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Section 3 Distributor Service Department Performance Diagnostics

Sect 3, Performance diagnostics

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How to evaluate your business, what to look for and what improvements can be done

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Page 1: Sect 3, Performance diagnostics

Section 3

Distributor Service Department Performance Diagnostics

Page 2: Sect 3, 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

Page 3: Sect 3, Performance diagnostics

Total Workshop Sales

Diagnostics Chart - 1:

Managerial,Supervisoryissues

Performance Diagnostics

3.1

Page 4: Sect 3, Performance diagnostics

3.1

Management and Supervision

Business Prospecting

3.1

Performance Diagnostics

Customer Relations

Service Department

Parts Department

Direct and Non-Direct Productive Staff

Page 5: Sect 3, Performance diagnostics

3.1.1

Business Prospecting

3.1

Performance Diagnostics

Page 6: Sect 3, Performance diagnostics

3.1.1

Business Prospecting

Reasons

Analyze True Potential?

3.1

Performance Diagnostics

Exploit Fleet Service?Customer Visits?

Customer Records?

Wrong Targets?

Page 7: Sect 3, Performance diagnostics

3.1.1

Business Prospecting

Actions

Proper Market Study

3.1

Performance Diagnostics

Service Contracts

Customer Visit Plans

Customer Data Base

SMART Targets

Page 8: Sect 3, Performance diagnostics

3.1.2

Poor Customer Relations

3.1

Performance Diagnostics

Page 9: Sect 3, 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?

Page 10: Sect 3, Performance diagnostics

3.1.2

Poor Customer Relations

Actions

Improve Overall Image

3.1

Performance Diagnostics

Improve Procedures

Complaints ProcedureReceipt Procedure

Various Contracts

Page 11: Sect 3, Performance diagnostics

3.1.3

Service Department

3.1

Performance Diagnostics

Page 12: Sect 3, Performance diagnostics

3.1.3

Service Department

Reasons

Productivity/Efficiency?

3.1

Performance Diagnostics

Improper Workflow?

Supervision?

Monitor Unsold Time?Improper Facilities?

Page 13: Sect 3, Performance diagnostics

3.1.3

Service Department

Actions

Increase Sales/Training

3.1

Performance Diagnostics

New Procedures

Management

Performance MonitoringReview Facilities

Page 14: Sect 3, Performance diagnostics

3.1.4

Parts Department

3.1

Performance Diagnostics

Page 15: Sect 3, Performance diagnostics

3.1.4

Parts Department

Reasons

Service to Workshop?

3.1

Performance Diagnostics

First Pick Availability?Pre-Planning?

Communication?

Retail More Important?

Page 16: Sect 3, Performance diagnostics

3.1.4

Parts Department

Actions

Change Attitude

3.1

Performance Diagnostics

Forecasting

Better Pre-planning

Communication

Biggest Customer

Page 17: Sect 3, Performance diagnostics

3.1.5

Direct and Non-Direct Productive

Staff

3.1

Performance Diagnostics

Page 18: Sect 3, 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?

Page 19: Sect 3, Performance diagnostics

3.1.5

Direct and Non-Direct Productive

Staff

Actions

Train or Replace

3.1

Performance Diagnostics

Management

Workshop Planning

Motivational SchemesBetter Inspections

Page 20: Sect 3, Performance diagnostics

Total Workshop

Sales

Direct Expenses

Diagnostics Chart - 2:

Managerial,Supervisoryissues

3.2

Performance Diagnostics

Page 21: Sect 3, Performance diagnostics

3.2

Direct Expenses, High

Unsold Time

3.2

Performance Diagnostics

Policy Adjustments

Consumables, Tools

Page 22: Sect 3, Performance diagnostics

3.2.1

Unsold Time

3.2

Performance Diagnostics

Page 23: Sect 3, Performance diagnostics

3.2.1

Unsold Time

Reasons

Workshop Planning?

3.2

Performance Diagnostics

Parts Supply?

Workshop Facilities?

Supervision?

Time Management?

Page 24: Sect 3, Performance diagnostics

3.2.1

Unsold Time

Reasons, cont’d

Service Marketing?

3.2

Performance Diagnostics

Pre-Planning?

Parts Forecasting?

Tools Not in Order?

Waiting Approvals?

Page 25: Sect 3, Performance diagnostics

3.2.1

Unsold Time

Reasons, cont’d

No Jobs?

3.2

Performance Diagnostics

Other Duties?

Training?

Redo as Unsold?

Goodwill as Unsold?

Page 26: Sect 3, Performance diagnostics

3.2.1

Unsold Time

Actions

Bill of Materials, BOMs

3.2

Performance Diagnostics

Parts Management

Review Facilities

Service ManagementCapture Relevant Data

Page 27: Sect 3, Performance diagnostics

3.2.1

Unsold Time

Actions, cont’d

Marketing Strategy

3.2

Performance Diagnostics

Systems/Procedures

Parts Forecasting

Tools Management

Approvals Process

Page 28: Sect 3, Performance diagnostics

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

Page 29: Sect 3, Performance diagnostics

3.2.2

Policy Adjustments

3.2

Performance Diagnostics

Page 30: Sect 3, Performance diagnostics

3.2.2

Policy Adjustments

Reasons

Quality Assurance?

