This section covers various KPIs for service, definitions, why they are important and how they impact your business

1. Profitable Distributor Service Management Make Your Service Department the Driver of Your Dealership

2. Key Performance Indicators Distributor Service Department Key Performance Indicators (KPIs) Definitions and Reasons For Deviations Section 2

3. Key Performance Indicators 2.1 Why KPI? 2.2 Time to Sell 2.3 KPI, Definitions, Impact, Reasons for Deviations and Actions 2.4 5 x Super KPIs

4. 2.1 Key Performance Indicators Section 2.1 Why KPI?

5. 2.1 Key Performance Indicators Uniform Snapshot of Department Performance

6. 2.1 Key Performance Indicators Enables Performance Health Checks

7. 2.1 Key Performance Indicators Forces the Department to Capture All Relevant Data

8. 2.1 Key Performance Indicators Will Enable Correct Measurement of Progress Made

9. 2.1 Key Performance Indicators “The beginning of wisdom is to call things by their right names” Chinese Proverb Know Your KPIs! Food For Thought:

10. 2.2 Key Performance Indicators Section 2.2 Time to Sell

11. 2.2 Key Performance Indicators Total Calendar Time Productive Time Total Available Time Improvement Area Sick leave, vacation, unauthorized absence Unsold time: Idle time Other unsold time

12. 2.2 Key Performance Indicators “Work Expands to Fill the Time For Its Completion” Cyril Northcote Parkinson, 1909-1993 Parkinson’s Law #1:

13. 2.2 Key Performance Indicators “Expenditures Rise to Meet Income” Cyril Northcote Parkinson, 1909-1993 Parkinson’s Law #2:

14. 2.3 Key Performance Indicators Distributor Service Department Key Performance Indicators, KPI Section 2.3

15. 2.3 Key Performance Indicators 2.3.1 Technicians Availability Against Calendar Time, %

16. 2.3 Key Performance Indicators Technician’s attendance hours/Theoretical calendar time = Technicians Availability, % Target >87% 2.3.1 Technician’s Availability Against Calendar Time, % Definition

17. 2.3 Key Performance Indicators 2.3.1 Technician’s Availability Against Calendar Time, % Impacts Total Hours to Sell Turnover Profit

18. 2.3 Key Performance Indicators Management? 2.3.1 Technician’s Availability Against Calendar Time, % Reasons Time Management? Follow Up Attendance? Dissatisfaction? “Ownership”?

19. 2.3 Key Performance Indicators Awareness 2.3.1 Technician’s Availability Against Calendar Time, % Actions Attitude Care Educate Ownership

20. 2.3 Key Performance Indicators 2.3.2 Technicians Productivity, %

21. 2.3 Key Performance Indicators Technician’s Sold Time/Technician’s Attendance Time = Technicians Productivity, % Target >85-90% 2.3.2 Technician’s Productivity, % Definition

22. 2.3 Key Performance Indicators 2.3.2 Technician’s Productivity, % Impacts Turnover Margins Net Profit

23. 2.3 Key Performance Indicators Low Sales? 2.3.2 Technician’s Productivity, % Reasons Management? Awareness, Hrs to sell? Pre-planning? Workshop layout

24. 2.3 Key Performance Indicators Workshop Maintenance 2.3.2 Technician’s Productivity, % Reasons, Cont’d Parts Availability? Skill levels? Incentive systems? Management System?

25. 2.3 Key Performance Indicators Increase Sales 2.3.2 Technician’s Productivity, % Actions Awareness Attitude Pre-plan Management

26. 2.3 Key Performance Indicators 2.3.3 Technicians Efficiency, %

27. 2.3 Key Performance Indicators Technician’s AllottedTime/ Technician’s UsedTime = Technicians Efficiency, % Target >100% 2.3.3 Technician’s Efficiency, % Definition

28. 2.3 Key Performance Indicators Turnover 2.3.3 Technician’s Efficiency, % Impacts Bay Utilization Margins Net Profit Turnaround Time

29. 2.3 Key Performance Indicators Skill Match? 2.3.3 Technician’s Efficiency, % Reasons Complex, Frequency? Non-Productive Time? Wrong Method? More Than Required?

30. 2.3 Key Performance Indicators Separate Operations? 2.3.3 Technician’s Efficiency, % Reasons, Cont’d Availability, Manuals? Improper Procedures? Supervision? Job Planning?

31. 2.3 Key Performance Indicators Workshop Layout? 2.3.3 Technician’s Efficiency, % Reasons, Cont’d Tool Maintenance? Climate/Environment? 2 Technicians not 1? Lack of Training?

32. 2.3 Key Performance Indicators Improve Supervision 2.3.3 Technician’s Efficiency, % Actions Better Planning Correct Job cards Education Awareness/Attitude

33. 2.3 Key Performance Indicators 2.2.4 Recovery Rate on Technician’s Available Time, Money/hr

34. 2.3 Key Performance Indicators Total Labor Sales/Total Available Time = Recovery Rate, Money/hr Target: 3-4 x cost direct productives 2.3.4 Recovery Rate on Technician’s Available Time, Money/hr Definition

35. 2.3 Key Performance Indicators Turnover 2.3.4 Recovery Rate on Technician’s Available Time, Money/hr Impacts Margins Net Profit Required Charge Rate Break-even level

36. 2.3 Key Performance Indicators Attendance? 2.3.4 Recovery Rate on Technician’s Available Time, Money/hr Reasons Productivity? Efficiency? Internal/External? Management?

