Sect 3, Performance diagnostics

Section 3

Distributor Service Department Performance Diagnostics

3.1 Management and Supervision

3.3 Gross Profit Low

3.2 Direct Expenses, High

Performance Diagnostics

3.4 Indirect Expenses, High

3.5 Net Contribution, Low

Total Workshop Sales

Diagnostics Chart - 1:

Managerial,Supervisoryissues

Performance Diagnostics

3.1

3.1

Management and Supervision

Business Prospecting

3.1

Performance Diagnostics

Customer Relations

Service Department

Parts Department

Direct and Non-Direct Productive Staff

3.1.1

Business Prospecting

3.1

Performance Diagnostics

3.1.1

Business Prospecting

Reasons

Analyze True Potential?

3.1

Performance Diagnostics

Exploit Fleet Service?Customer Visits?

Customer Records?

Wrong Targets?

3.1.1

Business Prospecting

Actions

Proper Market Study

3.1

Performance Diagnostics

Service Contracts

Customer Visit Plans

Customer Data Base

SMART Targets

3.1.2

Poor Customer Relations

3.1

Performance Diagnostics

3.1.2

Poor Customer Relations

Reasons

Department Image?

3.1

Performance Diagnostics

Poor Work Standards?Customer Complaints?Customer Consent?

No Service Contracts?

3.1.2

Poor Customer Relations

Actions

Improve Overall Image

3.1

Performance Diagnostics

Improve Procedures

Complaints ProcedureReceipt Procedure

Various Contracts

3.1.3

Service Department

3.1

Performance Diagnostics

3.1.3

Service Department

Reasons

Productivity/Efficiency?

3.1

Performance Diagnostics

Improper Workflow?

Supervision?

Monitor Unsold Time?Improper Facilities?

3.1.3

Service Department

Actions

Increase Sales/Training

3.1

Performance Diagnostics

New Procedures

Management

Performance MonitoringReview Facilities

3.1.4

Parts Department

3.1

Performance Diagnostics

3.1.4

Parts Department

Reasons

Service to Workshop?

3.1

Performance Diagnostics

First Pick Availability?Pre-Planning?

Communication?

Retail More Important?

3.1.4

Parts Department

Actions

Change Attitude

3.1

Performance Diagnostics

Forecasting

Better Pre-planning

Communication

Biggest Customer

3.1.5

Direct and Non-Direct Productive

Staff

3.1

Performance Diagnostics

3.1.5

Direct and Non-Direct Productive

Staff

Reasons

Quality and Training?

3.1

Performance Diagnostics

Supervision?

Systematic Planning?Incentives, etc.?

Missed Service Sales?

3.1.5

Direct and Non-Direct Productive

Staff

Actions

Train or Replace

3.1

Performance Diagnostics

Management

Workshop Planning

Motivational SchemesBetter Inspections

Total Workshop

Sales

Direct Expenses

Diagnostics Chart - 2:

Managerial,Supervisoryissues

3.2

Performance Diagnostics

3.2

Direct Expenses, High

Unsold Time

3.2

Performance Diagnostics

Policy Adjustments

Consumables, Tools

3.2.1

Unsold Time

3.2

Performance Diagnostics

3.2.1

Unsold Time

Reasons

Workshop Planning?

3.2

Performance Diagnostics

Parts Supply?

Workshop Facilities?

Supervision?

Time Management?

3.2.1

Unsold Time

Reasons, cont’d

Service Marketing?

3.2

Performance Diagnostics

Pre-Planning?

Parts Forecasting?

Tools Not in Order?

Waiting Approvals?

3.2.1

Unsold Time

Reasons, cont’d

No Jobs?

3.2

Performance Diagnostics

Other Duties?

Training?

Redo as Unsold?

Goodwill as Unsold?

3.2.1

Unsold Time

Actions

Bill of Materials, BOMs

3.2

Performance Diagnostics

Parts Management

Review Facilities

Service ManagementCapture Relevant Data

3.2.1

Unsold Time

Actions, cont’d

Marketing Strategy

3.2

Performance Diagnostics

Systems/Procedures

Parts Forecasting

Tools Management

Approvals Process

3.2.1

Unsold Time

Actions, cont’d

Service Marketing

3.2

Performance Diagnostics

Proper Time Sheets

Training Plans

Improve Sold Quality

Correct Job Bookings

3.2.2

Policy Adjustments

3.2

Performance Diagnostics

3.2.2

Policy Adjustments

Reasons

Quality Assurance?

3.2

Performance Diagnostics

Warranty Recovery?

Customer Goodwill?

