

15 MANAGING PRODUCTION OBJECTIVES How to Implement Production Objectives (Continued) We must manage our production objectives once they have been established. We want each technician to hit (meet or exceed) the production objective 60% to 80% of the time. If the technician exceeds his or her objective more than 80% of the time, the technician earns consideration to have his or her objective raised. Less than 60% and the technician earns consideration to have his or her objective lowered. The opportunity to make a desired income, coupled with high morale has a direct effect on the productivity of our technical staff. Part of managing our shop s or groups production objective is managing our people by paying special attention to their psychological and emotional needs. Value your employees, show them you care for their needs, and you will receive the desired production. The end results are as follows: 1. Technicians meeting and exceeding their individual production objectives 2. Increase in labor sales 3. Increase in quality of work performed 4. Pride in workmanship 5. Teamwork 6. Increase in CSI scores 7. Fewer comebacks When establishing production objectives and the management of those objectives, we need to remind ourselves not to work for money, but to work for the people who produce and make the money for their service department. Managing Production Objectives in a Traditional (No Lateral Support or Team) Environment As mentioned earlier, we must be consistent in order for the management of production objectives to be successful. If management consistently reviews and manages production objectives, it instills predictability among the service employees, namely the technical staff. If management neglects to consistently manage production objectives, it is forced to react to negative situations such as a decline in productivity. For example, suppose you as service manager notice a decline in your department s productivity. Unfortunately, the you have not managed productivity on a consistent basis. You become concerned and react to the situation by immediately addressing the technical staff. As a result, productivity increases dramatically for the following 2 to 3 days. The end result of this reactive type of management is that although productivity increased, quality control suffered, comebacks increased, further hindering production, and Customer Advocacy scores declined. You might ask, What did I do wrong? Although your intentions were good, your management style lacks consistency therefore, employees are unable to predict when their performance will be reviewed. Production objectives can be established and managed in both a traditional environment and an advanced production environment. Let s look at a traditional shop operating under centralized dispatch. 15

16 16 MANAGING PRODUCTION OBJECTIVES Managing Production Objectives in a Traditional Environment (continued) Hypothetically speaking, we have a 10-technician shop operating in a 5-day work week. The service manager has made the decision to manage productivity consistency therefore, he or she meets with four different technicians per day on an individual basis. Psychologically, the technicians understand that they will meet with their manager at an established day and time to review production for the previous 5 days. They are able to predict the events as they will occur during a given week. The following diagram will be helpful: Tech Production Report Excel Tech Production Report PDF After 5 working days, the service manager reviews the production of four technicians individually. The four technicians who see the service manager on Monday have the previous week s production to review, which includes Monday, Tuesday, Wednesday, etc. One area of concern is whether the shop foreman, service advisor, or dispatcher will manage production objectives in the absence of the service manager. Any of these people are certainly capable, but a good recommendation is the dispatcher. This individual sees all repair orders and is aware of the skill level of each technician. The service manager can hold the dispatcher accountable for his or her actions. One key factor that motivates a dispatcher to manage production objectives is comprehension of its validity. Understanding the why is just as important as understanding the how. Of course, one setback is that the dispatcher has up to several technicians to monitor for production. Below are some blank production report sheets that you can utilize to calculate your shops production by technician. Calculate your dealerships technician production:

17 MANAGING PRODUCTION OBJECTIVES Financial Implications of Managing Production Objectives In the below example, let s assume we have a mid-level tech that consistently produces 9.0 hours per day. We want to improve production by 10% of.9 hours per day. The following positive financial results can be achieved through managing production objectives: Current Improved Results Difference (+/-) Overall Effective Labor Rate $72.89 $ Gross Profit % 67% 67% - Days per Month Avg. Flat Rate Hours Produced / Day = Monthly Gross for 1 Tech $9,274 $10,201 $ Months = Yearly Gross for 1 Tech $111,288 $122,417 $11,129 The results of managing production objectives have led the technician to produce an additional gross profit of $927 per month or $11,124 per year. This additional gross stems from an increase in hours produced by the technician: Avg. Hours per Day Days per Month = Total Hours per Month Current = Improved = Financial Imprv. w_increased Production Excel Financial Imprv. w_increased Production PDF Difference = 19.0 Hypothetically, if this service department had 10 technicians who achieved this kind of relative improvement, the following financial results would be achieved: 19.0 hours per month x 10 technicians = hours hours per month x $72.89 x 67% x 12 months = $111,288 additional gross profit Calculate your dealerships improved financial benefits with increased production objectives: Production Objectives Summary Consistent management practices lead to a positive end results, as seen in the above mentioned example. Consistency leads to predictability that forms positive and productive habits with service personnel. 17

18 Service Capacity Guidebook PRODUCTION ROADBLOCKS Monitoring, and minimizing the roadblocks to technician production, to maximize profits

19 19 PRODUCTION ROADBLOCKS Introduction In a dealership, there are many issues and tasks (Roadblocks) that can prevent a technician from maximizing their daily production of hours. Some days, no matter how hard they try, they run into endless roadblocks. You probably noticed on the title page for this section, that the term minimize and not eliminate is used. Eliminating all roadblocks may not be realistic and not always possible even in the most ideal shop and technician layouts. The ability to minimize or improve in these areas will help increase production. Any increase in production equals moving more vehicles through the shop today, tomorrow, etc. Moving more vehicles through the shop will have a positive effect on your customers, staff, and the bottom line of your store. Listed below are quite a few of the more common roadblocks and potential solutions. In many cases, your employees are the best resource to identify and ultimately help minimize roadblocks. Please note, state and local labor laws may also affect how a dealership can approach several of these situations. Always recommend a dealership to consult with their labor attorney if there are questions. 1. Tardiness: As simple as this sounds, the ability of all scheduled technicians to be available to work on time is a very common concern. Being on time for work means arriving at a time that will allow the tech to be in uniform, get that first cup of coffee, have his / her toolbox open, and ready to take the first job given at the assigned start time. As a manager, you, or a responsible delegate, should be present when technicians are arriving for work in the morning. Ensure that they are punched in and ready for their first job by the scheduled start time. If your team holds morning production meetings, the respective group leader could help ensure that the technicians are there and ready to work on time. Review your DMS time clock report daily to ensure your techs were punched on the clock prior to their scheduled start time. Per your dealership s policy manual, progressive disciplinary actions are a last option, for those technicians that are continuously tardy.

20 20 PRODUCTION ROADBLOCKS 2. Leaving Early Leaving early means stopping production before the end of a scheduled work period. In many dealerships, technicians leaving early happens even more often than a late start to the day. It is not uncommon for the last 30 minutes or more of a work day to be that clean up the last job, hope they don t try to give me another job, I m ready to go home time. Make sure the technicians have something to work on at the end of the day (e.g., PDI, used car inspection, a last minute tow-in). In the afternoon have the group leader, dispatcher, service consultant, or service manager check on work flow in the shop. The goal is to stay ahead of anyone running low on work and find them something to do. Create and document a policy that states if there is any reason for a technician to leave before their scheduled time, they must check with service manager first. Allow technicians to work towards completing online training modules in this free time as directed by management. 3. Extended lunch period In some dealerships, all technicians leave for lunch at the same time. In those cases, it s easy to see who hasn t returned from lunch on time. However, in many other cases technicians stagger their lunch periods to better accommodate the customer s needs. The challenge from a managerial standpoint is you don t know who is supposed to be there or who is still at lunch. All technicians must have a scheduled lunch period. Regardless of who is dispatching the repair orders service advisor, group leader, dispatcher, or manager they must know what techs are supposed to be there in order to properly dispatch the work. Schedule a hand-off during lunch periods. Technician A returns from lunch and informs Technician B he has returned. Now Technician B can leave for lunch. If Technician A extends his lunch and is late, guess who is going to let him know that is not acceptable? Now lunch periods become self-managed by the technicians. Require technicians to punch in and out for lunch periods. This is important to help manage the time away from work which directly impacts the customer s vehicles to be worked on that day. In some states, workman s comp claims are based on hours physically at the dealership. If any employee doesn t punch properly for lunch periods, it could end up increasing the expense of a workman s comp claim.

21 21 PRODUCTION ROADBLOCKS 4. Tool truck This one can get a little tricky they are necessary, but are more often than not a disruption to your dealership s business. The challenge is that most dealerships have Snap-On, MAC, Matco and a few more tool vendors that stop in and walk around the shop talking to the techs. They do more bill collecting and soliciting new tool sales than really helping the technicians. What they really do is halt production in your shop! Meet with each vendor and set an agreed upon time and day that they can visit the dealership. Many will set the time over a lunch period or end of day. Obtain a tool vendor franchise and sell the tools directly from the parts department. Remind tool vendors they are not allowed in the shop due to insurance company stipulations that no non-employees are allowed in the service department. Put a link on technician computers to place orders directly to the tool vendor. Tools can be either delivered or shipped to the dealership. 5. Food Trucks You may have heard the term roach coach to describe the food trucks that visit many dealerships. It is not unusual to see employees from all departments standing around in the shop waiting for something. When you ask them what they are waiting for, the response is the roach coach. So, not only does this stop production for the technicians, but you will also see service advisors, parts employees, body shop technicians, sales, and office staff waiting around. This is a huge drain on technician production and daily dealer activities. What starts as a lunch truck often times turns into a breakfast, morning break, lunch, and afternoon break truck not to mention, not always full of healthy options. Look for alternatives for the food truck. There are good vending machine companies in most markets, from the simple snack machines to ones with sandwiches and hot meals. Most will supply the machines as long as they are used. Eliminate the food truck or greatly reduce their time (when and how long) on site. Give them a notice that within the next 30 days the dealership will no longer need their services or when the new restrictions start. Offer healthy options in vending machines. Many employees are working hard at taking better care of themselves. Having these options available at your dealership, many won t even need to leave for lunch. 6. Smoke Breaks Most dealers have a no smoking policy within your dealership. Some have even gone to a no smoking campus rule where no employees or customers can smoke anywhere on the property. This has created a new challenge of employees leaving work throughout the day to smoke. Dealership offering smoking cessation programs paid for by the employer. Dealership offering a cash incentive once the employee has been smoke-free for a specific time period 6 months or a year. Offer discounts on insurance premiums for being a non-smoker. Insurance premium surcharge for those that do smoke.

22 22 PRODUCTION ROADBLOCKS 7. Waiting for Parts Some technicians become so frustrated with their lost time waiting for parts that they start to punch in/out for the time spent waiting at the counter. While that doesn t solve their roadblock, it may get the attention of the management team when everyone realizes the amount of time spent at the back parts counter. Set up your DMS to print a plain copy of each repair order as it s written. This copy is printed in parts and used to pre-pull and bill maintenance, campaign/recall, or special order parts. Deliver parts to a technician s stall whenever possible. Tie your Parts Dept. team s pay (or put a bonus in place) for parts counter personnel based on hours produced in the shop. Utilize a Service Price Guide in your DMS (or wiadvisor) that not only shows parts and labor pricing, but part number and availability. Techs won t even need to go to the parts counter trying to determine if the part is available. Utilize , instant message, text message, DMS, or other electronic means to communicate with your parts without going to (or spending excess time at) the counter. Locate a parts team member in the shop with a workstation and some fast moving parts. 8. Waiting for dispatch of RO s If your technicians start work at 8:00 AM, what time do they actually get their first RO to work on? Many technicians waste or more minutes each morning waiting and even more time throughout the day waiting for their next RO. There are many things that can contribute to this and it will vary greatly between dealerships. Preload the shop with some quick and easy jobs, such as PDI s or used car inspections. Use a repair order rack that has available work in the order it needs to be completed. If a tech is out of work, and the person that dispatches work is busy, a tech waiting for work can just take the next RO. Utilize your DMS electronic dispatch system (if applicable) to quickly get to the next available RO. Document a process that states exactly the steps techs should take if they are out of work and waiting for their next RO.

23 23 PRODUCTION ROADBLOCKS 9. Locating Special Tools If you haven t done this recently, find where your special tools are located. Once you see how they are organized, you may wonder how much time is wasted by each tech attempting to locate that special tool. Some techs can be wasting countless hours per day, week, month, etc. looking for special tools. Use the Mopar Tool Organizer program (DealerCONNECT Service Tab) to document the location and condition of your tools Use an Excel-style spreadsheet to record each tool number, description, location, and condition. Any tools missing or damaged should be replaced as authorized by you as management. Locate special tools in the parts department. Put them in the DMS with a bin location. Bill on the repair order when given to the technician. When the tool is returned, it is removed from the repair order. When a technician removes a special tool from its location, tech places a poker chip with his tech number on the hook or bin where the tool was. If another tech is looking for the same tool, he knows who had it last. Limit access to special tools via keypad with individual entry codes or a separate key. 10. Road Tests There is a time and a place for road tests. The key point is to not waste valuable production time on unnecessary test drives. Some dealerships have a policy that the technician performing the repairs completes a road test after every repair. This may not be the best use of your technician s time. If your dealership does not have a written Road Test policy, you should create one with your technicians inputs. Certain repairs have a higher chance of returning unrepaired: squeaks and rattles, noises, hesitation, shifting concerns. Encourage the customer to accompany the technician on the road test to verify the condition. Document a test drive route that all technicians use. In many cases all technicians do not go on the same route and may spend more time than needed on a test drive. On a very intermittent concern, utilize a non-productive person to put the miles on the vehicle. Some dealers use a porter, detailer, service consultant, or salesperson to assist in these cases.

