Impact Analysis 2: Impact of Integrated Time Management

Not all time management systems are created equal.
There certainly are a whole slew of me-too "shop programs" that claim to do it all. Many will write service well enough, some keep track of your parts (maybe), a few dabble with rudimentary time tracking. But none fully manage technician time the way ServiceShop does.

What is technician time to a repair shop? It's three things:
1: Approximately 50% of your product mix (service is parts and labor combined to an end product).

2. Approximately 100% of whatever differentiates you from your competition (the parts certainly don't).

3. Labor inventory, just sitting there on the shelf, waiting to be billed out.

It's INVENTORY - and it's every bit as valuable to you as your parts inventory. How do you feel if that parts inventory grows legs and walks out the door - unbilled, because somehow the parts never made it onto the ticket? Pretty upset, right? So why would you be any less upset over UNBILLED LABOR? Why would it EVER be OK with you NOT to bill out EVERY one of these hours of labor sitting in inventory WAITING to be billed out?

If you have 3 technicians working 40 hours per week, you have 120 labor hours in inventory available to sell each week, and that's assuming you only strive for 100% technician productivity (some call it efficiency). What's your shop's productivity? Do you know? Do you have ANY IDEA?

Here's a set of numbers most everyone can agree on:
Average shop productivity in shops without time management: 60%.
Average shop productivity in shops with time management: 110%
Average labor rate: $55/hour.
Number of techs: 1
Hours worked per week per tech: 40

Total labor hours billed at 60% productivity: 40 hrs worked x 60% = 24 hours
Total labor dollars generated at 60% productivity (at $55/hour): 24 hrs x $55/hr = $1320

Total labor hours billed at 110% productivity (at $55/hour): 40 hrs worked x 110% = 44 hours
Total labor dollars generated at 110% productivity (at $55/hour): 44 hrs x $55/hr = $2420

Incremental labor dollars generated with time management (per technician per week) = $2420 - $1320 = $1100

This means you stand to recover $1100 in unbilled labor per technician per week by simply implementing time management alone (regardless of any other possible impact ServiceShop might have on profitability.)

These numbers prove that tracking technician time is perhaps the single most important area of management control and is probably one of the hottest topics on the shop management lecture circuit today. The top management trainers in the country will tell you first and foremost - implementation of true technician time management will jump start your profits like no other single business adjustment you can make.

So how can you possibly overlook the process of MANAGING IT? Certainly it is a huge mistake not to. Some shop owners are afraid to, because they think the technicians will resist it. This is generally untrue - most technicians prefer it, especially if they are compensated in such a way that they are rewarded for good productivity. And so they should be. If a technician can have a beneficial impact on the bottom line of your company and strives to do so, that technician should be be made to feel the benefits of his actions.

GenesisFour has always understood the importance of tracking technician time, and has always incorporated full time management functionality throughout its software in many different ways - so extensively that it influences nearly every aspect of how the system thinks. This in turn will influence every aspect of how you, and perhaps more importantly, how your service advisors and your technicians think. Every hour of labor you have in inventory available to sell - should be sold. And then some.

There is an entire mindset change in the shop once time management is in place. Everybody thinks differently. Everybody works differently. And it's all vastly for the better. Even if you are doing something with manual time punching now, it cannot, and does not hold a candle to a full-blown implementation of time management throughout your management system. It's so important that all other feature differences pale by comparison.

Car manufacturers dealerships have always understood the importance of tracking technician time. Why? 2 reasons.

1. Because they think in terms of labor inventory. They know exactly what they have for labor inventory, and insist that it all be sold. Shouldn't you do the same?

2. Because the manufacturers hold their dealers accountable for technician time because they are often being billed for it by the dealer for warranty reimbursement, and the manufacturers have a major problem paying for labor that didn't happen. Shouldn't you? Your customers sure do.

At least some owners of larger shops understand all this implicitly. Those that do... generally purchase our software because, quite frankly, no one has a better implementation of time management software than we do.

Sadly, owners of smaller shops frequently dismiss time management as being irrelevant to them. They think that it's only for larger shops. This is perhaps one of the biggest strategic errors a shop owner can ever make, especially since once they overlook it (by selecting a shop program that can't do it properly, and most can't), they have no easy way of getting it, and at that point, they're stuck.

Big shop, or small shop, it makes no difference. If you do nothing else that we, or anyone else tells you to do... do time management. If not from the first day you get ServiceShop, soon thereafter (it's an optional module that can be added at any time with a single phone call).