3.2

Performance Diagnostics

Warranty Recovery?

Customer Goodwill?

Labor on Accessories?Warranty Terms Info?

Page 31: Sect 3, Performance diagnostics

3.2.2

Policy Adjustments

Actions

Work Procedures

3.2

Performance Diagnostics

Warranty ManagementBook Cost Properly

Improve Quotations

Hand-Over Procedure

Page 32: Sect 3, Performance diagnostics

3.2.3

Consumables and Tools

3.2

Performance Diagnostics

Page 33: Sect 3, 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?

Page 34: Sect 3, Performance diagnostics

3.2.3

Consumables and Tools

Actions

Proper Procedures

3.2

Performance Diagnostics

Purchase AgreementsStore Keeper

Proper Costing

Charge Rate Policy

Page 35: Sect 3, Performance diagnostics

Total Workshop

Sales

Gross Profit

Direct Expenses

Diagnostics Chart - 3:

Managerial,Supervisoryissues

3.3

Performance Diagnostics

Page 36: Sect 3, Performance diagnostics

3.3

Gross Profit Low

External Labor Sales

3.3

Performance Diagnostics

Warranty Labor SalesInternal Labor Sales

Sublet and Bought-Out

Page 37: Sect 3, Performance diagnostics

3.3.1

External Labor Sales

3.3

Performance Diagnostics

Page 38: Sect 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

Page 39: Sect 3, Performance diagnostics

3.3.1

External Labor Sales

Actions

More External Sales

3.3

Performance Diagnostics

Create Database?

Prospect Customers

Customer Relations

Training

Page 40: Sect 3, Performance diagnostics

3.3.2

Warranty Labor Sales

3.3

Performance Diagnostics

Page 41: Sect 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?

Page 42: Sect 3, Performance diagnostics

3.3.2

Warranty Labor Sales

Actions

Training, Procedures

3.3

Performance Diagnostics

Decision Process

Claim Administration

Do All Campaigns

Supervision

Page 43: Sect 3, Performance diagnostics

3.3.3

Internal Labor Sales

3.3

Performance Diagnostics

Page 44: Sect 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?

Page 45: Sect 3, Performance diagnostics

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

Page 46: Sect 3, Performance diagnostics

3.3.4

Sublet and Bought-Out

3.3

Performance Diagnostics

Page 47: Sect 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?

Page 48: Sect 3, Performance diagnostics

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

Page 49: Sect 3, Performance diagnostics

Total Workshop

Sales

Gross Profit

Direct Expenses

Indirect Expenses

Diagnostics Chart - 4:

Managerial,Supervisoryissues

Page 50: Sect 3, Performance diagnostics

3.4

Indirect Expenses High

Employee Expenses

3.4

Performance Diagnostics

After Sales Expenses

Admin Expenses

Depreciation Expenses

Page 51: Sect 3, Performance diagnostics

3.4.1

Employee Expenses

3.4

Performance Diagnostics

Page 52: Sect 3, 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?

Page 53: Sect 3, Performance diagnostics

3.4.1

Employee Expenses

Actions

HR Policy, Assessment

3.4

Performance Diagnostics

Ratio 3.5:1

Staff Management

Attitude

Training, Assessment

Page 54: Sect 3, Performance diagnostics

3.4.2

Aftersales Expenses

3.4

Performance Diagnostics

Page 55: Sect 3, Performance diagnostics

3.4.2

Aftersales Expenses

Reasons

Warranty Recovery?

3.4

Performance Diagnostics

Goodwill Repairs?

High Redo Level?

Warranty Terms?

Manage Ad Campaigns?

Page 56: Sect 3, Performance diagnostics

3.4.2

Aftersales Expenses

Actions

Warranty Procedures

3.4

Performance Diagnostics

Approvals Process

Repair Quality

Handover Process

Marketing Policy

Page 57: Sect 3, Performance diagnostics

3.4.3

Administrative Expenses

3.4

Performance Diagnostics

Page 58: Sect 3, 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?

Page 59: Sect 3, Performance diagnostics

3.4.3

Administrative Expenses

Actions

Proper Procedures

3.4

Performance Diagnostics

Negotiate Rent

Maintenance Policy

Review Utility Usage

Purchasing Policy

Page 60: Sect 3, Performance diagnostics

3.4.3

Depreciation Expenses

3.4

Performance Diagnostics

Page 61: Sect 3, 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?

Page 62: Sect 3, Performance diagnostics

3.4.4

Depreciation Expenses

Actions

Proper Policies

3.4

Performance Diagnostics

Decide Buy or Rent?