24 PRODUCTION ROADBLOCKS 11. Obtaining Technical Service Information (TechCONNECT) Due to the nature of today s vehicles, your technicians more often than not need to refer to TechCONNECT and utilize witech for diagnostics. This can create a challenge in many dealerships that have a shortage of computers that the techs can access. Review your technician:computer ratio in the shop. While there is not a required ratio to be met, many dealers are moving to one computer for each tech. Test internet speed on each computer. DealerCONNECT (and internal links), along with witech and StarParts performance can vary greatly depending on not only the age of your PC, but how it was configured at time of purchase. If all computers are wireless, run a free speed test using one of the many that are out there, such as Or consult with a company such as Telegration their contact info can be found on the home page of DealerCONNECT. Ensure that nobody in the dealership is streaming music or video, slowing down everyone s access. 12. Cell Phone Usage According to recent research, 64% of Americans, up from 35% in the spring of 2011, own a smart phone of some kind. While cell phone overuse can hurt production, it can also be a safety concern in the service department when team members are not paying attention to their surroundings. Other dealerships have actually used them to benefit production and increase communication. Have a written cell phone policy that is understood by all. Some dealerships ban the use of cell phones in the shop. They must be left in car or in toolbox. Ensure there is a policy in place that no technician can be talking on his or her phone while working on a vehicle for obvious safety concerns. Use of phone for texting between service consultants or parts department can speed up communications. Use of phone for taking pictures of components on vehicles can assist in getting the right part as well as sell the additional work. 13. Locating Vehicles on the Lot When your technicians are paid for the hours produced, not being able to find the vehicle to work on can be a major source of frustration for them. To add to that frustration, every minute they spend locating vehicles is costing not only them, but your dealership time and money as well. The use of a key tag that matches a hang tag on the rear view mirror seems basic, but some dealerships still don t use them. Magnetic hats that are set on the roof of vehicles can be color-coded or numbered to represent waiters, service advisors, teams, technician assigned, No Start, etc. Number the parking stalls in service, and write that number on the key tag when parked. Make a map of the parking lot, and identify each row with a letter or number, north/south, etc. Then put the location on the key tag, or on the repair order. Utilize porters to move cars in and out of shop. 24

25 25 PRODUCTION ROADBLOCKS 14. Additional Work Approval Time Once a vehicle is diagnosed, your service advisor s next step is to get the approval for repair. Not getting the approval as quickly as needed, can cost technicians valuable time. If your tech doesn t have an extra stall, he / she will need to pull that vehicle outside, park it, and go get another job to work on. Service Advisor is to verify at time of write-up, the best number to reach the customer at TODAY not just a home number. For customers that have been coming to your dealership for years, ask them for a preapproval amount. Example: Mr. Customer, I know you said you ll be in meetings all day and difficult to reach. To ensure we can complete the repairs today, could I get your pre-approval for the repair if the job is less than $500? Have a written back-up plan for those times a Service Advisor is busy and cannot call i.e. another advisor or manager calls. Ask the customer if he or she would like you to text or the estimate. Companies such as Text2Drive, MPI, My Kaarma (and in some cases your DMS provider) offer these types of communication features that can link into your DMS system (or work right from your DMS). 15. Poor Repair Order Write-Up One simple phrase can explain this to both service advisors and technicians: A properly written repair order should require no explanation to the technician. If it requires explanation, then there were not enough open-ended questions asked at the time of writeup. Perhaps it may be a good time for a road test with the customer and a tech, manager, service consultant, shop foreman or someone else. Or it may be a good time to go back to the basics on customer write up processes. Service manager to review previous day s repair orders for a proper write-up. Listen to service consultant s interaction with customers at the time of write-up are they asking the right questions? Are they doing a proper walk-around? Develop a policy regarding proper repair order write-up. Mr. Technician, if you don t know what you are trying to repair, go see your service consultant. During an appointment reminder call, review the concerns word for word as recorded in the DMS system. If the story isn t clear, it can be updated prior to the customer s arrival.

26 PRODUCTION ROADBLOCKS 15. Customer Assistance Have you ever heard the phrase being a victim of your own knowledge? This often times can happen to your technicians when it comes to the many questions he or she is asked. These questions can come from Service Advisors, parts personnel, wholesale accounts, IRF s, collision centers, sales people, etc. You as management should define the level of assistance expected from the technicians for non-productive time. Then clearly communicate this with the entire staff. Technicians should not be pulled from the customer s vehicle they are repairing to get on the phone with a technician from an IRF. If the IRF needs the dealership s assistance, maybe the car should be at the dealership with a factory-trained technician. All dealership employees must be up-to-date on their training to ensure the understanding of the technical features of today s vehicles. Give the service and parts team a word track to politely say no to those customers that want to talk to one of the technicians. Ask yourself, Can I just walk into a Dr. s office and tell them I ve got a couple questions and want to talk to a doctor? 17. Assisting Other Technicians As stated earlier, senior technicians can become a victim of their own knowledge. Within the shop they can become a crutch to techs that find it easier to ask another tech for assistance rather than diagnosing the vehicle. Unfortunately, this can cause one technician lost production, and the other technician doesn t grow his / her skill set. Encourage technicians to assist each other when it s truly just the need of another set of hands. Develop an understanding in the shop that if a technician needs to assist in the diagnosis and/or repair for more than a few minutes the time paid for the job will be shared. Establish a repair process that requires the condition be verified, relevant TSBs / SOL Cases are searched for repair procedures, and campaigns/recalls are checked prior to asking another technician for assistance. You or your Service Manager need to watch flag times to see if there is a pattern of certain technicians needing more assistance than others there may be a training need. 18. Playing on the Computer When Facebook started to become popular in 07-08, many dealerships were concerned with their employees computer access at work. It wasn t unusual to see many sites blocked by the dealership s firewall security. The key now is to ensure the technicians are given the tools they need to be productive, and not restrict them to the point they cannot access the sites they need to repair vehicles. Manage By Walking Around (MBWA). There can be nothing better than management walking through the shop seeing how the techs are doing and to see what else they may be doing. That s when a game of solitaire or buying/selling on Craigslist may be seen. Limit access to any streaming media such as Pandora, YouTube, Netflix, Hulu, etc. These sites can slow the entire dealership s network down. Create a computer usage policy on what is acceptable and what is not. This should include technician s personal computers as well. Educate the employees on how unauthorized streaming sites affect the rest of the dealership. 26

27 Service Capacity Guidebook CUSTOMER SCHEDULING Understand and implementing a system for scheduling based on daily available production capacity

28 28 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES Introduction How to properly dispatch work to technicians has been an ongoing point of contention within automobile dealerships and repair facilities for years. Everyone feels that their method of scheduling service appointments and assigning work to technicians is the best, generally because it s the the way we have always done it.. There are many different options to handle both the techniques are not a one size fits all process. The important point to remember is that just because it s the way we ve always done it, doesn t mean it s the way it needs to remain. Technician production is highly influenced by the manner in which work is assigned or dispatched which in turn is driven by how customers are scheduled for service. While other factors contribute to the production (training, tools, down time, quality of ROs etc.), our focus will be on customer scheduling and the subsequent dispatch processes. Work cannot be dispatched to the technician until the repair order is written and that cannot happen until a customer brings a vehicle into the service department. There was a time, and frankly this still occurs to this day, when appointments for service were not taken. Customers were told and trained to bring in their vehicles in the morning to hopefully get them back by evening. Appointments were only made to see the doctor or dentist, not to get your vehicle serviced. In this environment, ultimately what would happen is 30 minutes prior to the dealership start of business, the line of vehicles would begin to form outside, sometimes a few vehicles or a couple dozen would be waiting for the doors to open. The Service Advisors would then sneak in the back door, grab a cup of coffee and a donut, and then open the doors at precisely 7:00 a.m., or whenever they started for the day no earlier. Then, for the next three hours, the advisor would do nothing but write repair orders and send the vehicles into the big, black hole that was the service department, hoping they would miraculously pop out the other end at the end of the day. There was (and in most cases still) no plan. There cannot be a plan without an appointment or scheduling system, as there is no way to understand what the workload is, or for that matter, what type of work is coming through the door. How are the service advisors (or BDC, etc.) to know when there is enough work to maximize the shop s capacity? It is like having a party but not sending out invitations, with no idea of who is coming or what they are bringing. Before any appointment process can be put into place and be successful, shop capacity must be determined click here (or turn to Pgs ) to review that section again. Dealership management, especially the Service Manager, needs to know, on any given day and at any given time, what the shop s capacity is in flat rate hours.

29 29 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES Introduction Cont. If you recall, the first step in determining capacity is to determine how many flat rate hours, per day, EACH technician is capable of producing. To do this, the Service Manager would need historical data as to each technician s flat rate hour production, preferably over a minimum of 12 weeks. This information is readily available in all Dealer Management Systems. When compiling this data, the Service Manager must use a sufficient time frame to factor out as much seasonality as possible. No less than 10 weeks of production data should be used. Preferably, 6 to 12 months would provide a more accurate picture of each technician s ability. Once the flat rate hour capacity is determined, the Service Manager can then begin to put in place an appointment scheduling system. Appointments can be made according to shop availability as it relates to flat rate hours.

30 30 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES SCHEDULING There are quite a few ways to schedule work into the shop. Some require quite a bit of technical expertise, some not as much, and others only the ability to count cars. Regardless of the scheduling technique used, they all require an understanding and real time knowledge of your shop s capacity. You need to be careful about not taking in more than can be handled on any given day or taking in too few cars and having technicians standing around or worse, going home early. Let s take a look at scheduling work into our 10 technician main shop. To make this easy, we will assume all of our technicians have a Flat Rate Production Objective of 9.9 Hours each. If you recall, we set a production objective improvement of 10% or.9 hours additional per day per tech. Flat Rate Hours Available with Production Objectives Avg. FRHs per Tech per Day # of Techs = Hours Available to Schedule per Day = 99.9 (100) As you can see, we have 100 hours of work to produce each day. You need to remember that these hours available can change daily given variances in technician production, skill level, vacation, sick days, carry overs, etc. These reasons are why it is so important to track daily hours available and what was scheduled against those hours. Now that we know how many hours we have to sell, let s look at how we track and schedule appointments around those hours using two of the most common scheduling methods.

31 31 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES SCHEDULING Counting Vehicles This method is the easiest, but not the most effective method of ensuring maximum scheduling and FRH production. No technical experience is necessary on the part of the appointment taker. In order to schedule in this manner, the service advisors, scheduler or Business Development Center (BDC), or whoever is taking the appointments, needs to know what the daily shop capacity is as it relates to vehicles driving into your service lane. In order to determine that, management would calculate the total shop average hours per repair order. That number divided into the Hours Available to Schedule per Day will give the number of vehicles that can be scheduled on any given day. A best practice, would be to only schedule 70-80% of the total RO capacity. This would allow for additional service requests, walk ins, emergencies and FOB s (friends of the boss). Once the designated number of vehicles was scheduled for that day, the scheduled would simply move to the next day. The calculation would look like this: Daily Flat Rate Hours Available Current Hours per RO = Maximum Customers to Schedule per Day 99.9 (or 100) 2.0 = 50 Remember, 50 is the maximum number of customers we can schedule given we have no carry overs, walk ins, additional service requests, etc. We will now account for scheduling our shop to 80% of capacity: Maximum Customers to Schedule per Day x % of Capacity to Schedule = Adjusted # of Customers to Schedule per Day 50 x 80% = 40 This is a great method for a dealership that does not currently have a robust scheduling process. The calculation would have to be made on a daily basis to account for technician availability and carry overs.

32 32 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES SCHEDULING Counting Vehicles cont. Because there is no way to determine at the time the appointment is scheduled to determine exactly how many hours the vehicle will require (remember our average is 2.0 hours, so some vehicles are more hours and some less), there may be some extreme fluctuations in the workload from day to day. For example, one day may have a high number of oil changes, causing the shop to run low on work. Another day may have too many large, more difficult jobs, causing an overload of work and carryovers, which would affect the next day s schedule. This is why it s necessary to have open and consistent communication to inform the appointment setting personnel whether they should increase the number of appointments or shut them off. Benefits: Easy method to learn Great for a dealer that does not currently use a method of scheduling driven by hours Requires no technical experience on the part of the scheduler Potential Areas of Concern: Can lead to under producing hours, since too many small repairs could be scheduled Can lead to large carry overs, since too many large jobs could be scheduled in a day, affecting the next day's schedule

33 33 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES SCHEDULING Inventory or Hours Bank If you ask most any one in the service department what they sell, the resounding answer is usually time. However, most service departments do not set their customer scheduling on the product they have to sell. The method of scheduling based on an hours bank is similar to counting cars with the exception that you are more finite or controlled in estimating the time required to complete the intended service(s). It still requires you to know how many Flat Rate Hours are available to create an hour bank. This process, while far more accurate than counting cars, would require a bit of technical expertise, or at least some set up or guide, in order to provide the appointment scheduling personnel (Service Advisors, Scheduler or BDC) with some knowledge as to how many flat rate hours specific repairs or maintenance services will require. Some of the initial setup requires building a grid with your most common LOPs and the associated FRH for each one. A good place to start would be services you sell most often this could include bundle packages such as maintenance packages. These hours would then be subtracted from the hour bank. When the hour bank hits zero, the appointments start being scheduled into the next day. A best practice, similar to the counting cars method, would be to only schedule 70-80% of the total hours bank. As with the car counting method, it allows for additional service requests, walk ins, emergencies, etc. Below is an example of labor hours grid: Service / Labor Op Time (Hours) Service / Labor Op Time (Hours) Oil Change (LOF).5 10K Service.75 Tire Rotation.25 20K Service 1.0 LOF / Rotate.6 30K Service 1.5 Mount & Balance 1 Tire Mount & Balance 2 Tires Mount & Balance 4 Tires.25.5 Front Brakes w/ Turning Rotors Front Brakes w/ Replacing Rotors Check Engine Light 1.0 Alignment 1.0 Battery Replacement.5

