And the answer is always???
I believe that I possess exceptional root cause analytical skills and I will attempt to illustrate these in this posting.
I had the opportunity to perform a fixed operational audit on a foreign Original Equipment Manufacturer retail facility in the Near North of Ontario a few years ago and utilizing my analytical matrix I was able to observe the following aspects of the retail operation. And just so you know I always start with the business processes because they are the root cause of financial success or failure to meet expectations which I look at last!!!
Why? I believe in the work of W. Edwards Deming the Six Sigma Process Improvement Guru who simply stated that:
“85% of reasons for failure to meet client expectations are directly related to deficiencies in SYSTEMS AND PROCESSES………. rather than the EMPLOYEE?”
First thing of significant notation is that this retail facility was a brand-new state of the art signature franchise which had just opened a couple of months before my visit after being located in a smaller outdated facility for eight years in the same community.
It is one thing to have a state-of-the-art facility but something completely different to have a state-of-the-art fixed operations business model. As a physical facility it already possessed the best of the best in terms of size, layout, décor, equipment, drive thru, computers, etc.
Upon arriving I immediately began to sit down and interview in a soft and non-threatening way through intelligent listening, every single person in fixed operations, followed by the sales department and administrative support personnel to get a sense of their needs, concerns, perspectives and suggestions for parts, service or department process improvement.
Based on this feedback and a meeting with the OEM district service consultant as well as the district business manager for the dealer management system (DMS) there appeared to be some significant challenges that required urgent attention!!!
Appointment and Work Order Processes
Appointment coordinator is new and untrained with no understanding of the requirement for diagnosis time
Appointment coordinator does have access to VIN inquiry, but utilization is random
Appointment coordinator and technicians are utilizing available OEM supplied systems
Work orders requiring diagnosis are scheduled randomly by the DMS
Work order completion is based on the technician’s diagnosis
Utilization of the 15-step process to create excellent work orders is unknown to entire departments
Technicians are inconsistent in appropriate documentation of the 3 C’s (Concern, Cause, Correction)
Technician documentation does not demonstrate a strategic diagnostic approach
Jobs aids or related worksheets or Product Quality Reports (PQR) are not consistently referenced nor attached to the work order.
A random sample of one work order revealed no technician was logged on the work order. There were two outstanding recalls not added to the work order which consisted of a simple A service request with winter tire changeover to existing rims, windshield wiper blade change and a concern about wind noise at highway speeds requiring a test drive and diagnosis time??? A multi point vehicle inspection checklist was only partially filled out??? Both the service consultant and the technician simply checked the no recall box?
Customer Concerns, Comebacks and Customer Satisfaction Indexes
Only the retailer and the service team leader are truly aware of retail CSI scores
There is no specific designated person in charge of OEM customer concerns
Therefore, customer concerns are not being addressed
OEM customer concerns remain open indefinitely
Accountability with the OEM is a significant brand critical standard requirement
OEM customer concerns indicate workshop is overbooked especially in tire changeover season
Customers are waiting far too long for their vehicles to be serviced if they prefer to wait
Appointment coordinator position suffers from constant turnover and current employee is untrained and does not understand due process and due diligence
Parts Team Leader is an ineffective and inefficient one man show which is causing delays in parts pricing for estimates, timely parts availability for the technicians and workshop delays. Telephone handling availability is also a challenge for retail and wholesale parts sales.
Parts Team Leader is new with no OEM experience. He also has received no training in his role and responsibilities nor the dealer management system. Parts ordering, availability and pricing is behind leading to lower gross sales dollars
Retail team is not truly aware of CSI scores and acting appropriately
Service Team Leader was brand new as well
There is no existing customer concern escalation process or comeback tracking to hold service consultants and technicians accountable for their actions or lack thereof.
90% of the OEM customer concerns were tracked to one service consultant.
Technical Diagnostic Process
There is more than one OEM scan tool for every four technicians
There are no generic or obsolete scan tools being utilized
There is no off-site Bodyshop
Diagnostic trouble codes (DTC) lookup is being utilized but not by all technicians
Technicians were frustrated with the little box popup for messaging in their systems
Technician participation in OEM training is only 50-75%
Only one technician has achieved the complete mastery level of training
eLearning module completion is only 50-75% as well
PDI training module completion is only 50-75%
New vehicle model training is 75-100%
Five step diagnostic strategy training is N/A
Yet technicians are being paid appropriately for diagnosis???
Non-stock parts availability causes work orders to be closed
Back order parts cause work orders to be closed
There is a constant shortage of stock parts
Vehicle Pre-Delivery Inspection Processes
No battery charging process in place for retail lot inventory vehicles
PDI checklist utilized but no documentation for good battery testing or results
Road-tests/Re-PDI were being performed
OEM scan tools not being utilized and therefore no relearn procedure to ensure every new vehicle has the latest updated software
Tire pressure records not being utilized
VIN inquiries not being consistently utilized for outstanding campaigns, special policies and stop sale bulletins
PDI are completed by licensed technicians
Vehicle storage location is retailer lot
Wheel protection removed on all PDI’s.
Wheel lock nuts are required on all new lot inventory vehicles but there is no stock???
