Sect 2 KPI's

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This section covers various KPIs for service, definitions, why they are important and how they impact your business

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Sect 2 KPI's

  1. 1. Profitable Distributor Service Management<br />Make Your Service Department the Driver of Your Dealership<br />
  2. 2. Key Performance Indicators<br />Distributor Service Department Key Performance Indicators (KPIs) Definitions and Reasons For Deviations<br />Section 2<br />
  3. 3. Key Performance Indicators<br />2.1 Why KPI?<br />2.2 Time to Sell<br />2.3 KPI, Definitions, Impact, Reasons for Deviations and Actions<br />2.4 5 x Super KPIs<br />
  4. 4. 2.1<br />Key Performance Indicators<br />Section 2.1<br />Why KPI?<br />
  5. 5. 2.1<br />Key Performance Indicators<br />Uniform Snapshot of Department Performance<br />
  6. 6. 2.1<br />Key Performance Indicators<br />Enables Performance Health Checks <br />
  7. 7. 2.1<br />Key Performance Indicators<br />Forces the Department to Capture All Relevant Data<br />
  8. 8. 2.1<br />Key Performance Indicators<br />Will Enable Correct Measurement of Progress Made<br />
  9. 9. 2.1<br />Key Performance Indicators<br />“The beginning of wisdom is to call things by their right names”<br />Chinese Proverb<br />Know Your KPIs!<br />Food For Thought:<br />
  10. 10. 2.2<br />Key Performance Indicators<br />Section 2.2<br />Time to Sell<br />
  11. 11. 2.2<br />Key Performance Indicators<br />Total Calendar Time<br />Productive Time<br />Total Available Time <br />Improvement Area<br />Sick leave, vacation, unauthorized absence<br />Unsold time:<br />Idle time<br />Other unsold time<br />
  12. 12. 2.2<br />Key Performance Indicators<br />“Work Expands to Fill the Time For Its Completion”<br />Cyril Northcote Parkinson, 1909-1993<br />Parkinson’s Law #1:<br />
  13. 13. 2.2<br />Key Performance Indicators<br />“Expenditures Rise to Meet Income”<br />Cyril Northcote Parkinson, 1909-1993<br />Parkinson’s Law #2:<br />
  14. 14. 2.3<br />Key Performance Indicators<br />Distributor Service Department Key Performance Indicators, KPI<br />Section 2.3<br />
  15. 15. 2.3<br />Key Performance Indicators<br />2.3.1<br />Technicians Availability Against Calendar Time, %<br />
  16. 16. 2.3<br />Key Performance Indicators<br />Technician’s attendance hours/Theoretical calendar time = Technicians Availability, %<br />Target >87%<br />2.3.1<br />Technician’s Availability Against Calendar Time, %<br />Definition<br />
  17. 17. 2.3<br />Key Performance Indicators<br />2.3.1<br />Technician’s Availability Against Calendar Time, %<br />Impacts<br />Total Hours to Sell<br />Turnover<br />Profit<br />
  18. 18. 2.3<br />Key Performance Indicators<br />Management?<br />2.3.1<br />Technician’s Availability Against Calendar Time, %<br />Reasons<br />Time Management?<br />Follow Up Attendance?<br />Dissatisfaction?<br />“Ownership”?<br />
  19. 19. 2.3<br />Key Performance Indicators<br />Awareness<br />2.3.1<br />Technician’s Availability Against Calendar Time, %<br />Actions<br />Attitude<br />Care<br />Educate<br />Ownership<br />
  20. 20. 2.3<br />Key Performance Indicators<br />2.3.2<br />Technicians Productivity, %<br />
  21. 21. 2.3<br />Key Performance Indicators<br />Technician’s Sold Time/Technician’s Attendance Time = Technicians Productivity, %<br />Target >85-90%<br />2.3.2<br />Technician’s Productivity, %<br />Definition<br />
  22. 22. 2.3<br />Key Performance Indicators<br />2.3.2<br />Technician’s Productivity, %<br />Impacts<br />Turnover<br />Margins<br />Net Profit<br />
  23. 23. 2.3<br />Key Performance Indicators<br />Low Sales?<br />2.3.2<br />Technician’s Productivity, %<br />Reasons<br />Management?<br />Awareness, Hrs to sell?<br />Pre-planning?<br />Workshop layout<br />
