Have you ever wondered as a service manager of either a truck or heavy equipment dealership, if you are running a smooth operation? One that will be the customer’s first pick to have either their vehicles or heavy equipment serviced.

I have had the pleasure of working with transportation and heavy equipment dealership’s service departments all over North America and South America.  In many of these dealerships, I have observed a common denominator, and it is that they are running their operations from within a comfort zone. This comfort zone is very inefficient, stressful, and not very profitable. Thus, the bottom line is that these dealers could improve their operations and become more productive and profitable.  The comfort zone paradigm must be changed.

In order to make a 180-degree change and start being more profitable, dealerships and their service department personnel need to understand that if they want to change something in their service department operations, they need to measure it. Most of the Dealer Management Systems (DMS) available in the marketplace offer plenty of the data and information that a service manager could use. The big problem is that the data comes most of the time in a spreadsheet format or reports which are difficult to read and interpret. Because of this, service managers don’t pay much attention to that data and usually have no idea how their service department is actually performing. They don’t know if they are winning or losing.

So, the first step to help a dealership’s service department personnel is to invest at least a week observing their operations, talking to their technicians, their service and parts managers. We also need to look at their service and spare parts sales reports to fully understand the current status.

Once we have gathered this information, we present it to key service and parts department personnel, and by using a consultative selling approach, we ask open and closed-ended questions to understand firsthand how they feel about their operations. At this point, it is essential to mention that there will be two different scenarios. You will find the dealer principal that knows that there is room for improvement, but he or she doesn’t want to change no matter what. In cases like this, there is not much we can do, but this is a tiny percentage of dealerships out there. About three percent of dealerships fit this profile.

The other 97% want to change, but they don’t know how to make the required changes. Because they don’t know what to measure and the data they get from their Dealer Management Systems is not presented in an easy to understand form to take action.

There are many KPIs (Key Performance Indicator) that a dealership service department needs to measure. They  are needed to start running a very smooth service department operation before they can begin measuring any KPIs. Thus, first things first, we need to create is a Work-in-Progress (WIP) Report from their DMS system.

It you decide to follow this approach to ignite service department performance there are there options to move forward:

1. An individual service manager can research, develop and execute the plan for their own department.
2. A senior dealership manager can research, develop and execute the plan as the champion.
3. Carefully select a consultant or business development expert that understands the process and is skilled at project management to lead lasting change and improve performance.

Below is a WIP Action Plan that can be implemented in either transportation or heavy equipment dealership service departments.

Service Department Work-in-Process (WIP) Report

Objective: Why do we need to track WIP?

Work in Process (WIP) is a term that describes vehicles that have entered the repair process and are at different stages of completion by the dealership. The main goal of building and maintaining a WIP report is to track, measure, and optimize processes to ensure maximum throughput from service operations. By streamlining WIP, dealerships can reduce dwell(delays without activity to complete the repair), improve efficiency, increase throughput, increase part sales, improve customer satisfaction, and subsequently improve dealership profitability. Utilizing WIP reports as a tool for periodic communication will help employees understand their individual and collective impact on business performance.

Target: What will we accomplish?

By implementing this Action Plan, a dealership can expect to:

1. Increase throughput, quickly identify bottlenecks and take immediate corrective action
2. Reduce dwell
3. Increase labor sales, parts sales, and profitability
4. Better plan and control service operations / Improve RO (Repair Order) tracking
5. Develop awareness of how individual and collective performance impacts business performance
6. Make informed decisions based on data and metrics

Note: Throughout this article we will be using the term "Repair Order".  In some of your service departments the term "Work Order" is used.  They are the same thing so substitute one for the other in the article.

Reporting: Understanding your Work In Process / WIP

Let’s look at a sample WIP report and the information that can be extracted. First, we divide WIP into various ‘buckets/categories.’ These buckets/categories are indicative of multiple stages of the RO lifecycle. As ROs move from one stage to another, the Foreman / Service Advisor or Technician updates the information which feeds into the WIP report shown below:

In the chart above, approximately 60 ROs are currently in the ‘Working’ stage, while 50 ROs are in the ‘customer pick-up’ stage. A supervisor or manager can look at this data, analyze if there is a bottleneck in any of these stages, and accordingly plan corrective action.

Ownership Matrix: Who is responsible?

Process: Continually Improve Your Service Departments

Follow this step by step process to start developing WIP reports for your dealership.

