sect 3, performance diagnostics

Section 3

Distributor Service Department Performance Diagnostics

3.1 Management and Supervision

3.3 Gross Profit Low

3.2 Direct Expenses, High

Performance Diagnostics

3.4 Indirect Expenses, High

3.5 Net Contribution, Low

Total Workshop Sales

Diagnostics Chart - 1:

Managerial,Supervisoryissues


3.1

3.1

Management and Supervision

Business Prospecting

3.1


Customer Relations

Service Department

Parts Department

Direct and Non-Direct Productive Staff

3.1.1


3.1


3.1.1


Reasons

Analyze True Potential?

3.1


Exploit Fleet Service?Customer Visits?

Customer Records?

Wrong Targets?

3.1.1


Actions

Proper Market Study

3.1


Service Contracts

Customer Visit Plans

Customer Data Base

SMART Targets

3.1.2

Poor Customer Relations

3.1


3.1.2


Reasons

Department Image?

3.1


Poor Work Standards?Customer Complaints?Customer Consent?

No Service Contracts?

3.1.2


Actions

Improve Overall Image

3.1


Improve Procedures

Complaints ProcedureReceipt Procedure

Various Contracts

3.1.3

Service Department

3.1


3.1.3

Service Department

Reasons

Productivity/Efficiency?

3.1


Improper Workflow?

Supervision?

Monitor Unsold Time?Improper Facilities?

3.1.3

Service Department

Actions

Increase Sales/Training

3.1


New Procedures

Management

Performance MonitoringReview Facilities

3.1.4

Parts Department

3.1


3.1.4

Parts Department

Reasons

Service to Workshop?

3.1


First Pick Availability?Pre-Planning?

Communication?

Retail More Important?

3.1.4

Parts Department

Actions

Change Attitude

3.1


Forecasting

Better Pre-planning

Communication

Biggest Customer

3.1.5

Direct and Non-Direct Productive

Staff

3.1


3.1.5


Staff

Reasons

Quality and Training?

3.1


Supervision?

Systematic Planning?Incentives, etc.?

Missed Service Sales?

3.1.5


Staff

Actions

Train or Replace

3.1


Management

Workshop Planning

Motivational SchemesBetter Inspections

Total Workshop

Sales

Direct Expenses



3.2


3.2

Direct Expenses, High

Unsold Time

3.2


Policy Adjustments

Consumables, Tools

3.2.1

Unsold Time

3.2


3.2.1

Unsold Time

Reasons

Workshop Planning?

3.2


Parts Supply?

Workshop Facilities?

Supervision?

Time Management?

3.2.1

Unsold Time

Reasons, cont’d

Service Marketing?

3.2


Pre-Planning?

Parts Forecasting?

Tools Not in Order?

Waiting Approvals?

3.2.1

Unsold Time

Reasons, cont’d

No Jobs?

3.2


Other Duties?

Training?

Redo as Unsold?

Goodwill as Unsold?

3.2.1

Unsold Time

Actions

Bill of Materials, BOMs

3.2


Parts Management

Review Facilities

Service ManagementCapture Relevant Data

3.2.1

Unsold Time

Actions, cont’d

Marketing Strategy

3.2


Systems/Procedures

Parts Forecasting

Tools Management

Approvals Process

3.2.1

Unsold Time

Actions, cont’d

Service Marketing

3.2


Proper Time Sheets

Training Plans

Improve Sold Quality

Correct Job Bookings

3.2.2

Policy Adjustments

3.2


3.2.2

Policy Adjustments

Reasons

Quality Assurance?

3.2


Warranty Recovery?

Customer Goodwill?

Labor on Accessories?Warranty Terms Info?

3.2.2

Policy Adjustments

Actions

Work Procedures

3.2


Warranty ManagementBook Cost Properly

Improve Quotations

Hand-Over Procedure

3.2.3

Consumables and Tools

3.2


3.2.3


Reasons

Improper Control?

3.2


Purchase Agreements?Store Keeper?

Cost on Job Card?

Proper Charge?

3.2.3


Actions

Proper Procedures

3.2


Purchase AgreementsStore Keeper

Proper Costing

Charge Rate Policy

Total Workshop

Sales

Gross Profit

Direct Expenses



3.3


3.3

Gross Profit Low

External Labor Sales

3.3


Warranty Labor SalesInternal Labor Sales

Sublet and Bought-Out

3.3.1


3.3


3.3.1


Reasons

Unbalanced Work Mix?

3.3


Customer Database?

Prospecting Customers?No Customer GoodwillTime to Sell

3.3.1


Actions

More External Sales

3.3


Create Database?

Prospect Customers

Customer Relations

Training

3.3.2

Warranty Labor Sales

3.3


3.3.2


Reasons

Improper Diagnostics?

3.3


Warranty/Normal Job?Incomplete Claim?

Service Campaigns?

Low Efficiency?

3.3.2


Actions

Training, Procedures

3.3


Decision Process

Claim Administration

Do All Campaigns

Supervision

3.3.3

Internal Labor Sales

3.3


3.3.3


Reasons

Sales Dept?

3.3


Internal Rates?

All Jobs Charged?

Job Authorization?

Units Over-Prepared?