Labor on Accessories?Warranty Terms Info?

3.2.2

Policy Adjustments

Actions

Work Procedures

3.2

Performance Diagnostics

Warranty ManagementBook Cost Properly

Improve Quotations

Hand-Over Procedure

3.2.3

Consumables and Tools

3.2

Performance Diagnostics

3.2.3

Consumables and Tools

Reasons

Improper Control?

3.2

Performance Diagnostics

Purchase Agreements?Store Keeper?

Cost on Job Card?

Proper Charge?

3.2.3

Consumables and Tools

Actions

Proper Procedures

3.2

Performance Diagnostics

Purchase AgreementsStore Keeper

Proper Costing

Charge Rate Policy

Total Workshop

Sales

Gross Profit

Direct Expenses

Diagnostics Chart - 3:

Managerial,Supervisoryissues

3.3

Performance Diagnostics

3.3

Gross Profit Low

External Labor Sales

3.3

Performance Diagnostics

Warranty Labor SalesInternal Labor Sales

Sublet and Bought-Out

3.3.1

External Labor Sales

3.3

Performance Diagnostics

3.3.1

External Labor Sales

Reasons

Unbalanced Work Mix?

3.3

Performance Diagnostics

Customer Database?

Prospecting Customers?No Customer GoodwillTime to Sell

3.3.1

External Labor Sales

Actions

More External Sales

3.3

Performance Diagnostics

Create Database?

Prospect Customers

Customer Relations

Training

3.3.2

Warranty Labor Sales

3.3

Performance Diagnostics

3.3.2

Warranty Labor Sales

Reasons

Improper Diagnostics?

3.3

Performance Diagnostics

Warranty/Normal Job?Incomplete Claim?

Service Campaigns?

Low Efficiency?

3.3.2

Warranty Labor Sales

Actions

Training, Procedures

3.3

Performance Diagnostics

Decision Process

Claim Administration

Do All Campaigns

Supervision

3.3.3

Internal Labor Sales

3.3

Performance Diagnostics

3.3.3

Internal Labor Sales

Reasons

Sales Dept?

3.3

Performance Diagnostics

Internal Rates?

All Jobs Charged?

Job Authorization?

Units Over-Prepared?

3.3.3

Internal Labor Sales

Actions

Service a Profit Center

3.3

Performance Diagnostics

Uniform Rates

Specify All Jobs

Approvals Process

Set PDI Standards

3.3.4

Sublet and Bought-Out

3.3

Performance Diagnostics

3.3.4

Sublet and Bought-Out

Reasons

Manage Lube Oil Stock?

3.3

Performance Diagnostics

Negotiate Rates?

Late Invoices?

Job Authorization?

Scrap Management?

3.3.4

Sublet and Bought-Out

Actions

Oil Stock Procedures

3.3

Performance Diagnostics

Supply Agreements

Enforce Supplier SLA

Approvals Process

Scrap Sales Procedures

Total Workshop

Sales

Gross Profit

Direct Expenses

Indirect Expenses

Diagnostics Chart - 4:

Managerial,Supervisoryissues

3.4

Indirect Expenses High

Employee Expenses

3.4

Performance Diagnostics

After Sales Expenses

Admin Expenses

Depreciation Expenses

3.4.1

Employee Expenses

3.4

Performance Diagnostics

3.4.1

Employee Expenses

Reasons

Salary Levels?

3.4

Performance Diagnostics

Ratio Productive Staff?High Sick Leave?

Manage Attendance?

Poor Staff Quality?

3.4.1

Employee Expenses

Actions

HR Policy, Assessment

3.4

Performance Diagnostics

Ratio 3.5:1

Staff Management

Attitude

Training, Assessment

3.4.2

Aftersales Expenses

3.4

Performance Diagnostics

3.4.2

Aftersales Expenses

Reasons

Warranty Recovery?

3.4

Performance Diagnostics

Goodwill Repairs?

High Redo Level?

Warranty Terms?

Manage Ad Campaigns?

3.4.2

Aftersales Expenses

Actions

Warranty Procedures

3.4

Performance Diagnostics

Approvals Process

Repair Quality

Handover Process

Marketing Policy

3.4.3

Administrative Expenses

3.4

Performance Diagnostics

3.4.3

Administrative Expenses

Reasons

Manage Vehicle Fleet?

3.4

Performance Diagnostics

Expensive Rent?

Facilities Maintenance?Control of Utility Cost?Purchasing Policy?