34 34 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES SCHEDULING Inventory or Hours Bank cont. Now that we have our labor grid created, let's look at how we schedule customers. OR sell our inventory - remember, we have 100 Flat Rate Hours available every day. We decide we want to set the schedule to 70% to allow for walk-ins, additional services, etc. Total FRHs Available per Day x % of Capacity to Schedule = Adjusted FRHs to Schedule per Day 100 x 70% = 70 We know now that we need to schedule our shop to 70% of capacity, time to sell inventory. Below is an example of a manual schedule grid that can be used to sell our inventory. Customer Condition Miles Possible Service Estimated Time (from Labor Grid) Inventory (Starting at 70.0) Vehicle pulls on road 22,100 Alignment Brake Pulsation & LOF 18,500 Front Brakes (Turn Rotors) & 20K Check Engine Light 55,000 Diagnostics st Maintenance 7,400 10K Hit pot hole and 1 tire blow out 14,000 Mount & Balance 1 Tire and Alignment In this scenario, we still have 63 FRH to schedule for the day. If we were to compare this to our Counting Cars an overall hours per RO average of 2.0, we would have 3 less hours available to schedule, so as you can see, selling from an inventory bank is a much more accurate scheduling method. Benefits: Accurate method of ensuring maximum customer scheduling to available FRHs Allows for easier scheduling of New Vehicle Prep, Used Car Recon, and carry overs Accounts for fluctuations for available hours. IE, you did not over or under schedule oil changes or more difficult jobs like swapping a transmission Potential Areas of Concern: Scheduling team needs to have some basic technical knowledge to properly assess customer needs Can lead to diagnosis on the phone or service drive

35 35 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES SCHEDULING Inventory or Hours Bank to Specific Technicians An enhancement to the Inventory or Hours Bank is to schedule according to a technicians skills and availability. This method requires the scheduler to have above average technical experience. The person making the appointment would need to have a pretty comprehensive understanding of what the customer is saying they believe is wrong with their vehicle and then scheduling that vehicle to the appropriate technician. A similar Flat Rate Hour bank would be utilized, as in the previous example, only the bank would be the flat rate hour capacity for that specific technician. This technique can create many issues in backlogging specific technicians while targeting work for technicians not trained in certain disciplines. It may promote diagnosing over the phone or on the service drive, which can lead to misdiagnosis, lower customer satisfaction and diminished shop production. Benefits: Extremely accurate method of ensuring maximum customer scheduling to available FRHs Can ensure maximum technician production by scheduling to their technical strengths Potential Areas of Concern to Inventory Bank to Specific Technicians: Scheduling team needs to have above average technical knowledge to properly assess customer needs One small job can turn in to a larger one, leading to increased carryovers and customer delays One large job can actually be a small one, leading to less technician production for a specific day May promote diagnosing over the phone or on the service drive, leading to lower Service Advocacy and FFV, ultimately impacting overall shop production

36 Service Capacity Guidebook DISPATCH METHODS Review basic shop structures, repair order dispatch, and what happens as the shop grows in size

37 37 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Once a system has been put into place to adequately schedule work for the shop, a process needs to be put into place to dispatch the work out to the technicians in the shop. Just like scheduling, dispatch can be performed in a number of different ways. Three things that ALWAYS need to be taken into account when dispatching work are: 1. Dispatch towards technician skill level 2. Dispatch towards technician production objectives 3. Dispatch towards promise times These three areas need to be considered and adhered to with every vehicle that is dispatched into the shop, with the ultimate goal of satisfying and exceeding the customers expectations. Believe it or not, one such way to dispatch work is to put all the repair orders in a pile and let the technicians pick the ones they want to work on. Seriously, this does happen. The good work gets cherry picked and the not so good work sits. Customer satisfaction is poor and Fixed Right the First Time scores suffer. Service Returns, or Comebacks, are high due to technicians working on issues that they were never trained in. They only got the job because that was all that was left. Overall shop production suffers, with technicians refusing to take certain jobs and those that take them are generally not proficient in those areas, increasing the time needed to complete the service. Employee morale is generally low, as can be the trust the employees have in the management team. When dispatching, or distributing work in this manner, there is no focus on production or production objectives. The service advisors have no idea of shop capacity at any given time. Promise times cannot be given to the customer because there is no control of the workflow. Work is not dispatched towards skill level. And at the end of the day, the customer is the one who suffers the most. This type of dispatch generally occurs in a shop where no organizational structure exists, amplifying the situation. Unfortunately, the above scenario may sound like your shop on some days. In the coming pages, we will visit methods of dispatch such as, Service Manager/Advisor, Central, and Advanced Production Systems, and the pros/cons of each.

38 38 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Management/Advisor Dispatch In smaller service departments where there are only three to five technicians, it is not uncommon for the Service Manager to perform the dispatch duties. In this type of structure, the dispatcher is fully aware of the technician s abilities, the time needed and available to complete the repairs and maintenance, and the capacity of the shop itself allowing for accurate promise times. Dispatching in this environment could be considered the most efficient structure in terms of communication and dispatch. The Service Manager assists in writing the repair orders and dispatches the work and because it s a smaller shop, everyone knows each other, they have common interests and are fully aware of each other s capabilities. Due to the high level of communication in this structure, promise times can be met and customers are generally well informed as to the progress of their vehicle. The Service Manager is the go-to guy of the service department, having intimate knowledge of the progress of all the vehicles in the shop. In this dispatch structure, customer satisfaction is generally high, as is production and employee satisfaction. Communication within the shop as well as with the customer is excellent. SERVICE MANAGER SIMPLE ORGANIZATION

39 39 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Management/Advisor Dispatch As the department grows, the Service Manager s increased workload may prevent him from properly managing the business as it relates to growth and profitability. At this point, the Service Manager is not allotted the time to properly manage the department s expenses, and profitability may suffer. Plus, there is no one to take over the dispatch duties when the Service Manager is not in the shop. If one of the technicians is given the job of dispatcher, it can lead to fairness issues and problems with time commitment and communication with the customer and technical staff. As business grows within this structure, it becomes more difficult for the Service Manager to effectively run his department. Benefits: Excellent communication Everyone knows each other s capabilities Service Manager is aware of daily shop production hours and customer promise times High(er) Customer Advocacy scores Potential Areas of Concern: Daily workload may prohibit growing the business and profitability Shop production, customer and technician communication can be negatively impacted in the absence of the service manager

40 40 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Management/Advisor Dispatch Eventually, the Service Manager finds that he is overworked and that dispatching and writing repair orders is taking away from his main duties of growing the business and remaining profitable. This is when adding a Service Advisor would give the Service Manager some additional time to grow and manage the business, while still allowing him to be active in the day-to-day activities. It may be time to bring in a Service Advisor when the service department has four to six technicians. Like in the previous example, the technicians and the manager are close and know each other s abilities. The Service Manager and Service Advisor have a very good view of the daily capacity and can properly manage production. Communication is still very good at this point and it s easier to schedule work, provide promise times and follow up with the customers. In this example, however, the Service Manager is still dispatching work along with the Service Advisor. He is also still involved in the day-to-day activities that can prevent him from performing the tasks and duties necessary to grow his department. The Service Advisor, being the subordinate, may be the one whose repair orders do not get completed, leaving him with the carryovers. This may cause some issues between the Service Manager and Service Advisor. Having two people writing both repair orders and dispatching the work to the technicians can begin to cause some confusion and technician downtime. SERVICE MANAGER SERVICE ADVISOR While still manageable, you can see that the lines of communication are becoming more difficult to make sure everyone clearly understands the daily shop production, and customer promise times. It may seem as if everything is going well, because shop revenue continues to grow and customers are for the most part, satisfied.

41 41 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Management/Advisor Dispatch As the business grows, the department may add another Service Advisor. With two Service Advisors and one Service Manager generating repair orders and dispatching the work, the lines of dispatch may become even less clear. Communication between the Service Advisors and the Service Manager can deteriorate, causing technician downtime and decreased production. Promise times become harder to make and keep because the Service Advisors and Service Manager can easily lose sight of the shop s production capacity. In this instance, there may be seven to 10 technicians and the shop may not be as cohesive as in previous examples. SERVICE ADVISOR SERVICE ADVISOR SERVICE MANAGER At this point, the daily needs of the shop are difficult to manage. More often than not, the service manager is putting out fires daily and is being pulled in multiple directions to handle customer concerns, employees calling in sick, growing the business, etc.

42 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Management/Advisor Dispatch Two Step Dispatch In some instances, the service manager may create a two-step dispatch system, taking sole possession of the dispatch process. In doing so, the Service Manager is dispatching the advisors repair orders as well as his own. Shop production can suffer in this structure. The manager cannot dedicate himself fully to the process due to too many other duties to attend to. This leaves technicians waiting too long for their next job, creating down time. Service Manager Two Step Dispatch SERVICE ADVISOR SERVICE ADVISOR SERVICE MANAGER Eventually, the Service Manager takes themselves out of the dispatch and repair order writing process altogether. The tasks associated with the management position do not allow for continued involvement in the write up and dispatch processes. This will generally occur when there are 3 or more service advisors and ten to fifteen technicians. The service advisors write the repair orders and dispatch the work into the shop. The Service Manager designates one service advisor to oversee the dispatch process, similar to the two step approach. In some instances, this can create a situation where the advisors do not work together, but rather against each other, trying to get their own work done. There also tends to be favoritism in dispatch. Technician production suffers, with technicians getting pulled off one advisors job to work on another. The shop tends to become specialized, with technicians only working on specific repairs. This causes the vehicle to be moved to different technicians for different repairs or services, creating Multiples of 42

43 43 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Management/Advisor Dispatch Eventually, the Service Manager takes themselves out of the dispatch and repair order writing process altogether. The tasks associated with the management position do not allow for continued involvement in the write up and dispatch processes. This will generally occur when there are 3 or more service advisors and ten to fifteen technicians. The service advisors write the repair orders and dispatch the work into the shop. The Service Manager designates one service advisor to oversee the dispatch process, similar to the two step approach. In some instances, this can create a situation where the advisors do not work together, but rather against each other, trying to get their own work done. There also tends to be favoritism in dispatch. Technician production suffers, with technicians getting pulled off one advisors job to work on another. Service Advisor Two Step Dispatch SERVICE MANAGER SERVICE ADVISOR SERVICE ADVISOR SERVICE ADVISOR

44 44 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Multiples of Movement Once a shop reaches this size, and follows any one of these dispatch methods, they tends to become specialized, with technicians only working on specific repairs. This causes the vehicle to be moved to different technicians for different repairs or services, creating Multiples of Movement. Having to move the vehicles to multiple techs for a variety of repairs, slows down the repair process, creating technician down time and decreasing production Parts Oil Change Check Engine Light Brakes Light Bulb 1 Write Up Parking

45 45 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Central Dispatch At some point through the growth of the department, the Service Manager may bring someone in to play the dispatcher. By now, the Service Manager has decided that the business has grown enough and the Service Advisors need assistance in dispatching the work. The Service Manager also needs a way to minimize the complaints of fairness coming from the technicians and the Service Advisors regarding the manner in which work is being distributed. Someone is needed to help take control of the chaos -- enter the Dispatcher. The Dispatcher s main job function, from the viewpoint of the Service Manager, is to fairly distribute the work, manage the workflow and meet the promise times. The job function from the Dispatcher s point of view is to get rid of all the repair orders by the end of the day. Period. What generally ends up happening is that the Service Advisors do not provide promise times to the customers, having no vision as to the shop capacity, so most promise times are set for the end of the day. That means additional jobs from vehicle inspections aren t offered to the customer because the Service Advisor doesn t know how much longer the additional work will take. A shop with Centralized Dispatch is generally very specialized, creating multiples of movement that add to the Dispatcher s duties, and subsequently their stress level creating a high turnover rate. Production also suffers due to technician downtime as he waits on the Dispatcher to provide him with the next job. Centralized Dispatch can also be done electronically eliminating the need for a Dispatcher. In most DMS, there are programs that can be utilized to automatically dispatch work based on technician skill level and availability. These systems work well to an extent. It takes a lot of work to set up the system: technician skills need to be entered and there is job coding and job duration, etc. If the system is allowed to function on its own, it assigns the first available technician for the next job, but that could lead to technicians being skipped depending on what skill level was entered into the system. The Service Manager is usually given the ability to override the system to give technicians work. That ability is generally given only to a manager to reduce the risk of manipulation. If the technicians have override capability, they could override the job given to them to find something else they would prefer. But even without the override, the technician can manipulate the system by putting jobs on wait status, which will then allow them to request another job. It seems, more often than not, a dealership in Centralized Electronic Dispatch, still has to have someone in the Dispatcher position to manage the electronic system.