  24. 24. 2.3<br />Key Performance Indicators<br />Workshop Maintenance<br />2.3.2<br />Technician’s Productivity, %<br />Reasons, Cont’d<br />Parts Availability?<br />Skill levels?<br />Incentive systems?<br />Management System?<br />
  25. 25. 2.3<br />Key Performance Indicators<br />Increase Sales<br />2.3.2<br />Technician’s Productivity, %<br />Actions<br />Awareness<br />Attitude<br />Pre-plan<br />Management<br />
  26. 26. 2.3<br />Key Performance Indicators<br />2.3.3<br />Technicians Efficiency, %<br />
  27. 27. 2.3<br />Key Performance Indicators<br />Technician’s AllottedTime/ Technician’s UsedTime = Technicians Efficiency, %<br />Target >100%<br />2.3.3<br />Technician’s Efficiency, %<br />Definition<br />
  28. 28. 2.3<br />Key Performance Indicators<br />Turnover<br />2.3.3<br />Technician’s Efficiency, %<br />Impacts<br />Bay Utilization<br />Margins<br />Net Profit<br />Turnaround Time<br />
  29. 29. 2.3<br />Key Performance Indicators<br />Skill Match?<br />2.3.3<br />Technician’s Efficiency, %<br />Reasons<br />Complex, Frequency?<br />Non-Productive Time?<br />Wrong Method?<br />More Than Required?<br />
  30. 30. 2.3<br />Key Performance Indicators<br />Separate Operations?<br />2.3.3<br />Technician’s Efficiency, %<br />Reasons, Cont’d<br />Availability, Manuals?<br />Improper Procedures?<br />Supervision?<br />Job Planning?<br />
  31. 31. 2.3<br />Key Performance Indicators<br />Workshop Layout?<br />2.3.3<br />Technician’s Efficiency, %<br />Reasons, Cont’d<br />Tool Maintenance?<br />Climate/Environment?<br />2 Technicians not 1?<br />Lack of Training?<br />
  32. 32. 2.3<br />Key Performance Indicators<br />Improve Supervision<br />2.3.3<br />Technician’s Efficiency, %<br />Actions<br />Better Planning<br />Correct Job cards<br />Education<br />Awareness/Attitude<br />
  33. 33. 2.3<br />Key Performance Indicators<br />2.2.4<br />Recovery Rate on Technician’s Available Time, Money/hr<br />
  34. 34. 2.3<br />Key Performance Indicators<br />Total Labor Sales/Total Available Time = Recovery Rate, Money/hr<br />Target: 3-4 x cost direct productives<br />2.3.4<br />Recovery Rate on Technician’s Available Time, Money/hr<br />Definition<br />
  35. 35. 2.3<br />Key Performance Indicators<br />Turnover<br />2.3.4<br />Recovery Rate on Technician’s Available Time, Money/hr<br />Impacts<br />Margins<br />Net Profit<br />Required Charge Rate<br />Break-even level<br />
  36. 36. 2.3<br />Key Performance Indicators<br />Attendance?<br />2.3.4<br />Recovery Rate on Technician’s Available Time, Money/hr<br />Reasons<br />Productivity?<br />Efficiency?<br />Internal/External?<br />Management?<br />
  37. 37. 2.3<br />Key Performance Indicators<br />Improve Attendance<br />2.3.4<br />Recovery Rate on Technician’s Available Time, Money/hr<br />Actions<br />Improve Productivity<br />Improve Efficiency<br />Increase External Sales<br />Manage and Coach<br />
  38. 38. 2.3<br />Key Performance Indicators<br />Attendance, Productivity and Efficiency, How They Impact Turnover and Gross Margin<br />Workshop 2<br />
  39. 39. 2.3<br />Key Performance Indicators<br />2.3.5<br />Technician’s Unsold Time, %<br />
  40. 40. 2.3<br />Key Performance Indicators<br />Technician’s Non-productive time/Total Attendance Time = Technician’s Unsold Time, %<br />Target <10-15%<br />2.3.5<br />Technician’s Unsold Time, %<br />Definition<br />
  41. 41. 2.3<br />Key Performance Indicators<br />Turnover<br />2.3.5<br />Technician’s Unsold Time, %<br />Impacts<br />Margins<br />Net Profit<br />Required Charge Rate<br />Break-even level<br />