3.4.3

Administrative Expenses

Actions

Proper Procedures

3.4

Performance Diagnostics

Negotiate Rent

Maintenance Policy

Review Utility Usage

Purchasing Policy

3.4.3

Depreciation Expenses

3.4

Performance Diagnostics

3.4.4

Depreciation Expenses

Reasons

Incorrect Policies?

3.4

Performance Diagnostics

Rent/Purchase Policy?Manage Fixed Assets?Manage Capex?

Insufficient Capex Budget?

3.4.4

Depreciation Expenses

Actions

Proper Policies

3.4

Performance Diagnostics

Decide Buy or Rent?

Asset Management

Capex Policy

Proper Capex Budget

Total Workshop

Sales

Gross ProfitNet

Contribution

Direct Expenses

Indirect Expenses

Diagnostics Chart - 5:

Managerial,Supervisoryissues

3.5

Performance Diagnostics

3.5

Net ContributionLow

Direct Expenses

3.5

Performance Diagnostics

Indirect Expenses

Service ManagementResource Optimization

3.5.1

Direct Expenses

3.5

Performance Diagnostics

3.5.1

Direct Expenses

Reasons

Cost Productive Staff?

3.5

Performance Diagnostics

High Unsold Time?

High Redo Level?

Manage Productive Staff?Manage Sublet/Bought-out?

3.5.1

Direct Expenses

Actions

Review HR Policy

3.5

Performance Diagnostics

Workshop ManagementRepair Quality

Supervision

Sublet/Bought-out Management

3.5.2

Indirect Expenses

3.5

Performance Diagnostics

3.5.2

Indirect Expenses

Reasons

Cost Non-Direct Productive Staff?

3.5

Performance Diagnostics

High Facilities Cost?

Manage Sundry Exp.?High Admin Expenses?Manage Depreciation?

3.5.2

Indirect Expenses

Action

Ratio Direct/Non-Direct

3.5

Performance Diagnostics

Maintenance Policy

Expense Policies

Cost Control

Depreciation Policies

3.5.3

Service Management

3.5

Performance Diagnostics

3.5.3

Service Management

Reasons

Manage Main KPIs?

3.5

Performance Diagnostics

Low Sales?

Staff Management?

Policies/Procedures?

Ratio Internal/External?

3.5.3

Service Management

Actions

Know Your KPIs

3.5

Performance Diagnostics

Sales Strategy

Supervision

Policies/Procedures

Increase External Sales

3.5.4

Resource Optimization

3.5

Performance Diagnostics

3.5.4

Resource Optimization

Reasons

Facilities Usage?

3.5

Performance Diagnostics

Low Productivity?

Low Efficiency?

Low Pre-Planning?

Improper Follow-up?

3.5.4

Resource Optimization

Actions

Facilities Optimization

3.5

Performance Diagnostics

Increase Sales

Training

Workshop ManagementCRM Policy

Total Workshop

Sales

Gross ProfitNet

Contribution

Direct Expenses

Indirect Expenses

Improvement Area

Diagnostics Chart - 6:

Managerial,Supervisoryissues

3.6

Improvement Areas

Productivity

3.6

Performance Diagnostics

Efficiency

Resource OptimizationService ManagementCost Control

3.6.1

Productivity

3.6

Performance Diagnostics

3.6.1

Productivity

Actions

Improve Management

3.6

Performance Diagnostics

Differentiated Labor Rate

Improve Skill Levels

Increase Pre-PlanningIncentive to Boost Sale

3.6.2

Efficiency

3.6

Performance Diagnostics

3.6.2

Efficiency

Actions

Skills Assessment

3.6

Performance Diagnostics

Tools and Equipment

Capture Actual Time

Improve Common JobsReview Work Procedure

3.6.3

Resource Optimization

3.6

Performance Diagnostics

3.6.3

Resource Optimization

Actions

Facilities Utilization

3.6

Performance Diagnostics

Productivity/EfficiencyRight Tools/EquipmentService Vehicle UsageAssessments

3.6.4

Service Management

3.6

Performance Diagnostics

3.6.4

Resource Optimization

Actions

Customer Prospecting

3.6

Performance Diagnostics

Customer Relations

Layouts/Workflows

Service Marketing

Manage KPI and Staff

3.6.5

Cost Control

3.6

Performance Diagnostics

3.6.5

Cost Control

Actions

Improve Attendance

3.6

Performance Diagnostics

Approvals ProceduresUpdate Facilities

Supply Agreements

Manage and Follow up

Workshop 3

Impact of Productivity and Efficiency on Bottom Line

3.6

Performance Diagnostics

Section 3 - Summary

Service Department Total Sales:

- Direct Expenses = Gross Profit

- Indirect Expenses

= Net Contribution