Reduce Lost Time and Increase Profitability

The LEAN Dealer reduces lost time and increases profitability.

Focusing on lost time and waiting may be one of the best ways to save your dealership money. Checking up on lost time in the shop, parts department or when making and receiving deliveries may help you implement some powerful cost-saving procedures. Those same cost-saving procedures could very well keep you out of the red come the end of the year.

Looking for those areas of the business that create lost time can be a challenge. “It’s a full-time job and I’m doing it every day,” says Tom Rigg of Rigg’s Outdoor Power Equipment (four stores in Indiana: Valparaiso, LaPorte, Mishawaka and Lafayette). “It’s an ongoing situation. Our employees have been making suggestions and finding better ways to use their time.”

Evaluating Processes

Working with employees to evaluate their work processes and find new, LEAN ways to do things, or eliminate unnecessary tasks altogether, can help reduce lost time. “We meet every Wednesday and break down our 34 employees into groups,” explains Lynn Pesson of Southland Engine in Lafayette and Iberia, LA. “Every week we look at different processes for doing things.”

Each group of Pesson’s employees sets a goal for the quarter to reduce costs in one area of the dealership, and then comes up with a plan to make it happen. Pesson decided to involve his employees in the process so they would feel involved and vested in the business’ success.

“I told my staff to quit worrying about sales and start worrying about costs,” says Pesson. “Every employee has changed their mindset, thinking about the cost side. Before, they were concerned about sales being off, but now they are focusing on something they can actually control. Economy and weather you cannot control—costs you can. People are actually excited about what they are doing again.”

If employees are ready and willing to get involved, having the right tools can help. Jeff Haefner of Ideal Computer Systems suggests dealers have each of their employees do an exercise to discover where they are wasting time. “I’ve always found the best way to eliminate those time bandits is to have each employee do a time study,” says Haefner. “Each employee fills out a time log of everything they do throughout the day, categorizing tasks and adding up the time it takes to do them.”

Haefner says dealers will be amazed at how much time is spent on certain things. After doing the exercise, they can figure out how to improve efficiency in those areas.

“They’ll discover time lost in the service department waiting on parts, lost time in the parts department waiting on parts and equipment from manufacturers, and lost time with customers waiting on equipment repairs,” Haefner adds. “It can all be reduced.”

Service Department

Working to reduce service department downtime can be easy with the help of a software program that effortlessly assigns repair jobs to techs, and manages them throughout the process. c-Systems Software features a shop scheduler that looks similar to an Outlook calendar. Work orders are entered into the system where a shop manager can easily assign them to technicians. The color-coding illustrates the progress made on a job, the mechanic working on it, and if parts are on order.

“It’s visually appealing and simple enough for the shop manager to know the status in an instant,” explains Joe Miller of c-Systems. “They are able to schedule jobs for a particular time and day desired, can move them between mechanics, and put them in order according to priority.” Techs can keep moving through projects, getting repaired equipment to the customer that much faster.

Parts Management

Part of the challenge of working quickly in the shop, with little or no waiting, is getting the parts necessary for the repair when you need them. “Our parts department is focusing on processes more than anything else,” explains Pesson. “They receive and ship parts, deliver to techs—all things important to our success.”

Pesson has implemented a handheld parts ordering system, which reduces paper usage and costs as well as helps the parts managers easily stay on top of things. “Parts managers are now working with palm pilots that really speed up and simplify things,” says Pesson. “Mechanics place parts orders on the computer at their workstation, which are sent through to the palm pilots to notify parts managers. The manager then pulls the parts and brings them to where they are needed.”

Parts department employees move quickly to complete orders without the stopping action of waiting at a printer for a parts order ticket to print. “They are constantly on the move, so when a parts order is placed and their palm pilot rings, it’s always in their pocket,” says Pesson. “It makes them more efficient because they can be doing anything anywhere and move on to their next project right away.”

Some software programs can also help save a great deal of time and effort. They are designed to take the thought process out of parts stocking and ordering. With c-Systems Software, when a service order is entered into the computer and a part needed for the repair is not in stock, it is automatically put on a list of suggested parts to order.

“The person who does the parts ordering literally just runs a suggested orders list that shows what is needed for what job,” explains Miller. “Everything is color-coded by what needs to be ordered, what’s been ordered and what has been received. They know immediately whom it goes to so it can be distributed properly.”

Ideal offers a similar system and notes its effectiveness. “Having this instant visibility allows you to make better ordering decisions, improve inventory control, and decide what to do with parts that customers want to buy,” explains Haefner. “Running out of parts causes your techs to waste time and sit on repairs longer, also frustrating customers because it adds to their wait time.”

Customer Satisfaction

Cutting costs to keep the business profitable is important and effective, but it is the customers who come in to purchase goods and services that keep you in business. That is why it is important that you don’t let cost-cutting get in the way of customer satisfaction.

Many dealership employees spend the better part of their workday talking to customers and answering questions about service orders. It is a necessary service to the customer that takes up a lot of time. That is why c-Systems introduced their Customer Connect feature.

“It’s a major time-saver that offers customers real-time status reviews,” explains Miller. “Customers are given a login by their dealer, allowing them to log into the website through the business system and view their account online—and the dealer or employee never has to answer a phone call.”

Customers can also view their repair status instantly without waiting on the phone while a dealership employee looks up their information. “It’s a win for both the customer and the dealer,” says Miller. “The dealer has more time to do other things. If they do have to look up the information, it is right there at their fingertips.”

Pickup and Delivery

Another necessary service is equipment delivery. Many dealers have assessed delivery charges and reworked their routes to save time and money. “We have become stricter about where we go each day,” says Rigg. “We try to haul at least four pieces of equipment and come back with some as well, getting more mileage out of the trip.”

For most dealers the trick is to make fewer runs with more equipment. For Pesson it is about when to make the trips. “Our repairs are only picked up 24 hours before we are going to work on them,” explains Pesson. “We put it into our system that schedules it for the shop. Once we see in the system that they will be worked on within 24 hours, we schedule a pickup.” This means equipment spends less time stored at the dealership and out of the customers’ hands.

“People aren’t going to care when they call, they are only going to care about when we pick it up,” says Pesson. Picking up equipment only when you are ready to work on it reduces the customer’s wait time.

Payroll in Check

Some dealers, after reassessing processes, discover they are overstaffed and opt to change staff hours and reduce staff size. “Our service department no longer works on Saturdays, and instead starts 30 minutes earlier each day during the week,” says Pesson. “This has helped me to cut overtime greatly. The hours they have picked up during the week are more efficient, because each tech is responsible for doing one more lawnmower a day.”

Rigg has been doing more with less. “We are trying to get the guys we have to do more, cross-training so we won’t have to hire somebody to do the special jobs,” he explains.

In their downtime, Rigg’s people do cleaning around the dealership, along with equipment setup—something he used to have a part-time employee designated for. Rigg keeps his staff busy but allows no overtime.

Looking for and reducing wasted time can help you control costs and stay profitable. Cost-saving measures can be powerful, but shouldn’t get in the way of customer satisfaction. Review all of the installments in our LEAN series to see other ways you can operate LEAN and remain a successful and profitable dealer.

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