  42. 42. 2.3<br />Key Performance Indicators<br />Low Sales<br />2.3.5<br />Technician’s Unsold Time, %<br />Reasons<br />Management?<br />Awareness, Hrs to Sell?<br />Pre-planning?<br />Workshop Lay-out<br />
  43. 43. 2.3<br />Key Performance Indicators<br />Increase Sales<br />2.3.5<br />Technician’s Unsold Time, %<br />Actions<br />Awareness<br />Attitude<br />Pre-plan<br />Management<br />
  44. 44. 2.3<br />Key Performance Indicators<br />2.3.6<br />Work-bay Utilization in % of Potential<br />
  45. 45. 2.3<br />Key Performance Indicators<br />Sold hours per work bay divided by total available hours to sell per work bay = work bay utilization, %.<br />Target >90%<br />2.3.6<br />Work-bay Utilization in % of Potential<br />Definition<br />
  46. 46. 2.3<br />Key Performance Indicators<br />Turnover<br />2.3.6<br />Work-bay Utilization in % of Potential<br />Impacts<br />Margins<br />Net Profit<br />Sales Potential<br />Expansion Plans<br />
  47. 47. 2.3<br />Key Performance Indicators<br />Pre-planning?<br />2.3.6<br />Work-bay Utilization in % of Potential<br />Reasons<br />Units Waiting For Parts?<br />Productivity/Efficiency?<br />Admin Process?<br />Supervision?<br />
  48. 48. 2.3<br />Key Performance Indicators<br />Service Marketing?<br />2.3.6<br />Work-bay Utilization in % of Potential<br />Reasons, cont’d<br />Workshop Layout?<br />Cleanliness?<br />24/7 Operation?<br />Low Skill Levels?<br />
  49. 49. 2.3<br />Key Performance Indicators<br />Workflows<br />2.3.6<br />Work-bay Utilization in % of Potential<br />Actions<br />Parts Planning<br />Training<br />Clean up Workshop<br />Management<br />
  50. 50. 2.3<br />Key Performance Indicators<br />Marketing Plan<br />2.3.6<br />Work-bay Utilization in % of Potential<br />Actions, cont’d<br />Supervision<br />Customer Interaction<br />Workshop Layout<br />Extend Operating Hrs <br />
  51. 51. 2.3<br />Key Performance Indicators<br />2.3.7<br />Gross Profit on Own Labor, %<br />
  52. 52. 2.3<br />Key Performance Indicators<br />Total Labor Sales less Direct Expenses for own productive staff = Labor Gross Profit<br />Target 65-80%<br />2.3.7<br />Gross Profit on Own Labor, %<br />Definition<br />
  53. 53. 2.3<br />Key Performance Indicators<br />Net Profit<br />2.3.7<br />Gross Profit on Own Labor, %<br />Impacts<br />Break-even level<br />Required Charge Rates<br />Expansion Plans<br />Investments<br />
  54. 54. 2.3<br />Key Performance Indicators<br />Productivity?<br />2.3.7<br />Gross Profit on Own Labor, %<br />Reasons<br />Efficiency?<br />Unrealistic Salary?<br />Labor Rate?<br />Internal/External?<br />
  55. 55. 2.3<br />Key Performance Indicators<br />Service Marketing<br />2.3.7<br />Gross Profit on Own Labor, %<br />Actions<br />Training<br />Differentiate Charges<br />Supervision<br />Procedures<br />
  56. 56. 2.3<br />Key Performance Indicators<br />2.3.8<br />Workshop Direct Expenditures<br />
  57. 57. 2.3<br />Key Performance Indicators<br />Includes personnel expenditures for Technicians (salary, HRA, visa cost, vacation package, health insurance, etc.)<br />Target 20-35%<br />2.3.8<br />Workshop Direct Expenditures<br />Definition<br />
  58. 58. 2.3<br />Key Performance Indicators<br />Margins<br />2.3.8<br />Workshop Direct Expenditures<br />Impacts<br />Break-even level<br />Required Charge Rates<br />Net Profit<br />Indirect Expenses<br />
  59. 59. 2.3<br />Key Performance Indicators<br />Salary Level?<br />2.3.8<br />Workshop Direct Expenditures<br />Reasons<br />Overtime, Sick Leave?<br />Budget?<br />Management?<br />Follow up KPI?<br />
  60. 60. 2.3<br />Key Performance Indicators<br />Differentiate Charges<br />2.3.8<br />Workshop Direct Expenditures<br />Actions<br />Attendance<br />Realistic Budget<br />Supervision<br />Management<br />
