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Fixed Ops Magazine – October 2022

Sharing Service Resources Between Customer-Pay and Internal Service Environments

By Jennifer Marszalek

Service managers and advisors for combined retail and internal service centers often juggle conflicting priorities, personalities, and equipment that can test patience, resources, and the never-forgiving clock.

Customer-pay and warranty work is vital to all dealers' profitability and customer relations. Because its focus is the public customer, the retail service function often has the pull in the combined service environment when priorities conflict.

We all understand the need to address the retail customer's service and parts needs. We all try our best to dispatch their service and maintenance needs efficiently and promptly. But Internal service operations can be too easily pushed aside, even though Internal ops services more cars and sells more parts in a period than retail. It's been said a dealership's number one customer - and by association, internal service operations - is its used car department.

Technicians for both retail and internal work hard to deliver quality work and labor hours for their respective customers. In shared environments, resources, and equipment are stretched thin under the same unforgiving clock.

I know these challenges firsthand in my twenty-plus years of experience as a service manager and used car reconditioning manager. When we installed reconditioning software to help us reduce our time-to-line speed to get cars retail-ready faster we gained something else that proved remarkably helpful.

We gained transparency and a trusted advisor for our fixed operations. Transparency meant we had not only broad insight into our recon landscape but now had insight into improvement opportunities on the ground.

We understand productivity: how many widgets can we fix within a specified time? A term new to the automotive business is transparency, providing advisors, parts personnel, and technicians, particularly internal mechanical, cosmetic/detail technicians, and the used car manager, with the data and information to enable better decisions about something – a repair approval, an equipment purchase, a staffing need, or adjustment to close a communications gap.

I see two significant areas managers sharing resources care about, the work environment and equipment:

# 1: Environment
Were funds and real estate unlimited, customer-pay and internal service would best be served by operating separately, even if staffed by separate personnel under one roof. Many dealerships continue carrying vehicle reconditioning mingled among the retail service environments. In our experience working with thousands of dealerships of all sizes, this situation is cumbersome and slows down vehicle reconditioning and thus the availability of vehicles for variable operations to sell.

One can add technician count, run teams, operate more hours, and sublet cars to beat the clock's restrictions. Improvement may result but consider the cost. Most technicians feel comfortable and most productive working within a specific groove or genre.

For example, retail technicians trained for a particular brand are best suited for working on those makes and models. Technicians having broader experience across OEM brands or those having worked in an independent operation or other used car environment will be more efficient and productive in handling internal repair needs.

In integrated shops, where technicians work on customer and internal repair orders, managing work gets even trickier because you manage that every day. Customer cars can wait a few hours or a day if parts are not readily available, but the GM and used car manager still expect their cars out of mechanical and into detail within a day or two. This conflicting demand for resource availability and the clock everyone races in can be a struggle.

I like to use the technician utilization model popular in body shops. A body shop has two insurance companies it works for and will typically schedule hours or slots for those companies daily while leaving two or three slots open daily in the schedule for non-insurance vehicles. With customer scheduling and reconditioning tracking software, you can easily see what is coming down the pipeline to properly prepare for the workload.

Building your schedule to allow for emergencies that come up as well. In any shop that emergency might be a used car, the sales manager needs ready for a 3 p.m. appointment or one just sold to an online buyer coming in that afternoon to do a final check walkaround.

As important as proper workload, it is imperative to ensure you are providing complete recommendations and estimates to your customers, whether they be the retail customer or your used car department. As a fixed operations manager, you will want to make sure the advisor and parts department reviews all approval estimates before the request for approval is made. For example, if a technician has recommended brake pad replacement only, without requesting time to resurface rotors or to replace them we may miss the opportunity to recommend the proper repair. The approver could always decline, but let's not neglect to legitimately suggest their approval.

It is not unusual, even at your shop, for techs to skip over opportunities like this example in customer or internal repairs. Not replacing or resurfacing those rotors is a lost labor hour opportunity for the service department and lost revenue for the parts department as well as a comeback situation due to brake vibration.

#2 – Equipment
Before we transition to this consideration, a point we all can agree on: It's a  reality that techs don't grow on trees and that management is shy to add new equipment.

Wise service managers know how to navigate around and through both limitations because customer-pay and internal work are critical to dealership success. Internal work is a constant in the service department, whereas retail service customers visit service every six months to once a year unless an issue with the vehicle brings them in more often.

Particularly for internal services, you can't afford unproductive assets. Techs must be able to turn wrenches so they and their bays can turn a profit. As we've noted, that outcome can be a challenge for a shop where either customer-pay demand is such that techs must be pulled from internal work to handle the customer load. Or, where internal techs can't get to their work because resources such as tire machines or alignment racks are being used by the retail techs.

How do you manage situations like this?

The best case would be a separate facility or offset reconditioning center and separate equipment for recon techs, who do more brake work in a week than retail will. The internal shop handling a monthly load of 150 to 200 cars will need at least two brake lathes, at least two tire machines, and balancers. In some high-performing internal shops – meaning they're supporting reconditioning needs by hitting a fast three-to-five-day time-to-line turn – I've seen them use old-school sign-up boards or even pieces of paper to "claim" use of the equipment at certain times of the day, coinciding when they will need that work done to complete their recon on the vehicle.

When I was service manager at a 70-tech shared shop with customer work and internal work, reconditioning over 200 cars a month, I, fortunately, had a shop foreman to manage such details as balancing resource needs to meet our production goals. Equipment issues come up all the time – either in the availability or function of the equipment. If a technician must wait for a piece of equipment or stop to fix it you lose valuable time, So, equipment resources must be considered because it promotes or stalls productivity and profitability

Before adding equipment or technicians, take a hard look at what's happening with personnel flow and equipment use. A lack of resources is often determined to be a workflow problem that can be corrected with little fuss or cost when evaluated and addressed. Having reconditioning software with robust reporting helped us pinpoint these roadblocks in our process so we could correct them and continue to move forward.

#3: Vehicle Sales
Robust reconditioning (meaning fast, accountable, and trackable) does more than get cars ready to be sold – it helps the Sales department turn vehicles quickly. Communications between fixed and variable are more important today than ever. I found it productive to hold weekly communications meetings with sales managers and the GM. All departments need to know the other's challenges and opportunities so transparency can lead to solutions. For instance, The Sales department (and BDC) would be much more understanding if they knew that service customer-pay was booked eight weeks out.

Communication and transparency among departments, including parts, is a critical advantage. Where communications and workflow transparency are in operation, concerns, and issues that could otherwise compromise appointments for tomorrow and used car recon workflow don't. Accommodations are more likely when everyone understands the other’s challenges: I know you're backed up. Can we get this in the shop tomorrow?

Jennifer has been active in automotive retail since the late '90s. She has been a service department manager, a used car reconditioning manager, and an accessories sales manager. She joined Rapid Recon as a performance manager for the specialized Recon Edge program in 2022.

About Rapid Recon

Reconditioning workflow automation from Rapid Recon is the industry standard in time-to-line inventory turn and speed-to-sale vehicle revenue enhancement for automotive retailers. Benchmarking data based on 13 million vehicles processed uniquely positions Rapid Recon to advise dealers on how to improve their store’s profitability. Used by more than 2,000 dealerships, Rapid Recon ensures the accountability of processes, property, and people. Hence, dealers know answers quickly, find assets anywhere, and sell vehicles promptly to grow dealership profitability. www.rapidrecon.com CALL US: +650-999-0497