46 46 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Central Dispatch Manual Electronic One things you may notice is that the central dispatch structure tends to look like an hours glass, with a restriction in the middle (dispatcher). Managed properly, Centralized Dispatch, manual or electronic, can assist in increasing production. It is important to remember that in manual dispatch the Dispatcher should not be overwhelmed by the number of technicians and that he can only manage a certain number of people effectively. Too many and the Dispatcher will be found curled up in the corner in a fetal position one day. The Dispatcher can add a human element to the dispatch and assist technicians in meeting any production objectives they may have, but this doesn t happen as often as it could. Centralized Dispatch can also create favoritism. Certain technicians, who are friendly with the Dispatcher, may get the better jobs. These techs tends to generate a lot of hours in a day while other techs who are not favorites produce less. Heavy oversight is required to ensure that what comes in (hours) equals what goes out. ADVISORS DISPATCHER S

47 47 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Management/Advisor Dispatch There are several pros and cons to Centralized Dispatch; the first pro being that Centralized Dispatch brings some sense of order to the dispatch process. In theory, there is a plan to disperse the work in a systematic, equivocal manner. All technicians are given work and an opportunity to earn a fair living. The Dispatcher has a clear vision as to the shop capacity and can alert the Service Advisors at any given time. They are able to advise when more work can be taken in and when the shop is full. One of the cons of Centralized Dispatch is that the Dispatcher has only one main goal: to get rid of all the repair orders on his desk. Anyhow, any way! This can lead to the wrong tech getting the wrong job or good techs getting the hardest work and weaker techs getting the easier maintenance jobs. Quality control may also become an issue. In Centralized Dispatch, Service Advisors don t commit to promise time with the customers because they have no idea about the shop s capacity or the dispatch order of the work. Work may be getting done, but from the customer s viewpoint, his vehicle falls into a big, black hole, hopefully to be spit out at the end of the day. Customer satisfaction and employee satisfaction may suffer. Under Centralized Dispatch, departmental growth is minimized because a Dispatcher can only dispatch effectively to so many technicians. The increased stress level of the position may create excessive turnover causing production to be hampered while a new Dispatcher is trained. Benefits of Centralized Dispatch: Management control of dispatch through the dispatcher One person is in the know about what is going on It creates a feeling of fairness in work distribution The dispatched have a vision of capacity Areas of Concern with Centralized Dispatch: Reinforces the need to become specialized Service Advisors lose sight of capacity Service Advisors cannot control promise times All work is promised for end of day High levels of Multiples of Movement Technicians become victims of their knowledge Dispatch becomes unfair, causing technician complaints Rarely is work dispatched to skill level, promise time or objective Added expense of a nonproductive employee What comes in (Hours) do not always equal what goes out

48 48 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Management/Advisor Dispatch In summary, electronic and manual dispatch help to ensure the right jobs go to the right technicians helping to boost production, but because of the specializations associated with Centralized Dispatch, it can create Multiples of Movement, which have an adverse effect on production. Centralized Dispatch is beneficial in bringing order to a department that is stuck in a mid-sized shop scenario, in which the advisors and manager are heavily involved in dispatching, in addition to writing RO s, and providing customer service. Having one individual tracking the flow of work and ensuring that the right job is getting to the right person, can greatly enhance work quality. The Service Manager and Service Advisors have a central point of contact who knows where each repair order is and what the current shop capacity is. Unfortunately, the Service Advisors have no vision of capacity, and therefore rarely commit to the customers as to promise times. The responsibility of this is gladly relinquished to the Dispatcher from the Service Advisors. It is not uncommon to hear the Service Advisors say to the customer I will call you as soon as I know something or if you don t hear from me by this afternoon, give me a call. Without a clear vision, a promise cannot be made. Technicians in Centralized Dispatch may also become the victims of their own knowledge, with the technicians who possess greatest skills, who have the most training and who are the high producers getting the more difficult, low productive jobs, in order for the Dispatcher to meet a promise time. Centralized Dispatch can also hold back the growth of the department, limiting the department s ability to add technicians, knowing the Dispatcher can only handle so much. It may also prevent the department from moving into any type of alternative work schedules, needing multiple Dispatchers to accommodate the extended hours or additional days.

49 Service Capacity Guidebook ADVANCED PRODUCTION SYSTEMS Implement basic small shop structures, to increase tech production, improve communications and the customer experience Green Team Red Team Blue Team

50 50 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Dispatch in Advanced Production Systems Traditional dispatch systems, such as those previously discussed, have limits as to how much they can grow. Advanced Production Systems provide an opportunity to follow a revolutionary rather than an evolutionary path. In essence, they revert back to a simpler, easier to manage structure that accommodates growth, promotes communication, utilizes a more structured approach and provides high levels of accountability. Authority and accountability in an APS are based on the employee s role in the organizational structure. The Service Manager retains the overall authority within the department. The Service Advisor or Assistant Service Manager bears the responsibility of the service, sales and customer satisfaction. A designated technician has the responsibility of production management and quality control. In certain situations, production management and quality control may fall to the ASM. In the APS that will be mentioned in the upcoming text, smaller, well organized work units are used. Centralized Dispatch is no longer utilized, rather the dispatching functions become the responsibility of a designated technician or the ASM. Work dispatch in an APS can be performed by utilizing any of the methods discussed in the previous sections. One of the distinguishing factors in an APS is that, along with dispatching to promise times and skill levels, dispatch is also performed in a manner to achieve predetermined and agreed upon individual production objectives. Individual technician production objectives are a key element in APS. APS departments are structured in a way to mimic the smaller, cohesive work unit. The smaller unit with increased communication is managed by one or two Service Advisors. Basically, there are four types of APS; Simple Support, Lateral Support, True Teams and Super Groups. Due to the structure and varied skills of the members of the Production Group, Multiples of Movement are minimized and production is increased. Pros of Advanced Production Dispatch Mimics the Simple Organization Enhanced communication Advisor or Assistant Service Manager has clear vision of capacity Easier to manage and control It separates customer relations and sales from production and quality control Structure provides for growth Increases productivity It dispatches to promise time, skill level and objective Advisor or Assistant Service Manager can commit to promise times Fairness of dispatch

51 51 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Dispatch in Advanced Production Systems Pros of Advanced Production Dispatch Mimics the Simple Organization Enhanced communication Advisor or Assistant Service Manager has clear vision of capacity Easier to manage and control It separates customer relations and sales from production and quality control Structure provides for growth Increases productivity It dispatches to promise time, skill level and objective Advisor or Assistant Service Manager can commit to promise times Fairness of dispatch Cons of Advanced Production Dispatch It s unclear what happens to dispatch of work when group leader or Service Advisor is off Evenness of the skill level between groups Group Leader not dispatching fairly Consistency of production meetings Sharing or subletting work between groups Evenness of Service Advisor or Assistant Service Manager skill levels between groups

52 52 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Dispatch in Advanced Production Systems Simple Support Groups In Simple Support, the dispatching is performed by the Service Advisor, or Assistant Service Manager. The ASM generates the repair orders for a group of four to five technicians and then dispatches the repair orders to the appropriate technician in the group. The ASM in this structure generally has a technical background to assist in determining who will be the best tech for the job. As in other dispatch dynamics, the ASM will dispatch the work not only according to technician skill level and promise time, but also to the technician s individual production objective. The ASM can dispatch either manually as the Service Manager would in a Level One structure, or utilize an electronic dispatch system in the DMS, provided he has the override capabilities that were discussed earlier. The ASM, who acts as manager of the group, tracks the daily technician production, reviews the production performance and communicates the results to the group daily. The ASM takes responsibility for production, sales and customer satisfaction, leaving quality control to the individual technicians. Keeping the production objectives in sight, the ASM is able to dispatch the right work to the right technician, matching skill levels and meeting promise times while also assisting the technicians in their objectives. Because of the added focus on meeting the production objectives, production increases dramatically. Customer satisfaction and Fixed Right the First Time scores also improve. An area of concern in a Simple Support structure is that the ASM may try to diagnose a vehicle s issue over the phone or on the drive, creating a repair order that may lead the technician in the wrong direction, affecting production. Also, because of the ASM s elevated level of technical expertise, he may be difficult to replace.

53 53 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Dispatch in Advanced Production Systems Simple Support Dispatch SERVICE MANAGER SERVICE ADVISOR SERVICE ADVISOR SERVICE ADVISOR

54 54 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Dispatch in Advanced Production Systems Lateral Support Groups Dispatch in a Lateral Support structure is very similar to that in a Simple Support structure. But rather than the ASM performing the dispatch duties, work is dispatched by a Group Leader, who is a technician who has been chosen by his peers and approved by management to oversee the performance of a group of three to five technicians. This Group Leader, in conjunction with the ASM, manages the Lateral Support group. The ASM is responsible for the generation of the repair orders, service sales for the group and customer satisfaction. The Group Leader is responsible for the dispatch, production and quality control. Again, this structure, as in all Level Seven structures, share similarities with a Level One structure -- smaller, close knit groups with enhanced communication. As in Simple Support, all the technicians, including the group leader, have production objectives. Work is to be dispatched to the technicians based on three criteria: technician skill level, promise time and production objective. The technicians are better able to dispatch work to other technicians because they know their abilities, especially when they work close together. Dispatching in a Lateral Support structure, as in Simple Support, can be done manually by the Group Leader or electronically. If done electronically, all the repair orders for the group would need to be dispatched to the Group Leader. The Group Leader, having override capability, would then dispatch the work to the appropriate technician in the group. Because production is managed on a daily, weekly and monthly basis, all members of the group are aware of what the other members have produced and what they are expected to produce. Again, there is open communication, which helps to minimize the perception of favoritism. Everyone is treated fairly. Each group has a Lead Technician, who, in the absence of the Group Leader, would handle the duties of the Group Leader. The Lead Technician is a Group Leader in training. This structure, managed properly, creates a great pathway for growth. As the department grows, Lead Technicians are groomed to take over their own group when the need arises.

55 55 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Dispatch in Advanced Production Systems Lateral Support Dispatch SERVICE MANAGER ADVISOR TEAM LEADER ADVISOR TEAM LEADER ADVISOR TEAM LEADER LEAD LEAD LEAD APPRENTICE APPRENTICE APPRENTICE

56 56 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Dispatch in Advanced Production Systems True Team Groups True Teams are similar to Simple Support and Lateral Support structures, but a True Team shares, or pools, the flat rate hours that are produced within the team. Technicians are then paid based on productivity, contribution and hours worked. True Teams can be in a Simple Structure, where the ASM dispatches the work, or in a Lateral Structure, where the Team Leader dispatches the work. Dispatch, regardless whether it s electronic or manual, is done using the same criteria: promise time, technician skill and production objectives. True Teams, like all structures, aren t for everyone. In the right environment, they can work very well, increasing production and throughput. Express Service or a shop with high volume in a specialized area, such as Diesel Mechanical, can benefit from a True Team environment. But sometimes in this structure, technicians capable of high production may have a tendency to not produce to their ability due to the sharing of hours. Why should they work hard for someone else s paycheck? Conversely, weak technicians can hide, riding on the hours produced by the other technicians. ADVISOR ADVISOR TEAM LEADER Flat Rate Hours Pooled and Shared LEAD APPRENTICE

57 57 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Dispatch in Advanced Production Systems Super Groups Super Groups can be viewed as Simple, Lateral or True Team structures on steroids. The number of technicians in a Super Group is generally eight to 12 with two ASMs as opposed to the four to six technicians and one ASM found in the other APS structures. Dispatch in Super Groups can be performed electronically or manually, by the ASMs or the Group Leaders. The dispatch criteria stays the same, focusing on promise time, technician s skill levels and production objectives. Super Group: Simple Support Dispatch ASSISTANT SERVICE MANAGER Super Group: Lateral Support Dispatch ASSISTANT SERVICE MANAGER SERVICE ADVISOR SERVICE ADVISOR

58 58 CUSTOMER SCHEDULING & INCREASING PRODUCTION WITH DISPATCH TECHNIQUES DISPATCH Dispatch in Advanced Production Systems Dispatch with Alternative Work Schedules Centralized Dispatch, whether manual or electronic, in a nontraditional work schedule such a 4/10s or 3/12s can be difficult at best. Manually, it would be necessary for multiple dispatchers to cover the number of hours the department is open. This can cause challenges when vehicles carry over from one shift to the next. The transfer of information from one dispatcher to another would require an exceptional communication process. Multiple dispatches would be necessary adding to the departmental expense and, as mentioned earlier, unneeded turnover and training expense. Electronic Dispatch may work better, as long as there are appropriate individuals with the ability to override the system when needed and to manage the system to prevent technician manipulation. With either manual or electronic, production may suffer due to wait times for jobs, Multiples of Movement and decreased advisor performance. Advanced Production Systems adequately accommodate not only nontraditional work schedules but also departmental growth. Each structure, Simple Support, Lateral Support, True Teams and Super Groups all have their own Sales Manager, Dispatcher, Production Manager and quality control. Final Comments There is not a one size fits all when it comes to dispatching work within the service department. There are many factors that must be taken into consideration when determining the best method. A successful dispatch system must be partnered with a sound appointment process. Without the appointment process, a plan cannot be put into place as to how to dispatch the work to maximize the department s production capabilities. Regardless of the dispatch system, the methodology must include promise times to satisfy the needs of the customer. Technician skills must be considered to improve and maintain Fixed Right the First Time scores and drive customer retention. Production objectives must be an integral part of the dispatch to drive revenue and profitability. Shop structure, personnel and departmental assets must all be taken into consideration when determining which plan will work best and accomplish the needs of the business.

