-
New owner looking for the efficiency epiphany
Hi folks, New around these parts. Long story short, I got into this line of management for the wrong reasons. Bailed out a friend financially and came in to turn things around. Friend has given up and gone dark. I’m on the line with a massive debt. Exciting stuff.
I found a diesel tech that is phenomenal knowledge wise but I’m having efficiency problems. Every job is taking 2-3-4 times book time to complete due to scope changes. How do you plan around these previously unknowns in your world? Example, LLY Duramax. Came in for head gaskets. Was eating coolant. We all know how it goes when headgaskets misbehave. Generally, we send all injectors out for bench testing at the same time as head check and deck. this time around, customer said they were “new” (later found out this means 3 years old and no warranty). So once we got everything back together, 2 injectors continued to fail and started returning massive amounts of fuel. Customer approved replacement. Now something else has come up (good ol electrical gremlin that we love so much). So, now here we are. 3 weeks and about 80 hours into a 20hr job that we’re almost complete but it’s pushed other jobs back and I find myself constantly apologizing to everyone. Duramax guy is annoyed things took so long (Some parts waiting was involved in the 3w), waiting customers dont like timeline changes. I feel like I’m losing on every side. For information sake, we mostly do larger engines rebuild and performance. Little lacking on the brakes and small services here so we’re a lot of big, high ticket but slow moving revenue. I need to move so I can start supplementing, this part I know.
My largest question is how do you guys deal with planning of jobs and scope changes? I’ve had to push back jobs so we can finish this one (small shop, only 2 bays). Seems like we’re blowing our scope and turnaround time on nearly every job due to hiccups like this. Can they be accounted for? Can they be minimized? Do you just do what you were told and send out a potentially inferior product because “the customer is always right” (I hate that saying).
I appreciate any and all input, even if it’s chastising me for getting into a field I know too little about. This is my 3rd company, with the other two being successful growth and sale deals. I thought that would prepare me for this world as well but it’s a pretty unique beast. I have great respect for all of you that have made it work.
Cheers,
Adam
Sorry for the edit, lost formatting after I fixed a typo.
-
7 Replies
-
Adam, I suspect you have multiple issues going on here. I have theories, but I will avoid guessing. I would suggest you get either a management coach and/or join a 20 Group if you want to cut to the chase and fix things. These folks understand the things you are asking about and can help you through them.
There are many choices in the directories on this site: https://www.automotivemanagementnetwork.com/tools/shop-owner-resource-directory/
-
Thanks for the resources, Tom. I’ll look into.
-
First off I would say you have to have processes and procedures and then follow them Without Fail! Don’t let customers talk you out of doing what’s right. Two bays are really hard to work with, especially if you get vehicles tore down and can’t move them. Expand if at all possible even if it’s just one more bay so you can have an open one to do brakes etc, in. You are correct in saying you should be doing more smaller jobs, way more upside and margin in those than in large tear downs etc… I have also worked with shops in the past that worked off of scissor lifts outside, (and floor jacks) good weather and bad. Step back from the business and make decisions in a rational way and try not to get emotionally involved. I could go into the whole bailing out the friend thing but I won’t. I’ll tell you probably one of the greatest lessons my dad ever gave me. “You don’t have to do business with all of the people, just the right people. It’s up to you to know the difference.” Back to the scope of work changes, YOU must keep the customer informed at all times. With what you are doing I would even look into rental vehicles so it eases the burden of having customers without their vehicle. #1 complaint of unhappy customers, I didn’t get my vehicle back when promised. I could probably come up with some more ideas if I knew some more specifics.
-
Adam,
I agree with Tom. A good management coach is worth their weight in gold. They will be able to help diagnose and fix your problem(s) better, simply because they will be armed with the information concerning your situation.
Generalizations are tough to implement. I can’t tell you what to do, but I can tell you what works for me in our shop.
