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Productivity vs. Efficiency

Which one matters the most?
Tuesday, August 27, 2013 - 11:00
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When most of us started in the automotive repair business, we had a dream we were trying to achieve. It might have been spending more time with the family or with our hobbies. It might have been to earn more money to provide a better life, or we simply felt we could do it better than most. Whatever your dream was, the No. 1 dream wrecker I have witnessed in my 40-some years watching shop owners has been on the labor side of the business.

If you can succeed with productivity and efficiency, you will be much closer to your dreams coming true. This month, let’s listen to a lesson from our instructor on this subject, Randy Somers, while he explains to owners and service managers how to improve the labor side of your shop.

Many of us in the automotive profession have multiple names to describe virtually the same thing. For instance, a customer could have a check engine light on or a drivability concern and we could perform an engine diagnostic, or a checkout, an engine analysis or a test; we might even “pull codes.” Some of you might remember when we would scope the car to determine what was wrong. These terms used in different ways essentially mean the same thing to us. Productivity and efficiency are terms that are frequently used in different situations to describe the same thing.

Many shop owners measure productivity of techs something like this: “My techs seem busy all day.” Busy doesn’t always equate to being productive. Sometimes efficiency is expressed in these terms: “My tech is very efficient; he cleans all his tools after every job.” While that could be one interpretation of efficiency, it isn’t the definition we are using here. Productivity, or lack of it, is an issue many people face in the day-to-day world of owning a shop. Over the years, I have heard owners saying things like “I don’t know what’s wrong, everyone seems to be busy and nobody is goofing off. We must need more cars.”

In order to be profitable and offer customers great service with the WOW factor, a shop needs to be truly productive and efficient. Here are a few simple steps to follow to get you well on your way.

The Difference
First we must define the terms. To me, technician efficiency is measured in this way: If I give a technician a one-hour job that he or she does in one-half hour, then that tech is 200 percent efficient. My experience in automotive is that most technicians are efficient. When you give them a one-hour job they are usually done in one hour. Sometimes even less. Productivity is a measure of how many of those efficient jobs get stacked on top of each other in an eight-hour day to make eight hours of labor sales or more. Keeping that thought in mind, we should always be 100 percent productive or more than 100 percent if our technicians are over 100 percent efficient. So why aren’t we?

The second step will be to determine where we are in terms of productivity versus where we should be in productivity, which is different again from where we could be. To measure your overall team productivity, you need to take the total labor hours produced in any given time period divided by the total hours of floor time or actual clock hours worked in the same time period. For example, if I have 90 hours of billed labor in a week and my techs have 120 hours of actual time worked (3 techs x 40 hours),then I would be 75 percent productive.

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