59 Service Capacity Guidebook EXTENDED HOURS Measuring, implementing, and increasing technician billable hours

60 INCREASED CLOCK HOURS AND EXTENDED HOURS If production improvement methods are not attainable and technicians are in short-supply, you should consider increasing the available man-hours. Open a half-hour earlier, or stay open a halfhour longer, reduce a 1- hour lunch break to a half-hour and maintain the current opening and closing times or do all three. These might not seem like very impactful moves, but they can contribute significantly to production capacity. Using this technique in a 10-technician shop can increase available time by 5, 10 or 15 hours per day or up to 75 hours per week. Benefits: Easier to implement Additional support staff not needed Immediate impact of additional production Employees can earn more money Help reduce backlog of appointments Potential Areas of Concern to Staggered Shifts: Employees unable or unwilling to work different hours If unable to keep technicians busy the entire day, additional hours could be viewed as unnecessary. Increase Clock Hours: Adding clock hours to the day is a very simple way to add production without adding expense. If you have already reviewed your carry over work from the previous day and found 4 vehicles that didn t get completed, this option may be for you. Many dealerships have posted hours of 7AM 6PM. The technician s hours are often 7AM 5PM, or some minor variation that get to the typical 8 hour work day after taking out the lunch period. If your technicians currently are scheduled for an hour lunch period, consider shortening it to 30 minutes. This is typically not a concern if most technicians stay at the dealership for lunch. The example below shows the additional production hours available by adding a either 1/2 or 1 hour to the typical day. In an 8 technician shop, adding an hour to the work day can have the similar effect of hiring another tech. Current Hours Add ½ Hour Add 1 Hour Time (Includes Lunch/Breaks) 8AM-5PM 7:30AM-5PM 7AM-5PM Daily Scheduled Hours Weekly Scheduled Hours Number of Techs Daily Hours Added Weekly Hours Added Annual Hours Added - 1,300 2,600 Assumes Stall-to-Tech Ratio of 1.5:1 60

61 61 INCREASED CLOCK HOURS AND EXTENDED HOURS Extended Hours We all understand the term retention and how important it is to the long term success in dealerships. Two main reasons dealership s don t retain customers is the perception of being highpriced and in some cases, the reality of not being convenient. Drive past your competitors on a week night or weekend and notice how busy they are not other dealerships, but your competitors for non-warranty work---pep Boy s, Goodyear, Discount Tire, etc. Will extended hours work for you? Many managers will say, We ve tried it before and it didn t work. In the cases it didn t work, it may have had more to do with a lack of focus on filling the schedule and communicating the new extended hours. Your employees need to understand the reason for the extended hours. If your employees don t want extended hours to work---they won t! Still not sure about extended hours? Some dealerships have gone to great lengths in determining what the customers in their market want. Some ask their customers about why they don t come back by sending out a survey. Using something like the example below, you can see firsthand the interest level in extending hours and perhaps learn from those who haven t returned for business. 1. Where do you go for maintenance service a. Another Dealer b. An Independent or Chain Service Provider c. I do it myself 2. Why do you not return to (Your Dealership Name) for maintenance service (circle all that apply) a. Service Hours are not convenient b. Takes too long c. Location is not convenient d. Prices are too high e. Personnel are too busy or non-caring f. Quality of workmanship 3. What is the likelihood of extended evening and/or weekend service hours improving your chances of returning to (Your Dealership Name) for maintenance service? a. Very Likely b. Likely c. Unlikely Depending on what you find in your market, you may decide to open every Saturday until 1pm and each Wednesday night until 8pm. After you determine what your new hours are, you will need to determine the proper staffing level. Most dealerships will rotate the employees to cover the additional hours. Within each dealership there are employees that simply cannot work hours beyond their current schedule. They may coach soccer, have to pick up their kids after school, car pool, and many other commitments. Ultimately, by discussing the business needs with your team, you will figure it out together.

62 Service Capacity Guidebook SATURDAY / SUNDAY HOURS Benefits and ROI on Saturday / Sunday Hours

63 63 SATURDAY / SUNDAY HOURS Half Days vs. Full Days: Like it or not, dealerships are a retail business. Retail is a 7 day a week business model. Due to the state laws not allowing the sale of vehicles every day of the week in most states, service departments have not been open 7 days either. However, there are certain markets where dealership service departments are now open Sunday. The majority of dealerships are open at least a half day Saturday, until noon or 1pm. The challenge at many dealerships is that due to the half day, employees are very cautious as to the types of work they schedule. The service consultants may be concerned with not being able to complete the repairs by noon. The result is a slimmed down schedule with some quick and easy work. Even if the technicians perform a great inspection and find additional work, the likelihood of getting the work sold and completed by noon is not good. So, in many cases, the technicians and service consultants stop trying to sell. See, I told you weekend s wouldn t work. Some managers are concerned with the additional personnel expense required to be open full days on Saturday and Sunday, and rightfully so. Each dealership s size and structure is different. Let s look at a typical crew for a Saturday / Sunday expense and what it will take to pay for it. Service Advisor Paid Salary Plus Commission Technician Paid Flat Rate for Hours Produced Hourly Daily Total Cashier $15 $60 Parts Counter $15 $60 Porter / Detail $10 $40 Additional Personnel Expense $160 In this example we will assume that the service consultant and technician(s) are paid for what they sell and/or produce. Therefore, no additional expense incurred. The additional hourly employees are what many dealerships Saturday structure could look like. The example above reflects an additional $180 in expense, assuming these were additional work hours and they were not given 4 hours off on a different day.

64 64 SATURDAY / SUNDAY HOURS Half Days vs. Full Days Cont.: The question is how much work would need to be performed to get to a breakeven point. The example below does not take into consideration the potential retail parts sales, only parts used in the service department. Effective Labor Rate $70 Gross Profit % 70% Labor Gross / Hour $49 Parts:Labor Ratio 1:1 $70 Parts Gross Profit % 30% Parts Gross / Hour $21 Total Gross / Hour $70 Add l Hours Breakeven Excel Add l Hours Breakeven PDF Expense divided by Gross/Hour = Labor hours sold to retire expense $160/$70 = 2.3 Labor Hours Perform this exercise using your actual dealership data, including overtime considerations. How many hours would it take for you to at least break even on the additional expense? Remember, the goal is to be available when the customer wants and expects you to be. Calculate your dealerships breakeven point for extending hours:

65 Service Capacity Guidebook STAGGERED HOURS Increased Production, and More Convenient Customer Hours

66 66 STAGGERED HOURS Many dealerships have the employees all start and end their day at the same time. While it s easy from a scheduling standpoint, the shop if often times underutilized. It is not unusual to see posted hours of 7AM 6PM. The advisors may work 7AM 5PM with the techs working 8AM-4:30PM, and the cashier helping the customers picking up until 6PM. A consideration for this option is staggering the technician start times. In many cases there are lost hours of production due to techs waiting for their first job of the day. It s difficult to write enough repair orders to have work waiting for the entire shop at 7AM, regardless of shop size. Keeping our focus on the goal, helping more customers per day by fixing more cars per day, we must minimize any lost production time. Financial benefits can be gained if more production hours are added. The other financial benefit can be from not needing to add personnel. Schedule Example: Monday Tuesday Wednesday Thursday Friday Advisor 1 7AM-5PM 7AM-5PM 7AM-5PM 7AM-5PM 7AM-5PM Advisor 2 8AM-6PM 8AM-6PM 8AM-6PM 8AM-6PM 8AM-6PM Tech 1 7AM-4PM 7AM-4PM 7AM-4PM 7AM-4PM 7AM-4PM Tech 2 7AM-4PM 7AM-4PM 7AM-4PM 7AM-4PM 7AM-4PM Tech 3 7AM-4PM 7AM-4PM 7AM-4PM 7AM-4PM 7AM-4PM Tech 4 7AM-4PM 7AM-4PM 7AM-4PM 7AM-4PM 7AM-4PM Tech 5 7AM-4PM 7AM-4PM 7AM-4PM 7AM-4PM 7AM-4PM Tech 6 9AM-6PM 9AM-6PM 9AM-6PM 9AM-6PM 9AM-6PM Tech 7 9AM-6PM 9AM-6PM 9AM-6PM 9AM-6PM 9AM-6PM Tech 8 9AM-6PM 9AM-6PM 9AM-6PM 9AM-6PM 9AM-6PM Tech 9 9AM-6PM 9AM-6PM 9AM-6PM 9AM-6PM 9AM-6PM Tech 10 9AM-6PM 9AM-6PM 9AM-6PM 9AM-6PM 9AM-6PM Perform this exercise using your actual dealership data, including overtime considerations. How many hours would it take for you to at least break even on the additional expense? Remember, the goal is to be available when the customer wants and expects you to be.

67 67 STAGGERED HOURS Benefits: Easier to implement Extends available hours for customers to visit dealership without adding support staff Immediate impact on production Improves coverage from open to close Can help reduce technician down time first thing in the morning Ability for active delivery by a service consultant later in the day Allows some flexibility in working with employee's needs. Potential Areas of Concern to Staggered Shifts: Employees unable or unwilling to work different hours Communicating new hours to customer base Ensuring employees clearly understand their work hours Must keep techs working late in the day productive the entire day. Increased Clock Hour Utilization: Do your technicians really start working at their scheduled time? By start working, I mean that they are in their work area ready for their first job. After looking into this concern further, many managers find this is not the case. What they find is that some techs get to work a few minutes before their shift, punch in on the time clock, go to the locker room to change into their uniform, get a cup of coffee, then stop by to see their service consultant for their first job. This usually happens within minutes after arrival. Sound familiar? Yes, they were on time for arrival, not for work. This lost time adds up. What s happening at your dealership? Do you have an opportunity?

68 68 STAGGERED HOURS Shop Pre-Loading: Another way to ensure technicians have a job first thing in the morning, is to pre-load the shop. At the end of the day, any open stall could be filled with a pre delivery or used car inspection. Something that can be done relatively quickly as soon as the tech arrives. No, it s not a customer s vehicle, but at some point these vehicles must get done. If you don t keep up on these vehicles, your sales team may ask you to sneak one through the shop to get another one delivered. And yes, there is a good chance this will cause a delay on a customer s vehicle. Communication: When you have a challenging situation at the dealership, you ll find it started with a lack of communication. When changing anyone s schedule, there needs to be an increased level of focus on who is working when. There also needs to be communication between the early and late service consultant and technicians. It s not fun being the person left trying to answer questions on a repair order that you know nothing about. Or when a customer arrives to pick up his or her vehicle and it s still in the technician s bay, and the technician has gone for the day. Increased communication methods: Posting a work schedule for all technicians and service consultants. This can be paper or electronic. Many find an old school paper schedule posted is quick and easy. Morning production meeting to discuss how you did yesterday, what s coming in today, any challenging vehicles that management needs to be aware of, anyone not at work today, etc. Quick huddle at lunch time to check progress and discuss any vehicles that may not meet the promise time. End of day or end of shift hand off to make sure there are no surprises. Help your employees understand the need for better communication. Set guidelines for specific processes or you may add a new frustration to your day.

69 Service Capacity Guidebook s Increased Production, More Convenient Customer Hours, & Employee Morale 10 Hr.

70 s As we continue to review more options to help increase capacity, this one helps address two areas of opportunity. The first being extended hours, by the technicians working 10 hours per day. And providing more flexibility to serve your customers.the other helps retain and attract employees by offering 3 days off per week, versus the conventional 2 day weekend, improving employee morale. Convenience is a key driver in loyalty for your customers. With busy schedules, customers are choosing brands that provide convenience suited to their needs not the other way around. Convenience, according to Merriam-Webster, is something (as an appliance, device, or service) conducive to comfort or ease. Focusing on convenience as a driver throughout your customer s experience could help you attract and retain customers who select you as the vendor of choice. To insure proper coverage when you choose the 4-10 schedule, you will need a set number of technicians for capacity each day that you are open. You want to leave a positive impression on all service employees going to a new shift, that you are doing something for them, not to them. Changing shifts is all about having a great attitude and involving your staff in the selection! Meet with the more influential employees to get their opinions before finalizing new schedule Now let s look at the financial increases going to a 4-10 work schedule. On Page 30, you will find a financial proforma for the service department, highlighting some improvements of going to 4-10 s. This document is the road map to generating net profit. Benefits: Help attract and retain employees---(up to) 3 days off each week Immediate impact on daily production by adding 2 hours to the work day Get customers in for an appointment quicker Free up stall space for current techs or allow for additional techs to be hired and keep stall:tech ratio the same Less missed days for doctor, dentist, etc. Appointments--can be scheduled on days off. Potential Areas of Concern to 4-10 s: Employees unable or unwilling to work additional hours Carryover work must be managed between technicians With only 4 work days, techs must be kept busy the entire shift---an unproductive day is harder to overcome Employee schedule changes must be clearly communicated to ensure adequate coverage. Support staff requirements need to be reviewed.

71 4-10 s Traditional 4-10 s Monday-Saturday with 3 Days Off This configuration addresses Saturdays and extended weekday hours and is generally well-liked by the staff. The technicians work 4-10 hour days each week with a semi-fixed schedule or with a rotation (see calendars below). Each tech s schedule moves down the chart each week, so on the 10th week the #1 technician will have Friday, Saturday and Sunday off, then as he rotates back into the #1 week, he will have Monday off, which results in 4 days off in a row. You can set your weekday hours to 7-6 or 7:30-6:30 or whatever is appropriate for your market. You could further expand hours by bringing in some of the technicians later in the morning, such as a 10-9 shift. Pairing of technicians and advisors should strongly be considered. While all efforts should be exercised, not to leave vehicles disabled during an extended (3-4 day) time-off period, pairing of technicians with equal skills can solve the problem. If a vehicle cannot be completed, the partner resumes the work needed to complete the repair. Below is an example schedule for a conventional 4-10 with Saturdays. Some dealerships have enough technicians to accommodate this type of schedule. If this does not accommodate you needs, don t panic! On page 23, there is an example of a 4-10 with an additional Saturday rotation s with Rotating Weekly Schedule 4-10's with Rotating Days Week 's with Rotating Days Week 2 Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Total Hours Total Hours 's with Rotating Days Week 's with Rotating Days Week 3 Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Total Hours Total Hours

72 s Traditional 4-10 s Monday-Saturday with 3 Days Off Cont. This configuration addresses also addresses Saturdays and extended weekday hours and is very well-liked by the staff. The technicians work 4-10 hour days each week with a semi-fixed schedule. This schedule is set up so that every two weeks, or monthly each technician has 5 days off in a row. The caveat being that every two weeks or monthly they only have one day off in between rotations. You can also set your weekday hours to 7-6, 7:30-6:30, or whatever is appropriate for your market. Pairing of technicians and advisors should strongly be considered considering the time off periods between crews. While all efforts should be exercised, not to leave vehicles disabled during an extended (3-4 day) time-off period, pairing of technicians with equal skills can solve the problem. If a vehicle cannot be completed, the partner resumes the work needed to complete the repair. This schedule lends itself to having more production available during the middle of the week when all technicians would be working on Wednesday and Thursday and may be a viable time do a staggered start time (7AM-6PM and 10AM-9PM). Below is an example schedule for a conventional 4-10 schedule with a semi-fixed rotation with Saturdays s with Semi-Fixed Rotation Schedule 4-10's with Rotating Days Week 1 or Month 's with Rotating Days Week 2 or Month 2 Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Total Hours Total Hours 's with Rotating Days Week 3 or Month 's with Rotating Days Week 3 or Month 4 Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Total Hours Total Hours