3.3.3


Actions

Service a Profit Center

3.3


Uniform Rates

Specify All Jobs

Approvals Process

Set PDI Standards

3.3.4


3.3


3.3.4


Reasons

Manage Lube Oil Stock?

3.3


Negotiate Rates?

Late Invoices?

Job Authorization?

Scrap Management?

3.3.4


Actions

Oil Stock Procedures

3.3


Supply Agreements

Enforce Supplier SLA

Approvals Process

Scrap Sales Procedures

Total Workshop

Sales

Gross Profit

Direct Expenses

Indirect Expenses



3.4

Indirect Expenses High

Employee Expenses

3.4


After Sales Expenses

Admin Expenses

Depreciation Expenses

3.4.1

Employee Expenses

3.4


3.4.1

Employee Expenses

Reasons

Salary Levels?

3.4


Ratio Productive Staff?High Sick Leave?

Manage Attendance?

Poor Staff Quality?

3.4.1

Employee Expenses

Actions

HR Policy, Assessment

3.4


Ratio 3.5:1

Staff Management

Attitude

Training, Assessment

3.4.2

Aftersales Expenses

3.4


3.4.2

Aftersales Expenses

Reasons

Warranty Recovery?

3.4


Goodwill Repairs?

High Redo Level?

Warranty Terms?

Manage Ad Campaigns?

3.4.2

Aftersales Expenses

Actions

Warranty Procedures

3.4


Approvals Process

Repair Quality

Handover Process

Marketing Policy

3.4.3

Administrative Expenses

3.4


3.4.3


Reasons

Manage Vehicle Fleet?

3.4


Expensive Rent?

Facilities Maintenance?Control of Utility Cost?Purchasing Policy?

3.4.3


Actions

Proper Procedures

3.4


Negotiate Rent

Maintenance Policy

Review Utility Usage

Purchasing Policy

3.4.3


3.4


3.4.4


Reasons

Incorrect Policies?

3.4


Rent/Purchase Policy?Manage Fixed Assets?Manage Capex?

Insufficient Capex Budget?

3.4.4


Actions

Proper Policies

3.4


Decide Buy or Rent?

Asset Management

Capex Policy

Proper Capex Budget

Total Workshop

Sales

Gross ProfitNet

Contribution

Direct Expenses

Indirect Expenses



3.5


3.5

Net ContributionLow

Direct Expenses

3.5


Indirect Expenses

Service ManagementResource Optimization

3.5.1

Direct Expenses

3.5


3.5.1

Direct Expenses

Reasons

Cost Productive Staff?

3.5


High Unsold Time?

High Redo Level?

Manage Productive Staff?Manage Sublet/Bought-out?

3.5.1

Direct Expenses

Actions

Review HR Policy

3.5


Workshop ManagementRepair Quality

Supervision

Sublet/Bought-out Management

3.5.2

Indirect Expenses

3.5


3.5.2

Indirect Expenses

Reasons

Cost Non-Direct Productive Staff?

3.5


High Facilities Cost?

Manage Sundry Exp.?High Admin Expenses?Manage Depreciation?

3.5.2

Indirect Expenses

Action

Ratio Direct/Non-Direct

3.5


Maintenance Policy

Expense Policies

Cost Control

Depreciation Policies

3.5.3

Service Management

3.5


3.5.3

Service Management

Reasons

Manage Main KPIs?

3.5


Low Sales?

Staff Management?

Policies/Procedures?

Ratio Internal/External?

3.5.3

Service Management

Actions

Know Your KPIs

3.5


Sales Strategy

Supervision

Policies/Procedures

Increase External Sales

3.5.4

Resource Optimization

3.5


3.5.4


Reasons

Facilities Usage?

3.5


Low Productivity?

Low Efficiency?

Low Pre-Planning?

Improper Follow-up?

3.5.4


Actions

Facilities Optimization

3.5


Increase Sales

Training

Workshop ManagementCRM Policy

Total Workshop

Sales

Gross ProfitNet

Contribution

Direct Expenses

Indirect Expenses

Improvement Area



3.6

Improvement Areas

Productivity

3.6


Efficiency

Resource OptimizationService ManagementCost Control

3.6.1

Productivity

3.6


3.6.1

Productivity

Actions

Improve Management

3.6


Differentiated Labor Rate

Improve Skill Levels

Increase Pre-PlanningIncentive to Boost Sale

3.6.2

Efficiency

3.6


3.6.2

Efficiency

Actions

Skills Assessment

3.6


Tools and Equipment

Capture Actual Time

Improve Common JobsReview Work Procedure

3.6.3


3.6


3.6.3


Actions

Facilities Utilization

3.6


Productivity/EfficiencyRight Tools/EquipmentService Vehicle UsageAssessments

3.6.4

Service Management

3.6


3.6.4


Actions

Customer Prospecting

3.6


Customer Relations

Layouts/Workflows

Service Marketing

Manage KPI and Staff

3.6.5

Cost Control

3.6


3.6.5

Cost Control

Actions

Improve Attendance

3.6


Approvals ProceduresUpdate Facilities

Supply Agreements

Manage and Follow up

Workshop 3

Impact of Productivity and Efficiency on Bottom Line

3.6


Section 3 - Summary

Service Department Total Sales:

- Direct Expenses = Gross Profit

- Indirect Expenses

= Net Contribution

sect 3, performance diagnostics

Automotive