Dealership service departments have routinely used data to measure what works and what doesn't in their operations. But the effective use of numbers to help steer fixed ops decisions is even more crucial to pull some service departments out of a deep hole created by the coronavirus pandemic slowdown.
"Service departments are managing by the numbers — what to measure and how to measure it, what the key performance indicators are," says Rick Wegley, an NCM Institute instructor for NCM Associates, Kansas City, Mo.
Manny Escalon, service director for Beck & Masten Buick-GMC South in Houston, says that is how he is making decisions these days.
"It's all about the metrics," he says.
For instance, Escalon says the coronavirus business slump this spring forced him to postpone adding a position to the dealership's business development center. He estimated the position would cost about $2,200 per month in salary and benefits.
By mid-July, performance data had improved enough to give him a green light, Escalon says. The dealership's service department was on pace to rack up 3,300 total repair hours for the month, about 10 percent ahead of its goal, he told Fixed Ops Journal. Looking at the numbers, Escalon expected the new position to produce appointments representing up to $30,000 per month in gross profit.
Dealership service departments around the country are going through a similar process — monitoring data on repair orders, labor hours per repair order and more. A primary task is to decide how many positions to add, or add back, when business rebounds.
"Say the dealership had to do some cutbacks from COVID," Wegley says. "Who do you eliminate? The lower-paid employees? The express-service staff? You get an uptick in productivity, but gross margins go down because you've got the higher-paid guys doing the express service."