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Sewells Best Practise: Utilisation’s one thing, what about efficiency?

"Sales in a service workshop or bodyshop are sold hours multiplied by the hourly labour rate. So if you want to increase sales, you either have to increase the labour rate, or sell more hours.

But, s we said in the last issue of AM, increasing the labour rate could impact on sales volumes and customer satisfaction.

Increasing the hours sold is a viable option, but your workshop has to produce more hours There are only three ways to produce more sold hours – more productive employees, longer working hours or increased labour efficiency. The latter is always effective, and there is a lot you can do to help your productives to utilise their time better and work faster.

Labour utilisation is clearly important. If your service workshop productives attend 40 hours in a particular week, you should aim to have them working on paying jobs for at least 37 hours – utilisation of 92.5%. In a bodyshop, utilisation is usually less – around 85 to 87% – because of the way jobs are moved from one speciality to another. Non-productive time will be due to factors like rectification of faulty work, collection and delivery, cleaning and maintenance, and waiting for work. Increasing utilisation is thus a matter of minimising these areas of lost time, and the solutions are obvious.

Helping your productives to work faster is a bit more difficult. The benchmark for a service workshop is a productive efficiency of 125%, which means a job with a standard time of one hour is completed in 48 minutes. In a bodyshop, productive efficiency runs at 100-110%.

Your service workshop or bodyshop may achieve utilisation, but is less likely to sustain the benchmark for productive efficiency. We believe a bonus scheme is essential and should mean your productives will work at maximum effort. Other areas to look at include training to improve competency and, obviously, using the best people for any given job.

Workshop layout and equipment are also important factors – some dealerships provide loans so productives can buy more and better personal tools. Looking at ‘hidden lost time’ – delays like waiting for parts, which are not recorded. It is well worth studying all your work practices in detail.

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