73 s 4-10 s Monday-Friday with Saturday Rotation This configuration is another option to address Saturdays and the need for extended weekday hours. The technicians work 4-10 hour days one week and 4-10 hour days plus an 8 hour Saturday the next week. They have 3 days off one week and two days off the next. Assuming that the service department is open 8 hours on Saturday, the technicians will average 44 hours per week. You can set your weekday ours to 7-6 or 7:30-6:30 or whatever is appropriate for your market. You could further expand hours by bringing in some of the technicians later in the morning, such as a 10-9 shift. This schedule could be two-week fixed (as shown) or could rotate (Week 1 - Tech 1 off Monday; Week 2 Tech 1 off Tuesday; Week 3 Tech 1 off Wednesday; etc.) In the 10 technician schedule, this rotation will give each tech a 4-day weekend every 10 weeks. Each tech s schedule moves down the chart each week, so on the 10th week the #1 technician will have Friday, Saturday and Sunday off, then as he rotates back into the #1 week, he will have Monday off, which results in 4 days off in a row. Pairing of technicians and advisors should strongly be considered. While all efforts should be exercised, not to leave vehicles disabled during an extended (3-4 day) time-off period, pairing of technicians with equal skills can solve the problem. If a vehicle cannot be completed, the partner resumes the work needed to complete the repair. Week One Week Two Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Total Hours Total Hours Week Three Week Four Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Total Hours Total Hours

74 s 4-10 s with Saturday / Sunday Rotation In this schedule, the technicians rotate 2-4 day weeks, then 4-5 day weeks. This covers Saturdays and Sundays while never having less than two days off per week. In fact, as you rotate the schedule weekly, the technicians who work the 4 day weeks will have four days in a row off for two weeks. In the week one example below, technician 1 will have Friday, Saturday and Sunday off then as he/she rotates into the number 2 slot, he/she will have Monday off. Then he/she works 4 days and has Saturday and Sunday off. Then he/she rotates to the number 3 slot and has Monday and Tuesday off. Just as with 4-10 s with Saturday rotation, pairing of technicians and advisors should strongly be considered. While all efforts should be exercised, not to leave vehicles disabled during an extended (3-4 day) time-off period, pairing of technicians with equal skills can solve the problem. If a vehicle cannot be completed, the partner resumes the work needed to complete the repair. Week One Week Two Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Total Hours Total Hours Week Three Week Four Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Total Hours Total Hours

75 s 4-10 s Additional Considerations Maybe you are already on 4-10 s and need just a little more production capacity. The owner still says no brick and mortar, and you re not sure what to try next. There s no rule stating you couldn t extend the hours slightly. You will have similar results as covered in the Extended Hours section. Time (Includes Lunch/Breaks) 4-10 s Rotating 4-10 s Semi-Fixed Weekly / Monthly 4-10 s M-F w/ Rotation Sat. Rotatation Weekly / Monthly Current Hours Add ½ Hour Add 1 Hour 7:30AM-6PM 7:00AM-6PM 7AM-6:30PM Daily Scheduled Hours Weekly Scheduled Hours Number of Techs s w/ Sat. / Sun. Rotation Daily Hours Added Weekly Hours Added Annual Hours Added - 1,040 2,080 Assumes Stall-to-Tech Ratio of 1.5:1 Sample Calendar for 4-10 s Shifts:

76 s Development of 4-10 Implementing Schedule The following are the task that should be included in your implementation plan. Select a kick off date and back up eight weeks The selection of the actual launch date will be determined based on many factors: schedules for vacation, business environment, time of year to name a few. There is no perfect time! Hesitation on your part will cause you to waffle on other parts, select your date and stay with it! Plan eight weeks before your launch. Schedule announcement or planning meeting This meeting will be the first step in the development and implementation of your new extended hours program. Personnel Involved Consider the following persons: Leaders of your service department (the more influential) technicians Management such as shop foreman, group leaders, service lane managers etc. Parts department personnel Consider parts manager, parts counter personnel Establish Meeting Objectives 1. Why are you having the meeting explain the following: To develop and implement new extended hours for our service and parts department Provide additional convenience for our valued customers Allow the technician additional time off If you have considered extended hours as an alternative to building a new service department be sure and present this as one of your objectives. 2. Need your help and input into the development of our new program 3. All of the attendees must understand they are part of the change, and that why there are present at this meeting. 4. Present your basis structure Don t be firm because once you get everyone involved they may develop a better idea than yours be flexible! Ask your staff to study your plan and offer suggestions Getting them to think and be involved is a major element of a successful implementation. Ask them to develop alternate schedules Explain you want to work within the goal posts you presented but how the program is written between them is open for consideration. 5. Items required for the meeting: Handouts of your plan Including sample schedules

77 s Development of 4-10 Implementing Schedule Establish Meeting Objectives (continued) 6. To make this a successful meeting consider some of the following points: Know your plan study it and know it inside and out Anticipate the questions from your staff Plan your response Make your staff part of the plan include their recommendations as is logical, but at the end of the day, everyone may not agree. Your job is to get it done with or without them Be flexible but you can t break Don t allow the meeting to get into why are we changing, that s not up for debate you are committed to the change People run from change not to it 7. Point for consideration to be made during your meeting Pros / Benefits of 4-10 s Able to serve more customers More convenient Increased production opportunities Provide employee flexibility (3 Day Weekends) Increase capacity Increase hours produced Increase CSI Increase customer retention Increase net profit Cons of 4-10 s Four days to earn what they made in five May have to move tool box (if space is an issue discuss storage) May have to move technicians to new locations to maximize working utilization. Be sure and make them part of the solution, ask them for their recommendations

78 4-10 s Development of 4-10 Implementing Schedule Schedule 2nd Planning Meeting 1. Answer questions as needed 2. Review the planned schedule Agree to it Modify as required Develop process for implementation consider the following in finalizing Finalize the schedule General Information meeting with all employees 1. This meeting is scheduled to announce the plan to the entire staff. They have heard bits and pieces up to this point now they need to hear how the new schedule will affect them personally 2. Review the new plan and schedule in general brief overview 3. Give the implementation plan and dates for each step 4. Address some questions in general, don t allow the answering of detailed questions on how it will affect individual technicians and employees, hold these till one on one interviews 5. Include the employee advantages: More quality time with family, the cost savings on child care (more focused on 3-13 s) Time with hobby s (fishing, hunting, boating, etc.) Up to a three day weekend 6. Hold questions until one-on-one meetings (if employees have heart burn this is not the time, in a group situation to answer questions.) One on one interviews with each employee (held weekly w/ each employee before actual launch) 1. Some may say, Why don t we just get with and kick it off? The reason is you need to spend time with the employees to be sure they have bought in to the new method of operation. Most people will just plug it and yell go! Everyone starts running,. This plan is a systematic approach to minimize confusion. When you hear from the employee why don t we just kick this off and stop talking about it, you have them! 2. This meeting is to discuss the questions the employee may have and were uncomfortable in discussing in the general information meeting. And to secure the employee buy-in Include the employee advantages such as more quality time with family, the cost savings on child care & gas and more time with hobby s (fishing, hunting, boating, etc.) Key talking points: New schedule Part they play in new schedule Do they see any issues with new schedule? 78

79 s Development of 4-10 Implementing Schedule One on one interviews with each employee (held weekly w/ each employee before actual launch) (continued) 3. Employees to be interviewed: Service technicians Service advisors Porters Parts support Loan car personnel Appointment coordinator 4. Overcoming Resistance to Change: This meeting is to discuss the questions the employee may have and were uncomfortable in discussing in the general information meeting. And to secure the employee buy-in A solution for dealing with resistance to change is to get the people involved to participate in making the change. Resistance is usually created because of certain blind spots and attitudes to new ideas. Management can take concrete steps to deal constructively with these staff attitudes. The steps include emphasizing new standards of performance for staff and encouraging them to think in different ways. Ensure them that you will advertise, and use internal work to get it started so hours do not suffer. Turn the questions in to a positive point

80 s Proforma This proforma document is the road map to generating net profit, and highlights the benefits of implementing 4-10 s in your dealership. Item # 1 Financial Projection 1 Current Performance Projected Changes Projected Performance Item Technician Work Hours per Day Item # 1 Financial Projection 2 Current Performance Projected Changes Projected Performance Item Technician Work Hours per Day Production Percentage 96.60% 0% 96.60% Monthly Technician 3 Work Days Monthly Utilization % 89.10% 4.00% 93.10% Technician Flat Rate 5 Hours = Number of Technicians Flat Rate Hours Produced - Total = Overall Effective Labor Rate $ Total Labor Sales = $119,006 $125, Labor Gross Profit % 71.00% Gross Profit = $84,494 $88, Departmental Expenses + $45,321 $45, Fixed Expenses + $32,562 $32, Total Expenses - $77,883 $77, Labor Net Profit = $6,611 $10, Sublet Gross Profit + $256 $ s Proforma 4-10 s Proforma 17 Parts Gross Transfer No Techs + Added $0 2 Techs Added 0 $0 18 Other Gross Profit + Excel $0 Excel 0 $0 19 Statement Net Profit = $6,867 $11, Months in Period Annualized Net Profit = $82,407 $133,946 Annualized Net Proft 22 Improvement - $51,538 2 Production Percentage 96.60% 0% 96.60% Monthly Technician 3 Work Days Monthly Utilization % 89.10% 4.00% 93.10% Technician Flat Rate 5 Hours = Number of Technicians Flat Rate Hours Produced - Total = Overall Effective Labor Rate $ Total Labor Sales = $119,006 $150, Labor Gross Profit % 71.00% Gross Profit = $84,494 $106, Departmental Expenses + $45,321 $3,000 $48, Fixed Expenses + $32,562 $32, Total Expenses - $77,883 $80, Labor Net Profit = $6,611 $25,664 Blank Proforma 16Blank Proforma Sublet Gross Profit PDF + $256 $ Excel Parts Gross Transfer + $0 0 $0 18 Other Gross Profit + $0 0 $0 19 Statement Net Profit = $6,867 $25, Months in Period Annualized Net Profit = $82,407 $311,040 Annualized Net Proft 22 Improvement - $228,632 Wow! Just by changing to a different work shift NET PROFIT increase of $51,538, and by increasing two technician s you have annualized net profit improvement of $228,632. Calculate your dealerships improved financial benefits with 4-10 s:

81 Service Capacity Guidebook s Increased Production, More Convenient Customer Hours, & Employee Morale 13 Hr.

82 s As we continue to review more options to help increase capacity, this one helps address two areas of opportunity. The first is extended hours, with the technicians working 13 hours per day, providing more flexibility to serve your customers. The other helps retain and attract employees by offering up to 4 days off per week, versus the conventional 2 day weekend improving employee morale. Attracting and retaining employees plays a big part in the long term success of any business. So, why should I work at your dealership? What do you have to offer that is different when compared to every other dealership? Some dealerships are finding that having the ability to offer 4 days off each week is pretty attractive. Convenience is a key driver in loyalty for your customers. With busy schedules, customers are choosing brands that provide convenience suited to their needs not the other way around. Convenience, according to Merriam-Webster, is something (as an appliance, device, or service) conducive to comfort or ease. Focusing on convenience as a driver throughout your customer s experience could help you attract and retain customers who select you as the vendor of choice. To insure proper coverage when you choose the 3-13 schedule, you will need a set number of technicians for capacity each day that you are open. You want to leave a positive impression on all service employees going to a new shift, you are doing something for them, not to them. Changing shifts is all about having a great attitude and involving your staff in the selection! Meet with the more influential employees to get their opinions before finalizing new schedule The concept of working personnel on schedules of three 13-hour workdays has become quite popular in many areas. It is one of the most favored work schedules used in the health care industry today. This approach allows the service department to be open for 6 days and evenings and it is possible to cycle the work schedule every 8 weeks, making it easy to administer. It also, is a cost effective alternative to adding brick and mortar The 8-week cycle is best operated by using complete sets of personnel, but only provides one day of rest between work stints every 8th week, and creates a seven day break every 8th week. Extreme caution must be exercised with this option because of the long workday. Facilities in extremely hot climates must be climate controlled. On Page 38, you will find a financial proforma for the service department, highlighting some improvements of going to 3-13 s. This document is the road map to generating net profit.

83 s Benefits to 3-13 s Help Attract and retain employees Up to 4 days off per week Up to 7 days off every 8 weeks, if put on rotation Immediate impact on daily production Cost effective method vs. brick and mortar, of increasing (up to 2X) stall count Great for a service facility that is short on service bays Convenient for customers, extended hours are now part of the schedule Maximizes calendar utilization by allowing for training and personal appointments to be done on scheduled day off. Extended hours are now part of the schedule, great for some customers Full day Saturday can now be a reality. Potential Areas of Concern to 3-13 s Employees unable or unwilling to work additional hours Carry over work must be carefully communicated and shifted to other techs at change over Additional support staff and management will need to be reviewed to work with second crew Ensuring techs produce at 100%+ is critical to the success---if they produce less hours on this shift, it may not be sustainable One bad day and a techs production for the week can suffer Support staff requirements will need to be reviewed Facility may need upgrades to provide convenience for techs Heating & A/C for extreme temp climates Storage of tool boxes

84 s Additional Hours Compared to Conventional 8 Hour Schedule Some manager will want to hire more techs, but still don t believe they have the room. With 3-13 s, the dealership can be open more hours, FULL day Saturday, increase available stall space, and add technician production. If you had a typical service department that had 10 technicians (1.5 stalls per tech), were open Monday thru Friday, no Saturdays, no extended hours, and brick and mortar was not an option. You hired 4 techs and went to 3-13 s. What did they gain? Additional production available every day (6 techs working 13 hours) Extended hours every day (open until 9PM, not 5PM) Full day Saturday (not closed) Technicians with some room to work (not 1 tech for 1 stall) Technicians with more time off (4 days off per week) Current Hours 3-13 s 3-13 s 3-13 s Total Days M-F M-W Th-S M-S Time (Includes Lunch/Breaks) 8AM-5PM 7AM-8PM 7AM-8PM 7AM-8PM Daily Scheduled Hours Weekly Scheduled Hours Number of Techs Daily Hours Added Weekly Hours Added Annual Hours Added - 1,716 4,732 6,448 Assumes Stall-to-Tech Ratio of 1.5:1 +Add 4 Technicians In this example, you added almost 6,500 hours of available time to repair vehicles, while providing incredible benefits to your employees with up to 4 days off per week, all the while offering more convenient hours for your customers.

