Fixed Ops Magazine - 2021 Vol18 06 - 62

both CP and Warranty in the Base Case. If there was a
$15 reduction in labor for LOF in 100 of these customers,
then sales would go down and CP Hours per RO
would go up!
If management implemented a pay plan based on increasing
Hours per RO, it can result in paying more to
your service advisors for a negative performance.
WHAT HAPPENS WHEN THE DEALER
COMES BACK FROM THE 20 GROUP WITH
A PAY PLAN THAT REWARDS AN INCREASE
IN HOURS PER RO?
He will get the desired increase in Hours per RO!!
Case Study:
In 1984 I was working with two very large, high-profile
dealerships in Toronto, Canada. The goal was to
improve Hours per RO. We ran a two-month contest
and concluded it with an awards dinner. The evening
included the dealer principal, service management
team, and service advisors for the presentation of
results. The winning team was served steak and the
losing team was served a plate of beans. On the winning
team, the leading service advisor increased his
Hours per RO from 1.8 to 3.9. How did he do it?
He stopped selling small jobs!
THE EFFECT OF STOPPING THE SALES OF
" SMALL JOBS "
Suppose that the service advisors stopped selling
small jobs to the group of 200 customers who bought
HOW CAN THIS PROBLEM BE CORRECTED?
One way of fixing this problem is to use the actual customer
count (1,400) as the divisor in the calculation. If
managers do this, then selling more actually increases
Hours per RO and selling less decreases it.
This will result in a more direct correlation between
Hours per RO and sales performance. This is not the
only solution. But it is one that will yield a more accurate
measurement. It is also the one that will help dealerships
understand and improve their performance.
Les Silver, is the Executive
Chairman of Dynatron
Software, Inc.
Dynatron provides analytics
software
and
pricing
optimization
solutions for service department
customer pay
(CP) labor and warranty
labor and parts. Les has
pioneered technology enabled solutions for automotive
service departments for almost 40 years.
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