  61. 61. 2.3<br />Key Performance Indicators<br />2.3.9<br />Workshop Indirect Expenditures<br />
  62. 62. 2.3<br />Key Performance Indicators<br />Costs which can not be directly allocated towards a specific job such as rent, entertainment, head office expenses, etc.<br />Target <35% <br />2.3.9<br />Workshop Indirect Expenditures<br />Definition<br />
  63. 63. 2.3<br />Key Performance Indicators<br />Net Profit<br />2.3.9<br />Workshop Indirect Expenditures<br />Impacts<br />Required Charge Rates<br />Investments<br />Break-even Level<br />Company Future<br />
  64. 64. 2.3<br />Key Performance Indicators<br />Management?<br />2.3.9<br />Workshop Indirect Expenditures<br />Reasons<br />No Control?<br />Budget?<br />Supply Agreements?<br />In Expansion Mode?<br />
  65. 65. 2.3<br />Key Performance Indicators<br />Procedures<br />2.3.9<br />Workshop Direct Expenditures<br />Actions<br />Controls<br />Realistic Budget<br />Supply Agreements<br />Delegation<br />
  66. 66. 2.3<br />Key Performance Indicators<br />2.3.10<br />Service Department Net Contribution, %<br />
  67. 67. 2.3<br />Key Performance Indicators<br />Total Sales – Direct Expenses – Indirect Expenses = Net Profit<br />Net Profit/Total Sales = Net Profit %<br />Target 25-30%<br />2.3.10<br />Service Department Net Contribution, %<br />Definition<br />
  68. 68. 2.3<br />Key Performance Indicators<br />Company Performance<br />2.3.10<br />Gross Profit on Own Labor, %<br />Impacts<br />Expansion Plans<br />Investments<br />Company Future<br />Future Bonus, etc.<br />
  69. 69. 2.3<br />Key Performance Indicators<br />Sales, Charge Rates?<br />2.3.10<br />Gross Profit on Own Labor, %<br />Reasons<br />Direct Expenses?<br />Productivity/Efficiency?<br />Internal/External?<br />Profit Generator?<br />
  70. 70. 2.3<br />Key Performance Indicators<br />Price Management<br />2.3.10<br />Gross Profit on Own Labor, %<br />Actions<br />Salary Levels<br />Supervision<br />Management<br />Service Marketing<br />
  71. 71. 2.3<br />Key Performance Indicators<br />2.3.11<br />Spare Parts Sales Through Own Workshop, %<br />
  72. 72. 2.3<br />Key Performance Indicators<br />Sales of Spare Parts Through Own Workshop/ Total Sales of Spare Parts = Sales in %<br />Target 30-70%<br />2.3.11<br />Spare Parts Sales Through Own Workshop, %<br />Definition<br />
  73. 73. 2.3<br />Key Performance Indicators<br />Company Performance<br />2.3.11<br />Spare Parts Sales Through Own Workshop, %<br />Impacts<br />Turnover<br />Margins<br />Net Profit<br />Company Reputation<br />
  74. 74. 2.3<br />Key Performance Indicators<br />Favor Counter Sales?<br />2.3.11<br />Spare Parts Sales Through Own Workshop, %<br />Reasons<br />Workshop Discount?<br />Contracts, Combos?<br />Service Marketing?<br />Profit Generator?<br />
  75. 75. 2.3<br />Key Performance Indicators<br />Discount Management<br />2.3.11<br />Spare Parts Sales Through Own Workshop, %<br />Actions<br />Contracts and Combos<br />Structured Marketing<br />Management<br />Customer Satisfaction<br />
  76. 76. 2.3<br />Key Performance Indicators<br />2.3.12<br />External Workshop Sales Versus Internal, %<br />
  77. 77. 2.3<br />Key Performance Indicators<br />Sales of External Jobs/ Total Workshop Sales = External Sales in %<br />Target 80%<br />2.3.12<br />External Workshop Sales Versus Internal, %<br />Definition<br />
  78. 78. 2.3<br />Key Performance Indicators<br />Turnover<br />2.3.12<br />External Workshop Sales Versus Internal, %<br />Impacts<br />Margins<br />Net Profit<br />Service Penetration<br />Company Performance<br />
  79. 79. 2.3<br />Key Performance Indicators<br />Service Marketing?<br />2.3.12<br />External Workshop Sales Versus Internal, %<br />Reasons<br />Workshop Discount?<br />Contracts, Combos?<br />Manage KPIs?<br />Profit Generator?<br />