85 s 3-13 s with 4 Week Rotation In the chart example, techs 1-5 work Monday-Wednesday for 4 weeks, then take 7 days off before they begin their Thursday Saturday shift; techs 6-10 work Thursday Saturday for 4 weeks, then have 1 day off before they begin their Monday Wednesday shift. Sunday hours can easily be incorporated into this schedule. In this case, pairing of technicians and advisors should be mandatory. Each group should have a mirrored partner group, including an advisor. In fact, the groups should meet on the evening before the shift change or the morning following the shift change. While all efforts should be exercised, not to leave vehicles disabled during an extended (3-7 day) time-off period, pairing of technicians with equal skills can solve the problem. If a vehicle cannot be completed, the partner resumes the work needed to complete the repair. As the implementation discussions take place, the process team should determine the details to this structure. Week One - Four Week Five - Eight Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours s 4 Week Rotation s M-F / 8 s Sat. / Sun.Rotation Total Hours Total Hours s Monday Friday / 8 s Saturday and Sunday Depending on your market conditions, you may find the need to work Sundays as well. In this example half of the technicians work a 39 hour week (3 days) and half of the technicians work a 42 hour week (4 days). Every 4 weeks the schedule flips, giving one group seven days off, while the other group works seven days in a row. Week One - Four Week Five - Eight Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Total Hours Total Hours Sample Calendar for 3-13 s Shifts:

86 s Development of 3-13 Implementing Schedule The following are the task that should be included in your implementation plan. Select a kick off date and back up eight weeks The selection of the actual launch date will be determined based on many factors: schedules for vacation, business environment, time of year to name a few. There is no perfect time! Hesitation on your part will cause you to waffle on other parts, select your date and stay with it! Plan eight weeks before your launch. Schedule announcement or planning meeting This meeting will be the first step in the development and implementation of your new extended hour s program. Personnel Involved Consider the following persons: Leaders of your service department (the more influential) technicians Management such as shop foreman, group leaders, service lane managers etc. Parts department personnel Consider parts manager, parts counter personnel Establish Meeting Objectives 1. Why are you having the meeting explain the following: To develop and implement new extended hours for our service and parts department Provide additional convenience for our valued customers Allow the technician additional time off If you have considered extended hours as an alternative to building a new service department be sure and present this as one of your objectives. 2. Need your help and input into the development of our new program 3. All of the attendees must understand they are part of the change, and that why there are present at this meeting. 4. Present your basis structure Don t be firm because once you get everyone involved they may develop a better idea than yours be flexible! Ask your staff to study your plan and offer suggestions Getting them to think and be involved is a major element of a successful implementation. Ask them to develop alternate schedules Explain you want to work within the goal posts you presented but how the program is written between them is open for consideration. 5. Items required for the meeting: Handouts of your plan Including sample schedules

87 s Development of 3-13 Implementing Schedule Establish Meeting Objectives Cont. 6. To make this a successful meeting consider some of the following points: Know your plan study it and know it inside and out Anticipate the questions from your staff Plan your response Make your staff part of the plan include their recommendations as is logical, but at the end of the day, everyone may not agree. Your job is to get it done with or without them Be flexible but you can t break Don t allow the meeting to get into why are we changing, that s not up for debate you are committed to the change People run from change not to it 7. Point for consideration to be made during your meeting Pros / Benefits of 3-13 s Able to serve more customers More convenient Increased production opportunities Provide employee flexibility (4 Day or 3 Day Weekends Depending on Schedule) Increase capacity Increase hours produced Increase CSI Increase customer retention Increase net profit Cons of 3-13 s Three or Four days to earn what they made in five May have to move tool box (if space is an issue discuss storage) May have to move technicians to new locations to maximize working utilization. Be sure and make them part of the solution, ask them for their recommendations

88 3-13 s Development of 3-13 Implementing Schedule Schedule 2nd Planning Meeting 1. Answer questions as needed 2. Review the planned schedule Agree to it Modify as required Develop process for implementation consider the following in finalizing Finalize the schedule General Information meeting with all employees 1. This meeting is scheduled to announce the plan to the entire staff. They have heard bits and pieces up to this point now they need to hear how the new schedule will affect them personally 2. Review the new plan and schedule in general brief overview 3. Give the implementation plan and dates for each step 4. Address some questions in general, don t allow the answering of detailed questions on how it will affect individual technicians and employees, hold these till one on one interviews 5. Include the employee advantages: More quality time with family, the cost savings on child care Time with hobby s (fishing, hunting, boating, etc.) Three day weekend 6. Hold questions until one-on-one meetings (if employees have heart burn this is not the time, in a group situation to answer questions.) One on one interviews with each employee (held weekly w/ each employee before actual launch) 1. Some may say, Why don t we just get with and kick it off? The reason is you need to spend time with the employees to be sure they have bought in to the new method of operation. Most people will just plug it and yell go! Everyone starts running,. This plan is a systematic approach to minimize confusion. When you hear from the employee why don t we just kick this off and stop talking about it, you have them! 2. This meeting is to discuss the questions the employee may have and were uncomfortable in discussing in the general information meeting. And to secure the employee buy-in Include the employee advantages such as more quality time with family, the cost savings on child care & gas and more time with hobby s (fishing, hunting, boating, etc.) Key talking points: New schedule Part they play in new schedule Do they see any issues with new schedule? 88

89 s Development of 3-13 Implementing Schedule One on one interviews with each employee (held weekly w/ each employee before actual launch) (continued) 3. Employees to be interviewed: Service technicians Service advisors Porters Parts support Loan car personnel Appointment coordinator 4. Overcoming Resistance to Change: This meeting is to discuss the questions the employee may have and were uncomfortable in discussing in the general information meeting. A solution for dealing with resistance to change is to get the people involved to participate in making the change. Resistance is usually created because of certain blind spots and attitudes to new ideas. Management can take concrete steps to deal constructively with these staff attitudes. The steps include emphasizing new standards of performance for staff and encouraging them to think in different ways. Ensure them that you will advertise, and use internal work to get it started so hours do not suffer. Turn the question in to a positive point

90 s Proforma This proforma document is the road map to generating net profit, and highlights the benefits of implementing 3-13 s in your dealership. Item # 1 Financial Projection 1 Current Performance Projected Changes Projected Performance Item Technician Work Hours per Day Item # 1 Financial Projection 2 Current Performance Projected Changes Projected Performance Item Technician Work Hours per Day Production Percentage 96.60% 0% 96.60% Monthly Technician 3 Work Days Monthly Utilization % 89.10% 10.00% 99.10% Technician Flat Rate 5 Hours = Number of Technicians Flat Rate Hours Produced - Total = Overall Effective Labor Rate $78.56 $ Total Labor Sales = $119,006 $127, Labor Gross Profit % 71.00% 0% Gross Profit = $84,494 $90, Departmental Expenses + $45,321 $0 $45, Fixed Expenses + $32,562 $0 $32, Total Expenses - $77,883 $77, Labor Net Profit = $6,611 $12, Sublet Gross Profit + $256 $0 $ Parts Gross Transfer + $0 $0 $0 18 Other Gross Profit + $0 $0 $0 19 Statement 3-13 s Proforma Net Profit = 3-13 s $6,867 Proforma Blank Proforma $12,613 No Techs Added 2 Techs Added PDF 20 Months in Period Excel Excel 21 Annualized Net Profit = $82,407 $151,352 Annualized Net Proft 22 Improvement - $68,944 Wow, just changing the calendar utilization has changed the bottom line with an increase of $69,000 Net profit, the second projection shows an increase of $249,519 with the addition of two technicians. Technicians will quickly understand missing a day of work will cost them dearly. Technicians will schedule training, doctor s appointments etc. on their scheduled days off. Vacation days will actually go down, because technicians don t want to take any more time off. Calculate your dealerships improved financial benefits with 3-13 s: 2 Production Percentage 96.60% 0% 96.60% Monthly Technician 3 Work Days Monthly Utilization % 89.10% 10.00% 99.10% Technician Flat Rate 5 Hours = Number of Technicians Flat Rate Hours Produced - Total = Overall Effective Labor Rate $78.56 $ Total Labor Sales = $119,006 $152, Labor Gross Profit % 71.00% 0% Gross Profit = $84,494 $108, Departmental Expenses + $45,321 $3,000 $48, Fixed Expenses + $32,562 $0 $32, Total Expenses - $77,883 $80, Labor Net Profit = $6,611 $27, Sublet Gross Profit + $256 $0 $ Parts Gross Transfer + $0 $0 $0 18 Other Gross Profit + $0 $0 $0 19 Statement Net Profit = $6,867 $27, Months in Period Annualized Net Profit = $82,407 $331,927 Annualized Net Proft 22 Improvement - $249,519

91 Service Capacity Guidebook ADDING A SECOND SHIFT Increased Production, Convenient Customer After Hours

92 92 ADDING A SECOND SHIFT If after analyzing your situation, your only concern is capacity, you might benefit from adding a second shift. Internal and fleet work are the most common types of work done. There are several different work schedules that can accommodate this shift. Attracting employees to this shift will determine how you create the schedule. There are several areas of consideration that need to be discussed: Benefits to Second Shift: Help attract and retain employees looking for alternative schedule to help reduce day care costs Convenience to work on customer vehicles that can't come in during the day Decrease days to get used cars inspected and on the lot Keep caught up on PDI's during non peak times Ability to perform Fleet business when those vehicles are not on the road Potential Areas of Concern to Second Shift: Employees unable or unwilling to work later hours Carryover work must be carefully communicated to day shift Supervisory positions must be considered Support staff will need to be reviewed Parts availability can be a concern if big jobs are not already diagnosed.

93 93 ADDING A SECOND SHIFT Internal Night Shift This option typically is one of the least expensive. No cashier is required, parts can be pre-pulled and no customer relation s personnel are needed. A foreman level technician or group leader is usually the only additional person required to operate a second shift. In the event of a high level of incoming new or used vehicles, the shift can work all night to meet the demand. Generally the night shift will pre-deliver new cars and inspect used cars one night, prepare estimates and perform approved additional work the next night. This configuration frees up bays during the day to add additional technicians. Another additional consideration might be to perform limited customer pay work up to a certain time, e.g., until midnight. However, this may require additional personnel expense (advisor and/or cashier). Internal Night Shift Tech Mon Tue Wed Thu Fri Sat Sun Total Hours 1 7A-4P 7A-4P 7A-4P 7A-4P 7A-4P A-4P 7A-4P 7A-4P 7A-4P 7A-4P A-4P 7A-4P 7A-4P 7A-4P 7A-4P A-4P 7A-4P 7A-4P 7A-4P 7A-4P A-4P 7A-4P 7A-4P 7A-4P 7A-4P A-4P 7A-4P 7A-4P 7A-4P 7A-4P A-4P 7A-4P 7A-4P 7A-4P 7A-4P Internal Night Shift P-1A 4P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A 4P-1A 40 Total Hours Sample Calendar for Internal Night Shift

94 94 ADDING A SECOND SHIFT Full Service Second Shift Better facility and market utilization may be obtained with a full service second shift. It is more expensive to operate, as customer relations personnel (advisors, cashiers and parts support) are required. The skill level of the technical staff must be equal to that of the first shift. This might be an option in markets where other second and third shifts are employed (factories, hospitals, etc.). With a second shift you must contend with vehicles not completed by the primary work force or the secondary work force for one reason or another. You must determine in advance whether each shift is fully responsible for its own work or will pickup with carryover work. This arrangement will work best with.75+ stalls per technician, as it ensures that each technician that shows up for their shift has a stall to perform work. This is because not all work can be completed by the end of each shift, and it is better to have an open stall or two available for work. Example: 20 bays 15 technicians on day shift, 8 technicians on night shift. Communication between the primary shift and the second shift is usually quite good because there is some overlap at the management level. However, communication between the second shift and the primary shift is not as easily accomplished. Supervisory personnel must provide excellent notes to the primary shift from the second shift. This communication is extremely important when the second shift is a full service operation. There must also be excellent communication between the advisor(s) and the second shift customers when in a full service operation. A time when they can be contacted in the evening must be determined in advance for each customer. You do not normally want your evening advisor to call customers at 2:00 a.m. All diagnostic operations must be completed early in the evening so that authorizations can be obtained for any additional work found. If customers cannot pick up their vehicles before a predetermined time, the customer must be instructed to call in the morning before picking up their vehicle to ensure that repairs have been completed. Someone other than the primary work force advisor must handle all customers who pick up their vehicles from the previous evening. The need for a cashier at night may be eliminated in a full service second shift operation by limiting customer pick-up and drop-off to a pre-set time, e.g., 7:00 p.m., 8:00 p.m., etc. Customers may not pick up vehicles for either shift after this set time unless the advisor has obtained pre-approved credit card payment or credit card imprints for express checkout after normal hours of operation. An early-bird system for both shifts can be used for drop-off vehicles.