Paint protection removed on all PDI’s
Technical Team Leader
There is a shop foreman in place who is a very experienced technician who wishes to share his experience and help his team
Shop foreman has clear concise job description indicating his Quality Assurance role
Pay structure is not currently consistent with this role and is under negotiation
Shop foreman has high effectiveness and efficiency as a technician and leader
Applied versus unapplied time is tracked by the dealer management system
There is no Escalated Client Concern aka comeback tracking system in place which is reflected in OEM customer concerns not be addresses and left open
Dealer Management System, Computer/Internet Tools and Resources
A popular, reliable and well supported dealer management system is in place
Latest version of dealer management system
One computer per service consultant
One computer per technician
Latest version of all OEM software, tools, and equipment
There were database concerns related to employee name files and codes as well as confusion about in-service dates, warranty start dates and delivery dates
Basic reporting on all aspects of fixed operations was available
As always there were challenges with the client vehicle database for client retention and client experience management
Technical Shop Tools and Equipment
No complete equipment inventory list including make, model, serial number and last date of inspection of all shop tools and equipment found
Partial proof of inspection on some tools and equipment only because it was brand new and recently installed or re-installed in the new facility
Special tools and equipment tool cabinet was in good order and kept in parts department
Hunter GSP9700A dynamic wheel balancer on site but less than 50% of technicians trained on it
On car brake lathe on site and utilized
Compression & leak down tester provided by the dealer
Spark & NOID light provided by each technician
Wireless chassis ears were available
Hunter alignment machine available and in use – serviced every 6 months
Digital multimeter (DMM) testing available and utilized
Bartech 300 Pro scan tool available and up to date
OBD II SST troubleshooting tech tools available
Bench grinder was deemed unsafe due to lack of rests and eye protection
Leadership, Personnel and Training
Service Team Leader was new and just getting oriented to the needs of the business
Appointment Coordinator was new and untrained
Service consultants were experienced though only one was confident competent effective and efficient. The second consultant was responsible for 90% of the complaints to the OEM and those were left unaddressed.
Parts Team Leader works alone 6 days a week and takes care of technicians, retail and wholesale parts. He had received no training on the significant aspects of the dealer management system and the parts markup matrix and parts pricing was not up to date as well as challenging with retail pricing for oil being charged out by single litre bottle pricing when it is purchased in bulk as one specific example.
Another parts concern was the purchase of bulk windshield washer fluid versus 5 litre jugs???
The working relationship with the Sales Team Leader and the Used Vehicle Sales Team Leader were acrimonious, disrespectful, and uncooperative. I witnessed a number of incidents of serious concern in regards to the behaviour of these team leaders towards the service and parts team and one used vehicle incident of unethical immoral and negligently dangerous behaviour regarding a used car front subframe on a front wheel drive vehicle with rust perforation through and through!!!
Service, parts, and technical compensation plans were reviewed.
Appointment coordinator was paid hourly with a monthly bonus based on shop utilization.
Service Consultants were paid a flat monthly salary plus profit sharing based on client pay hours per work order, client satisfaction index, service policy, parts to client pay labour ratio and a client pay target bonus. A service consultant would have to be excellent in all categories in order to earn a reasonable income!
Training was sadly lacking across the whole fixed operations department from the technicians to the service consultants, to the appointment coordinator to the Parts Team Leader.
Environment, Health & Safety Analysis
There is an employee policy and procedures manual which is just a series of printed statements stapled together. It covers topics in order:
- Payroll policy
Tim’s Top Tip: You cannot coach to attitude??? You must coach to specific behaviours!!!
- Lunchroom environment and cleanliness
- Employee purchases
- Telephone Calls
- Driving customer and company vehicles/other lot damage
- Sales Commission Pay Plan Agreement
- Group benefits
- Retirement – mandatory
- General Health and Safety statement
- WHMIS – two-page description only
- Sexual Harassment – 3-page description
- Employee purchase plan
- Social responsibility regarding alcohol mostly, specific to company events
There were no records found of scheduled or completed training on environment, health, and safety
No WHMIS binder with all chemical products available in the parts department that were CURRENT
No transportation of dangerous goods (TDG) training record of scheduled or completion i.e. airbags
No proof of new Workplace Harassment and Violence policy and no record of scheduled or completed training on this new policy
There were concerns expressed about safety shoe purchases and employer subsidy
There were concerns expressed about the showers in the technicians change room and about the eye wash stations.
There was no evidence of weekly inspection reports on all aspects of the workshop
If you have read this far then the next few financial results will not be surprising in the least and for the sake of professional courtesy, I will not disclose the actual dollars amounts simply the percentage differences month to budget and month to previous year.
Category Current Year Previous year & month
Client pay labour sales = 38% below budget 38% below previous yr
Client pay hours = 38% below budget
Client pay work orders = 13% below budget 13% below previous yr
Warranty Labour = 8% below budget 15% below previous yr
Internal Labour = 13% below budget 9% below previous yr
Total Labour Sales = 32% below budget 37% below previous yr
Total Labour Hours = 33% below budget
Shop Utilization = 32% below budget
Parts to Labour Ratio = 6% below budget
Hours Per Work Order = 29% below budget 28% below previous yr
C.P. Effective Labour Rate = 11% above budget
C.P. Labour Gross Profit = 5% below budget
C.P. Parts Gross Profit = 2.7% below budget
Shop Supplies = 3% above budget
Policy = 100% above budget
Personnel = 19% below budget 41% below previous yr
Total Profit = -112% below budget
THE GOAL is always to create confident competent effective efficient and productive team members that leads to excellent job performance and increased profits
Hire new parts consultant, initiate immediate parts training and completion
Initiate and incent technicians to complete all OEM technical training requirements
Create and implement an Escalated Customer Concern tracking method and start closing OEM concerns
Initiate and complete appointment coordinator training!
Initiate and complete retraining for one Service Consultant or consider replacement
Initiate and complete Parts Team Leader training!