We are/were a transmission specialty shop that had big-ticket jobs due to the nature of the business. Our ARO was slightly over $1.700 and our MARO was almost $3.500. We discouraged leaks, noises, & vibration type repairs because of the time/profit reward wasn’t there for us. We did do transmission services simply because we’re expected to, although we only made a minimal profit. Sort of like going into a Mexican restaurant where everybody expects free salsa & chips.
We set the shop up with enough techs, equipment, & room to get the jobs in and out in a timely manner. Production was the name of the game. However, that’s easier said than done. I’m sure by now your aware of hiring more techs to get the work out and soon as you get caught up, you start to have techs standing around not making money. This brings me to my 3rd and final point.
A shop owner’s primary job should be marketing. Generating leads, converting leads into appointments, and closing appointments into sales. And all that starts by making the phone ring off the hook. * That’s the basic job description of a successful shop owner. Some shops are successful enough to delegate some of these duties, but you’re probably not. You’re suffering from what I affectionately call “production constipation”.
To get help with all of this, and more, contact Bob Cooper’s office at Elite Worldwide in San Diego and his office will hook you up with one of their business coaches. https://www.eliteworldwide.com/
I’ve used Elite multiple times, have purchased many of their products and they were worth every penny. I’m not saying another business coach won’t help you. I’m just telling you what worked for me and perhaps you can apply it to your individual situation. Good Luck!
-
I agree with the above comments about getting some automotive specific management training/consulting. I use RLO training. They’ve done well for me in the past.
-
Adam
You have received some great advice. All these suggestions can be helpful, and most coaches will make a positive difference in your business.
I might start out a little differently. The most important resources in my 40 years, have been other shop owners. I would suggest reaching out to others in your same specialty area. Sometimes you need to be bold and just call them and strike up a conversation.
Looking at your specialty and other markets in Alberta, my first thought might be Alpha Diesel in Calgary. They are also new and you both likely fight similar battles. If not them, keep looking. I have been shot down more than i have created relationships, but the relationships i have developed have made a real difference in my business.
In my store, we are the general generalists. Their is nothing specialty about us. What i have learned is that when the scope of repairs changes, and it was unpredictable by any reasonable assessment, then the scope to the customer changes. I would hope that buys you back some of those lost hours. Never had the heads off that diesel, but 20 hours seems light on first glance. Certainly the injector issues involve extra labor charges, as it was the customer that mislead you.
We have a reasonably new term in my store when it comes to diagnosis. “Thorough and complete customer interrogation”. Any thing less and we get our selves in trouble.
As far as your techs efficiency issue, my suggestion is, make sure he knows how much labor he generated and how much he cost, everyday, or at least at the end of every job, in the case of big jobs like you do. He can do it on a piece of paper. I make sure my techs do this recording, so it is not a question of accuracy.
I hope you find other owners to “partner” with. It can be one of the most rewarding parts of this business.
Best of Luck
-
Hi I have a small 2 bay shop as well.
Can you expand or set up in such a manner that the vehicle can be moved out of the shop and brought back in.
I have a towing company that I use who I get move disabled vehicles from my parking lot to the bay and vise versa.
That is a cost that can be planned for and figured in.
As for letting cusotmer’s decide, you need to be the expert and guide the correct decision.
So from now on you need to say MR customer when we take heads off we send injectors out for testing.
If the customer balks or declines he needs to sing the RO that customer declined suggested procedure and then the onus becomes on him if the injector leak after the engine is put back together. But even best avoided by being firm that your shop does the job that way so it is done correctly and that is it.
Its not possible to avoid all changes in scope it is part of the nature of the job. Sometimes we learn by experience
what goes wrong with certain vehicles and certain jobs so that extra time and labor or extra for parts can be added on. You’re better off quoting a bit high and removing excess if the job goes smoother than planned.
Also be ware of what estimator you are using. Some times are simply too low for an older vehicle or if its not something you do regularly then perhaps extra labor needs to added on.
You’re better off to concentrate on smaller jobs with a bigger profit margin than big complicated jobs or vehicle brands that are not.
Log in to reply.