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Productivity vs. Efficiency

Which one matters the most?
Tuesday, August 27, 2013 - 11:00
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Realistic versus Achievable
The third step would be to determine what a realistic and achievable goal for productivity is. Being 75 percent productive, is that a good number or not? I can tell you that it is above the industry average. Is 75 percent a good number or not though, that is a different question altogether. I would never shoot for the average. No one ever wakes up in the morning and says “Wow, I hope I have an average day today.”

People usually don’t fail because they set the bar too high, people usually fail because they set the bar low and achieve their goal. In order to know if 75 percent productive is good or not, you need to know what you are capable of producing. In the above example, it would be easy to say that if my techs work 120 hours then I would expect 120 hours. If I set the bar high, I might even expect 120 percent productivity or 144 hours of labor in a 120-hour week. This is achievable but probably not sustainable.

 I think that 90 percent is a good target for productivity. It is realistic, attainable and sustainable. Once we reach 90 percent productivity, I would recommend adding another tech and making them 90 percent productive as well. If we agree that 90 percent productivity is a good target or goal, we have to ask ourselves, 90 percent of what? Ninety percent of 120 hours of floor time would be 108 hours produced. That works if we assume all techs are capable of producing 40 hours in a 40-hour week.

Is a typical A level technician capable of producing 40 hours in a 40-hour week? I think so. Is a typical B level technician capable of producing 40 hours of labor in a 40-hour week? I think so. Is a general service tech capable of 40 hours in a 40-hour week? Ehhh. Maybe 20 is a more realistic number in this example. So do I really have the capability to produce 120 hours in 120 hours worked, or am I staffed to produce 100 hours in a 120-hour week? If that is the case, then that would make 90 percent productivity 90 hours billed, not 108.

Diagnosis the Problem
The last step will be to figure out exactly where the problem lies if your technicians aren’t at least 90 percent productive. It is easy to blame “those dang technicians” when productivity is low. The problem is that — as the above definition shows — efficiency is more of a technician issue, not productivity. Low productivity is more a front counter function than a technician concern.

So now it’s “those dang service writers’ fault.” While that might be satisfying to say from time to time, it isn’t always true either. In order to fix productivity, we need to determine what is stopping us from being productive. Let’s examine some of the many things that get in the way of productivity.

Technician efficiency could be a cause of low productivity, so what hinders efficiency in technicians? Technician skill level could stand in the way of our being productive. Are we dispatching the correct skill level work to the correctly skilled technicians? Do we have a training issue or even a retraining issue? Are technicians being pulled on and off of vehicles and that prevents them from being productive? Are the technicians standing around waiting for parts, or could they possibly be standing around waiting for okays on the work they have already checked out (the result of a backlog at the front counter)? Are they waiting for someone to direct them to what to work on next, or have we set expectations so they already know which jobs to work on next? Is it a car count concern, or is it a concern with the amount of work we recommend on each vehicle? It can make your head spin trying to decipher all the reasons that could prevent us from being both efficient and productive.

In order to be productive and efficient we need to define, measure and manage. In order to get on the road to productivity and profitability, we first need to measure in order to manage. The productivity worksheet is the first step on that road. Simply go to www.ationlinetraining.com/2013-9 and print it out while it is available. Fill in your technicians’ times for one week, and follow the suggestions for managing your way to the life of your dreams. Remember this is a limited time offer.

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