  80. 80. 2.3<br />Key Performance Indicators<br />Management<br />2.3.12<br />External Workshop Sales Versus Internal, %<br />Actions<br />Structured Marketing<br />Add Value<br />Contracts and Combos<br />Customer Satisfaction<br />
  81. 81. 2.3<br />Key Performance Indicators<br />2.3.13<br />Redo Work in Percent of Total Workshop Sales<br />
  82. 82. 2.3<br />Key Performance Indicators<br />Redo Sales, parts and labor/ Total Workshop Sales, parts and labor = Redo in %<br />Target <1%<br />2.3.13<br />Redo Work in Percent of Total Workshop Sales<br />Definition<br />
  83. 83. 2.3<br />Key Performance Indicators<br />Productivity<br />2.3.13<br />Redo Work in Percent of Total Workshop Sales<br />Impacts<br />Margins<br />Net Profit<br />Customer Satisfaction<br />Company Reputation<br />
  84. 84. 2.3<br />Key Performance Indicators<br />Training?<br />2.3.13<br />Redo Work in Percent of Total Workshop Sales<br />Reasons<br />Diagnostics?<br />Definition of Work?<br />Supervision?<br />Wrong Technician?<br />
  85. 85. 2.3<br />Key Performance Indicators<br />Staff Development<br />2.3.13<br />Redo Work in Percent of Total Workshop Sales<br />Actions<br />Proper Procedures<br />Management<br />Proper Tools<br />RTFM<br />
  86. 86. 2.3<br />Key Performance Indicators<br />2.3.14<br />Time, Vehicle In to Invoice Out<br />
  87. 87. 2.3<br />Key Performance Indicators<br />Time elapsed from vehicle arrives to workshop until invoice is issued and sent.<br />Target: 1 workday after technical completion<br />2.3.14<br />Time, Vehicle In to Invoice Out<br />Definition<br />
  88. 88. 2.3<br />Key Performance Indicators<br />Cash Flow<br />2.3.14<br />Time, Vehicle In to Invoice Out<br />Impacts<br />Margins<br />Net Profit<br />Productivity/Efficiency<br />Company Reputation<br />
  89. 89. 2.3<br />Key Performance Indicators<br />Pre-Planning?<br />2.3.14<br />Time, Vehicle In to Invoice Out<br />Reasons<br />Parts Availability?<br />Procedures?<br />Customer Approvals?<br />Supervision?<br />
  90. 90. 2.3<br />Key Performance Indicators<br />Better Pre-Planning<br />2.3.14<br />Time, Vehicle In to Invoice Out<br />Actions<br />Parts Forecasting<br />Detailed Procedures<br />Approvals Process<br />Management<br />
  91. 91. 2.4<br />Key Performance Indicators<br />Section 2.4<br />5 x Super KPIs<br />
  92. 92. 2.4<br />Key Performance Indicators<br />Recovery Rate/ Calendar Hr<br />Parts Sales Through Workshop<br />Work-bay Utilization, %<br />Redo Work Versus Total Sales, %<br />Time, Vehicle In to Invoice Out<br />
  93. 93. 2.4<br />Key Performance Indicators<br />Charge Rate(s)/Hr<br />Attendance<br />Recovery Rate/ Calendar Hr<br />Covers:<br />Productivity<br />Efficiency<br />Internal vs. External<br />
  94. 94. 2.4<br />Key Performance Indicators<br />Gives an Indication of Total Growth Potential For the Workshop<br />Parts Sales Through Workshop vs. Total Parts Sales<br />
  95. 95. 2.4<br />Key Performance Indicators<br />Gives an Indication of Growth Potential Within Existing Premises<br />Work-bay Utilization Versus Potential<br />
  96. 96. 2.4<br />Key Performance Indicators<br />Gives an Indication of Total Repair Quality of the Workshop<br />Redo Work Versus Total Workshop Sales<br />
  97. 97. 2.4<br />Key Performance Indicators<br />Approval Process<br />Management<br />Time, Vehicle In to Invoice Out<br />Covers:<br />Productivity/Efficiency<br />Parts Availability<br />Admin Procedures<br />
  98. 98. Key Performance Indicators<br />Measure Performance<br />Capture Relevant Data<br />Section 2, Summary<br />Uniform Snap Shot<br />Correct Decisions<br />Measures Trends<br />

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