Improving Revenue and the Standard of Workshop Services

Text: Zyed Ahmad Hassan

Very often you come across a workshop with either empty or full service bays. This is a common phenomenon in the motor industry. Depending on the size of workshop you are running, the size and quality of resources you have and the kind of facilities that you have, and the standard of services you are providing, the initial perception can be misleadingly right or wrong. When we look at this issue in a different perspective, a workshop which is managed systematically with customer focus in mind will not have an empty bay. This is because we will put in all our efforts towards getting all of our service bays occupied at all times.

Many customers drive in their vehicle and expect to be attended to immediately. Depending on the nature of service required it is the CSO to make a value judgement on work priority or promise time.

Here the number of service bays and technicians available are the basis for revenue optimization. All these must be planned at the time the customer is arriving to the workshop. Service appointment is thus very important. With service appointment you are able to distribute work flow in the workshop.

If you have a small workshop, limited technician and just one CSO this can be very challenging! More challenges if you have little stock of fast moving spare parts. You might have seen workshop with full service bays due to lack of spare parts and thus not able to distribute the work effectively! There is no point promising customer a turnaround time when there is no service bay available, no technician available and no spare parts for the job. Most non ethical workshops try to manipulate the technicians available resulting in existing jobs overhang. It is always important to know your workshop capacity utilization in order to yield optimal results.

I notice many workshops do not analyse their customer database. They do not make use of the service history resulting in most of the internal resources not being allocated properly. Failure to forecast your customer arrival flows, not only wasting valuable assets but also denying profit opportunities.

We all know that business of fixing and servicing cars is cyclical and seasonal. If the workshop keeps track of the vehicle mileage and the service record, they will able to recognise certain pattern when the vehicles are coming back to the workshop and they will have a better way of forecasting their revenue. Workshop must target to improve this revenue before they can grow their revenue or customer base.

Unfortunately for some workshops, most service bays are occupied with comeback jobs or spoilt jobs which increase utilization but decrease productivity and efficiency that finally eats up the revenue.

Rather unfortunate also because some companies do not have a back to back warranty arrangement with the principal. Self warranty which is not properly accounted for could be wildly unmanageable because what goes in through the left pocket, a different amount will go out through the right pocket. Approval on this nature of warranty is based on individual decision which is some time intervened by the management, political circumstances, personal relationship, favouritism, and many other non favourable factors.

Improving workshop services needs a lot of team work,bahvioural and analytical studies. You also need more focus and in-depth insight into your own operations. Your ability to analyze your service bay occupancy rates will go a long way in helping you not only maximize the use of internal resources, but also open you service drive up for a range of other potential opportunities or revenue streams. Additionally, these analyses should be seriously considered as ground zero for all your special service programs and offer campaigns.

For instance, special coupons and special price packaged deals should only be reserved for slower time slots, slower days of the months and particularly for customers who are likely to defect or have defected already. These special circumstantial customers and their vehicles should only be considered during specific time periods, because they affect your profit margins. A business should only consider reducing profit margins when necessary and when not doing so results in either a zero profit or a net loss.

Why would you process a repair order that results in a reduced margin or a net loss ahead of a repair order that gives you relatively higher profit margins? Well, do this especially when you are dealing with limited amount of service technicians and service bays. Remember, customers who shop for cheaper prices are generally more flexible with their schedules. A fact that is consistently used to price airline tickets online via third-party sites.

If you want a competitive workshop and you have not done the following activities, why not consider them seriously and implement them right away.It is good to have additional service bays where you can allocate certain service bays for ‘passionate owners ’ and certain for ‘drop offs’ busy customers. For that you must also have drop -off services in place.Consider implementing such services if you have not started one.

Most industries adopt appointment system where factors like ‘check-in time’, ‘start time ‘ will determine ‘time to completion’. Similarly for ‘walk –ins’. Having this system carefully followed , the workshop manager could predict reasonably sound resource allocation for his workshop and department. This could in turn fulfil customer expectations more accurately.

Really, there are so many things to consider and of course not all may be addressed in one go. I truly believe that if dealer based service centers are to survive they must work towards being a one stop shop for all their customer needs.When I say one stop shop I truly mean one stop shop. You can train people to be the expert in glass changing and repairs, tyres, air conditioning, etc. Except for some specialised accessories and body building, there is no reason that your dealership should send out or contract out or sub -contract the job to outside workshop.

So, finally, if you want your service center to truly be competitive in today’s marketplace, you must realize that true opportunity is not only about what you can sell to the customer, rather what you can deliver within the shortest and fastest period and with uncompromised quality and service. A successful future for your dealership no longer entails only measuring success based on revenue growth but also distribution and process optimization.

Alas, it is time to embrace a holistic service platform, more than just appoinment and multi point inspection. A platform that consists of among others a true service reservation system based on resource allocation model and real-time shop flow distribution capabilities.

Advertisements

About westpro's Blog

Golfer, traveller, charity worker, blogger, gardener, housekeeper. Email to zyedhassan@gmail.com for further information.
This entry was posted in Management, Maxus and tagged , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s