Asset Management

Capex Policy

Proper Capex Budget

Page 63: Sect 3, Performance diagnostics

Total Workshop

Sales

Gross ProfitNet

Contribution

Direct Expenses

Indirect Expenses

Diagnostics Chart - 5:

Managerial,Supervisoryissues

3.5

Performance Diagnostics

Page 64: Sect 3, Performance diagnostics

3.5

Net ContributionLow

Direct Expenses

3.5

Performance Diagnostics

Indirect Expenses

Service ManagementResource Optimization

Page 65: Sect 3, Performance diagnostics

3.5.1

Direct Expenses

3.5

Performance Diagnostics

Page 66: Sect 3, 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?

Page 67: Sect 3, Performance diagnostics

3.5.1

Direct Expenses

Actions

Review HR Policy

3.5

Performance Diagnostics

Workshop ManagementRepair Quality

Supervision

Sublet/Bought-out Management

Page 68: Sect 3, Performance diagnostics

3.5.2

Indirect Expenses

3.5

Performance Diagnostics

Page 69: Sect 3, 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?

Page 70: Sect 3, Performance diagnostics

3.5.2

Indirect Expenses

Action

Ratio Direct/Non-Direct

3.5

Performance Diagnostics

Maintenance Policy

Expense Policies

Cost Control

Depreciation Policies

Page 71: Sect 3, Performance diagnostics

3.5.3

Service Management

3.5

Performance Diagnostics

Page 72: Sect 3, Performance diagnostics

3.5.3

Service Management

Reasons

Manage Main KPIs?

3.5

Performance Diagnostics

Low Sales?

Staff Management?

Policies/Procedures?

Ratio Internal/External?

Page 73: Sect 3, Performance diagnostics

3.5.3

Service Management

Actions

Know Your KPIs

3.5

Performance Diagnostics

Sales Strategy

Supervision

Policies/Procedures

Increase External Sales

Page 74: Sect 3, Performance diagnostics

3.5.4

Resource Optimization

3.5

Performance Diagnostics

Page 75: Sect 3, Performance diagnostics

3.5.4

Resource Optimization

Reasons

Facilities Usage?

3.5

Performance Diagnostics

Low Productivity?

Low Efficiency?

Low Pre-Planning?

Improper Follow-up?

Page 76: Sect 3, Performance diagnostics

3.5.4

Resource Optimization

Actions

Facilities Optimization

3.5

Performance Diagnostics

Increase Sales

Training

Workshop ManagementCRM Policy

Page 77: Sect 3, Performance diagnostics

Total Workshop

Sales

Gross ProfitNet

Contribution

Direct Expenses

Indirect Expenses

Improvement Area

Diagnostics Chart - 6:

Managerial,Supervisoryissues

Page 78: Sect 3, Performance diagnostics

3.6

Improvement Areas

Productivity

3.6

Performance Diagnostics

Efficiency

Resource OptimizationService ManagementCost Control

Page 79: Sect 3, Performance diagnostics

3.6.1

Productivity

3.6

Performance Diagnostics

Page 80: Sect 3, 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

Page 81: Sect 3, Performance diagnostics

3.6.2

Efficiency

3.6

Performance Diagnostics

Page 82: Sect 3, Performance diagnostics

3.6.2

Efficiency

Actions

Skills Assessment

3.6

Performance Diagnostics

Tools and Equipment

Capture Actual Time

Improve Common JobsReview Work Procedure

Page 83: Sect 3, Performance diagnostics

3.6.3

Resource Optimization

3.6

Performance Diagnostics

Page 84: Sect 3, Performance diagnostics

3.6.3

Resource Optimization

Actions

Facilities Utilization

3.6

Performance Diagnostics

Productivity/EfficiencyRight Tools/EquipmentService Vehicle UsageAssessments

Page 85: Sect 3, Performance diagnostics

3.6.4

Service Management

3.6

Performance Diagnostics

Page 86: Sect 3, Performance diagnostics

3.6.4

Resource Optimization

Actions

Customer Prospecting

3.6

Performance Diagnostics

Customer Relations

Layouts/Workflows

Service Marketing

Manage KPI and Staff

Page 87: Sect 3, Performance diagnostics

3.6.5

Cost Control

3.6

Performance Diagnostics

Page 88: Sect 3, Performance diagnostics

3.6.5

Cost Control

Actions

Improve Attendance

3.6

Performance Diagnostics

Approvals ProceduresUpdate Facilities

Supply Agreements

Manage and Follow up

Page 89: Sect 3, Performance diagnostics

Workshop 3

Impact of Productivity and Efficiency on Bottom Line

3.6

Performance Diagnostics

Page 90: Sect 3, Performance diagnostics

Section 3 - Summary

Service Department Total Sales:

- Direct Expenses = Gross Profit

- Indirect Expenses

= Net Contribution