Output: WIP Reports

Below are some sample reports that you can retrieve from the DMS (Dealer Management System): The examples below are representative of what could be created in ‘Procede’ DMS

1. Work in Process by Repair Order Count
   

   

2. Work in Process by Dollar amount in each stage of repair
   

   

Note: Once the reports are designed, the DMS can be set-up to auto-generate these reports at predefined intervals.

Action Plan Implementation Checklist

The following checklist will help you to do a step-by-step implementation of your action plan:

Stage 1: Creating reports in the DMS

Step 1: Classify ROs into various buckets/categories per service department flow. Categories for reference are indicated below but are not intended to be all-inclusive. Customize categories to meet the needs of your department.

Step 2: Modify the DMS to reflect these buckets/categories for ROs.

Step 2A: Create/choose an unused field in the DMS.

Step 2B: Create a selection list from which employees can choose RO status.

Step 3: Set up standard reports that auto-generate WIP report / open ROs report every day.

Stage 2: Training and assigning responsibility

Step 1: Identify the individuals involved in maintaining the WIP report per Ownership Matrix.

Step 2: Train the employees to ensure that they have the necessary knowledge, skill, and ability to execute their responsibilities proficiently.

Stage 3: Daily usage

Step 1: Ensure that the DMS can auto-generate the reports every day. If the DMS doesn’t have that capability assign responsibility to an admin staff to generate these reports every day.

Step 2: Have a daily meeting between Service Manager, Foreman, Service Advisor(s), and other employees to discuss status, bottlenecks, and backlogs. Plan subsequent corrective action. The WIP should drive daily prioritization and highlight areas for dealership improvement.

Stage 4: Continuous Improvement Cycle

Step 1: Use insight gathered from daily usage to identify bottlenecks in the department so that they can be fixed.

Step 2: Ensure that existing reports are being used effectively, and all concerned are familiar with using WIP reports.

Step 3: Identify opportunities for improvement in the existing processes. Some examples are:

• Adding / removing RO buckets / categories
• Adding metrics for discussion

Step 4: Make appropriate changes in the DMS to reflect continuous improvement.

Tracking Performance

Measure and document the progress of  the action plan each week during implementation using appropriate metrics.  Using this approach drives accountability and delivers better results.  If we don't then we have made the effort but may not get the results that we want.

The bottom line is that taking these actions should allow us to do the following:

1. Move equipment that requires repairs more quickly through the service department and understand the impact of the changes.
2.  Insure that RO's are being opened in an orderly fashion to insure that equipment does not sit in your shop unnecessary and when the work is done the equipment is going back to customers as quickly as possible and recovery/billing is taking place quickly.
3. Efforts to track the timeline provide accountability to complete improvements on time.

Results: Improved Service Department Performance

In this article, there has been a lot of detail information on how to improve Service Department Operations.  If you have not already integrated these ideas into your service department, then please consider using these concepts to bring order, simplicity, and increased profitability to your operations.

• Are you tired of wasted time, panic, and guessing whenever you are asked when a machine will be ready for the customer?
• You likely have a DMS (Dealer Management System). Are you using it as a tool to run a more effective service department or wasting time entering unutilized data?
• Do you have to guess what jobs your technicians should be working on each morning, or do they spend time checking if they have the parts of other items needed to finish the job?
• Have you been asked to improve Absorption but have no idea how?

If your answer to any of these questions was yes, then a better understanding of WIP for your Service Department(s) is at least part of the solution.  There is also a recently authored article titled SERVICE DEPARTMENT ABSORPTION: Key to Success! that could be of interest to any Service/Customer Support Manager looking to improve the performance of a Service Department. Consider implementing some of what this article has to offer. Improved efficiency, organization, and profitability will be the outcome.

• Efficiency: Accurate WIP (Work In Process) reports allow you to assign technicians to jobs when they can be most effective.
• Organization: WIP reports help you identify issues quickly, like delayed parts ordering.
• Profitability: When Technicians are assigned to work orders that they can be immediately productive on, then generate more billable time each day.

If reading this article raised any questions  or you need assistance please contact us to learn how we can assist your organization:

email: info@ideateconsultinggroup.com

Phone: 563-265-1450

Ideate Consulting Group partners & consults with small and medium-sized enterprises and utilizes NO-cost and low-cost business growth methods that are proven and time tested to grow sales and revenue long term.

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