95 95 ADDING A SECOND SHIFT Full Service Second Shift (continued) Full Service Second Shift w/ Saturday Rotation Week 1 Full Service Second Shift w/ Saturday Rotation Week 2 Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours 1 7A-4P 7A-4P 7A-4P 7A-4P 7A-4P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 7A-4P P-1A 4P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A 4P-1A 40 Total Hours Total Hours Full Service Second Shift w/ Saturday Rotation Week 3 Full Service Second Shift w/ Saturday Rotation Week 4 Tech Mon Tue Wed Thu Fri Sat Sun Total Hours Tech Mon Tue Wed Thu Fri Sat Sun Total Hours 1 7A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 7A-4P A-4P 7A-4P 7A-4P 7A-4P 7A-4P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P A-4P 7A-4P 7A-4P 7A-4P 8A-5P P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A Full Service 2nd Shift P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A 4P-1A Total Hours Total Hours Sample Calendar for Full Service Second Shift:

96 96 COMBINING MODIFIED WORK WEEKS When changing work schedules, meeting the needs of the customers, the business, and the employees must be all be considered. Some employees may have commitments outside of work that would not allow them to work at certain times. Due to this reality, some managers have found it beneficial to combine several different schedules into their business. As you ll see in the next example, different modified work week schedules can be blended together to suit the needs of your dealership. You re only limited by your imagination. In this example, the dealership incorporated - 2) 4-10 s with 3-13 s to create a 6 am until 1 am and full-day Saturday and Sunday service. This schedule can potentially be a value in attracting technical talent. You can solicit for technicians who don t want to work weekends and you can solicit for technicians that only want to work 3 days a week. Many technicians that are currently working at Independent Repair Facilities (IRF s),and are already working weekends would love a schedule like this. 4-10's Double Shifts Early and Late with 3-13's for Weekend Tech Mon Tue Wed Thu Fri Sat Sun Total Hours 1 6A-4P 6A-4P 6A-4P 6A-4P A-4P 6A-4P 6A-4P 6A-4P A-4P 6A-4P 6A-4P 6A-4P A-8P 7A-8P 7A-8P A-8P 7A-8P 7A-8P P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A P-1A 4P-1A 4P-1A 4P-1A A-8P 7A-8P 7A-8P A-8P 7A-8P 7A-8P 39 Total Hours

97 Service Capacity Guidebook / 10 SHIFT Increased Production, with 20 Days On, 10 Off,

98 98 20 / 10 WATCH 20 Days On 10 Days Off One of the most common things heard in dealerships is that they cannot find and attract qualified technicians. So this example may seem radical to some, but for those in the situation of needing to go to 24 hours of operation, here is another option to consider. Why 24 hours? In most cases, it is due to lack of physical room and having a high volume of work. In some parts of the country, such as where there has been oil industry growth, it has also been very challenging to attract and hire employees. So, in addition to the ability to produce labor 24 hours per day, this schedule can also be a method to attract employees from other areas. This particular example has been used by the tug boat industry. The benefits to the dealer can be: Increased production in labor hours brings increased profits Increased Customer Satisfaction due to ability to get customer vehicles completed quickly Maximize use of existing operation leading to maximum stall utilization Schedule minimizes need for vacation and personal days Reduces holiday days off to Thanksgiving, Christmas, and New Year s Day Training days to be scheduled on off days or off watch Key Candidates There are technicians and other dealership employees that don t necessarily want to move to the city. With this type of production system and schedule, you can attract people from outside your area. They spend 20 days at work and then they are off for 10 days. The 10 days off is what helps eliminate the need for vacation and personal days. In the case where new employees are hired from outside the area, there are additional expenses to consider. Some industries will cover the expense for housing and travel during the 20 day work period. Sounds crazy to some, but if the alternative is not having techs to repair vehicles, it s something to consider. At that point you would need to do a cost/benefit analysis to see if it does make sense for your business.

99 99 20 / 10 WATCH Benefits to an Employee and Your Dealership The benefits to the employee start with having 10 consecutive days off each month. Granted, they worked the past 20 days and will need and enjoy it, but it will still feel more like a vacation than just a long weekend. Depending on the production level of the technician, they should produce at least an additional 800 hours per year when compared to a conventional 40 hour work week. 40 hours x 52 weeks = 2080 hours 20 days x 12 hours x 12 months = 2880 hours More hours equals increased pay, which is important to some, but not all. The millennial generation for example, seeks a work life balance much different than the baby boomer generation. This different schedule with more days off, could be attractive to them. Using the example from the tug boat industry, a watch consists of 6 hour increments. Six hours on and 6 hours off twice a day. Crew change dates: Monday/Thursday, Tuesday/Friday, Wednesday/Saturday, Thursday/Sunday Benefits of 6 hour watches are that it keeps the employees fresh in hot and cold climates. It will maximize company resources, and open up stall space that could accommodate quick service. If there wasn t a concern with employee burn out, working 12 hours on and 12 hours off could also be an option. What It Looks Like For the rotations, the technicians would be divided into 3 groups called captains, relief captains and pilots. The three rotations which will include an assistant service manager, a parts consultant, a group leader and 3 technicians. There will be a set daily objectives for each watch, two objectives per day. This new system will give you the ability to schedule afternoon and evening service appointments and for the first time ever, offer early bird pickup.

100 / 10 WATCH Challenges There are unique challenges anytime you implement a new schedule. The success of any variation of the 20/10 schedule will start with the development of strong assistant service managers. There will need to be additional training for all supervisory levels, including group leaders who will be challenged to make key decisions in service manager or director s absence. Implement and communicate zero tolerance policy for missing a crew change. Work turnover twice a day and filling the back watches with work can be challenge, especially if someone fails to show up for work. Financial Benefits with Case Study Below is a case study that illustrates the financial impact on a dealership with 8 technicians that grow it to 12 and implement a 20/10 schedule. The expenses used in this example were from a high labor cost area. This is meant to be an example only. You may use local expense averages to calculation the impact in your own dealership. Common Current Operation 8 hour day and every other Saturday They have 10 vacation days, 4 training days, and 6 holidays 26.3 work days per month 20/10 Schedule Open 7 days a week (closed Thanksgiving, Christmas, and New Year s Day) Technicians will be on watch each for 20 days and off 10 days 0 vacation days needed, 0 training days, and 3 holidays work days per month 20/10 Case Study Additional Expenses and Comparison Data Addition of 4 technicians, 1 service consultant, and 1 parts counterperson 4 technicians at 100% production on 12 hour clock $25 per FRH. An additional 30% was estimated to cover employee benefits 12 FRH x $25 x 4 x 20 x 30% = $7,200 Service Consultant budget is $8,000 plus 30% in estimated benefits = $10,400 Parts Consultant budget is $6,000 plus 30% in estimated benefits = $7,800 Flight cost per month for 3 crews coming in $200 x 18 = $3,600 Living arrangement $2,000 per month Food budget $25 per day per person. 12 employees x 30.2 days = $9,060 Total additional expenses = $40,060 Gross Profit 70% for both Clock hours worked, 8 vs 12 for the 20/10 Percent of production, 100% for both Number of days in a month, 26.3 and 30.2 for the 20/10 Calendar utilization, 92%

101 / 10 WATCH Proforma Current Performance Projected Changes Projected Performance Item Technician Work Hours per Day Production Percentage 96.60% 0% 96.60% Monthly Technician Work Days Monthly Utilization % 89.10% 4.00% 93.10% Technician Flat Rate Hours = Number of Technicians Flat Rate Hours Produced - Total = Overall Effective Labor Rate $78.56 $0 $78.56 Total Labor Sales = $119,006 $237,393 Labor Gross Profit % 71.00% 0% 71.00% Gross Profit = $84,494 $168,549 Departmental Expenses + $45,321 $40,060 $85,381 Fixed Expenses + $32,562 $32,562 Total Expenses - $77,883 $117,943 Labor Net Profit = $6,611 $50,606 Sublet Gross Profit + $256 $256 Parts Gross Transfer 20/10 Watch Blank Proforma + $0 $0 Proforma Excel PDF Other Gross Profit + $0 $0 Statement Net Profit = $6,867 $50,862 Months in Period Annualized Net Profit = $82,407 $610,343 Annualized Net Proft Improvement - $527,935 The financial rewards from the changes in the example are significant, over $500,000 in 1 year! Keep in mind this was adding higher than average personnel expense and only 4 technicians. With this template, you can now calculate what this type of change could mean to your operation. Calculate your dealerships improved financial benefits with a 20/10 Watch Schedule:

102 102 MANAGING THE EXTENDED HOURS PROCESS Most dealerships that employee modified work schedules utilize some form of Shift Manager. This person(s) can be a foreman, assistant service manager or lead advisor. This person or persons should have the authority to make a decision in the manager or directors absence. If you are doubling your production staff, it may be a good time to add a foreman to supervise the shift. The manager at Wal-Mart doesn t work 24/7 and neither should you. Use the extended hour options described in this document to determine which options might work in your situation. Ask your team to evaluate and determine a plan for your shop. As with any major undertaking, there are a lot of questions that will need to be answered: If this happens, then what do you do? It is the team s responsibility to create solutions to these problems. Make sure that you get the solutions on paper. It will be important that you cover and cover again all of the variables such as work transfers and coverage s. Get it in writing! WE MUST create documents to support our change and development. When a question comes up, two weeks, two months or two years from now, we can refer to the document. Whatever you decide to do, DO NOT let extended hours be your best kept secret! Promote it using social media, dealership advertising and blasts. If you use a BDC, provide a word script encouraging appointments during extended hours. Offer special prices or discounts for after-hour customers. Many different configurations can be developed by mixing and matching the various options described in this guidebook.

103 103 HOURS OF OPERATION SUMMARY Increase Clock Hours Staggered Shifts Easier to implement Benefits Additional support staff not needed Immediate impact of additional production Employees can earn more Help reduce backlog of appointments Easier to implement Extends available hours for customers to visit dealership without adding support staff Immediate impact on production Improves coverage from open to close Can help reduce technician down time first thing in the morning Ability for active delivery by a service consultant later in the day Allows some flexibility in working with employee's needs. Potential Challenges Employees unable or unwilling to work additional hours If unable to keep technicians busy the entire day, additional hours could be viewed as unnecessary Employees unable or unwilling to work different hours Communicating new hours to customer base Ensuring employees clearly understand their work hours Must keep techs working late in the day productive the entire day. 4-10's 3-13's Help attract and retain employees---3 days off each week Immediate impact on daily production by adding 2 hours to the work day Get customers in for an appointment quicker Free up stall space for current techs or allow for additional techs to be hired and keep stall:tech ratio the same Less missed days for doctor, dentist, etc. appointments--can be scheduled on days off. Help attract and retain employees--- Up to 4 days off each week Immediate impact on daily production Maximizes calendar utilization by allowing for training and personal appointments to be done on scheduled day off Great for shop that is short on service bays Extended hours are now part of the schedule, great for some customers Full day Saturday can now be a reality Employees unable or unwilling to work additional hours Carryover work must be managed if a technician change over With only 4 work days, techs must be kept busy the entire shift--- an unproductive day is harder to overcome Employee schedule changes must be clearly communicated to ensure adequate coverage Support staff requirements will need to be reviewed. Employees unable or unwilling to work additional hours Carryover work must be shifted to another tech at the end of 3rd day Ensuring techs produce at 100%+ is critical to the success---if they produce less hours on this shift, it may not be sustainable One bad day and a techs production for the week can suffer Support staff requirements will need to be reviewed Second Shift Help attract and retain employees looking for alternative schedule to help reduce day care costs Now available to work on customer vehicles that can't come in during the day Decrease days to get used cars inspected and on the lot Keep caught up on PDI's during non peak times Ability to perform Fleet business when those vehicles are not on the road Employees unable or unwilling to work later hours Supervisory positions must be considered Support staff will need to be reviewed Carryover work must be carefully communicated to day shift Parts availability can be a concern if big jobs are not already diagnosed Combined Methods 20/10 Help attract and retain employees by fitting them in a schedule that fits their lifestyle One size does not fit all, and this can help accommodate the business needs together with the employee Help attract employees that are willing to work hard to earn 10 days off each month Useful in areas difficult to get candidates that want to move there Highest level of calendar utilization Could be helpful in hiring a specialty tech, such as transmission or diesel. Communicating who works when is critical to the success With several different schedules, vacations and time off must be planned more carefully Getting candidates to consider a schedule they have likely not heard of before Those with a young family, this may not be a consideration Support and management coverage must be reviewed.

104 104 PROFORMA & ADDITIONAL CALCULATORS After determining the changes to be implemented in your dealership, you ll want to understand the financial implication. The Proforma below will allow you to just that. Enter your current situation numbers in the left column, apply your projected changes and calculate the net effect on your business. Item # 1 Financial Projection 1 Current Performance Projected Changes Projected Performance Item Technician Work Hours per Day 0 2 Production Percentage 0.00% Monthly Technician 3 Work Days Monthly Utilization % 92.00% Technician Flat Rate 5 Hours = Number of Technicians 0 Flat Rate Hours 7 Produced - Total = Overall Effective Labor 8 Rate Blank Proforma Blank Proforma $ Total Labor Sales = Excel $0 PDF $0 10 Labor Gross Profit % 0.00% 11 Gross Profit = $0 $0 12 Departmental Expenses + $0 13 Fixed Expenses + $0 14 Total Expenses - $0 15 Labor Net Profit = $0 $0 16 Sublet Gross Profit + $0 17 Parts Gross Transfer + $0 18 Other Gross Profit + $0 19 Statement Net Profit = $0 $0 20 Months in Period Annualized Net Profit = $0 $0 Annualized Net Proft 22 Improvement - $0 Blank Proforma Sheets: Additional Calculators:

105 Service Capacity Guidebook ADDITIONAL CONSIDERATIONS/FAQ Why and how things are changing