37. 2.3 Key Performance Indicators Improve Attendance 2.3.4 Recovery Rate on Technician’s Available Time, Money/hr Actions Improve Productivity Improve Efficiency Increase External Sales Manage and Coach

38. 2.3 Key Performance Indicators Attendance, Productivity and Efficiency, How They Impact Turnover and Gross Margin Workshop 2

39. 2.3 Key Performance Indicators 2.3.5 Technician’s Unsold Time, %

40. 2.3 Key Performance Indicators Technician’s Non-productive time/Total Attendance Time = Technician’s Unsold Time, % Target <10-15% 2.3.5 Technician’s Unsold Time, % Definition

41. 2.3 Key Performance Indicators Turnover 2.3.5 Technician’s Unsold Time, % Impacts Margins Net Profit Required Charge Rate Break-even level

42. 2.3 Key Performance Indicators Low Sales 2.3.5 Technician’s Unsold Time, % Reasons Management? Awareness, Hrs to Sell? Pre-planning? Workshop Lay-out

43. 2.3 Key Performance Indicators Increase Sales 2.3.5 Technician’s Unsold Time, % Actions Awareness Attitude Pre-plan Management

44. 2.3 Key Performance Indicators 2.3.6 Work-bay Utilization in % of Potential

45. 2.3 Key Performance Indicators Sold hours per work bay divided by total available hours to sell per work bay = work bay utilization, %. Target >90% 2.3.6 Work-bay Utilization in % of Potential Definition

46. 2.3 Key Performance Indicators Turnover 2.3.6 Work-bay Utilization in % of Potential Impacts Margins Net Profit Sales Potential Expansion Plans

47. 2.3 Key Performance Indicators Pre-planning? 2.3.6 Work-bay Utilization in % of Potential Reasons Units Waiting For Parts? Productivity/Efficiency? Admin Process? Supervision?

48. 2.3 Key Performance Indicators Service Marketing? 2.3.6 Work-bay Utilization in % of Potential Reasons, cont’d Workshop Layout? Cleanliness? 24/7 Operation? Low Skill Levels?

49. 2.3 Key Performance Indicators Workflows 2.3.6 Work-bay Utilization in % of Potential Actions Parts Planning Training Clean up Workshop Management

50. 2.3 Key Performance Indicators Marketing Plan 2.3.6 Work-bay Utilization in % of Potential Actions, cont’d Supervision Customer Interaction Workshop Layout Extend Operating Hrs

51. 2.3 Key Performance Indicators 2.3.7 Gross Profit on Own Labor, %

52. 2.3 Key Performance Indicators Total Labor Sales less Direct Expenses for own productive staff = Labor Gross Profit Target 65-80% 2.3.7 Gross Profit on Own Labor, % Definition

53. 2.3 Key Performance Indicators Net Profit 2.3.7 Gross Profit on Own Labor, % Impacts Break-even level Required Charge Rates Expansion Plans Investments

54. 2.3 Key Performance Indicators Productivity? 2.3.7 Gross Profit on Own Labor, % Reasons Efficiency? Unrealistic Salary? Labor Rate? Internal/External?

55. 2.3 Key Performance Indicators Service Marketing 2.3.7 Gross Profit on Own Labor, % Actions Training Differentiate Charges Supervision Procedures

56. 2.3 Key Performance Indicators 2.3.8 Workshop Direct Expenditures

57. 2.3 Key Performance Indicators Includes personnel expenditures for Technicians (salary, HRA, visa cost, vacation package, health insurance, etc.) Target 20-35% 2.3.8 Workshop Direct Expenditures Definition

58. 2.3 Key Performance Indicators Margins 2.3.8 Workshop Direct Expenditures Impacts Break-even level Required Charge Rates Net Profit Indirect Expenses

59. 2.3 Key Performance Indicators Salary Level? 2.3.8 Workshop Direct Expenditures Reasons Overtime, Sick Leave? Budget? Management? Follow up KPI?

60. 2.3 Key Performance Indicators Differentiate Charges 2.3.8 Workshop Direct Expenditures Actions Attendance Realistic Budget Supervision Management

61. 2.3 Key Performance Indicators 2.3.9 Workshop Indirect Expenditures

62. 2.3 Key Performance Indicators Costs which can not be directly allocated towards a specific job such as rent, entertainment, head office expenses, etc. Target <35% 2.3.9 Workshop Indirect Expenditures Definition

63. 2.3 Key Performance Indicators Net Profit 2.3.9 Workshop Indirect Expenditures Impacts Required Charge Rates Investments Break-even Level Company Future

64. 2.3 Key Performance Indicators Management? 2.3.9 Workshop Indirect Expenditures Reasons No Control? Budget? Supply Agreements? In Expansion Mode?

65. 2.3 Key Performance Indicators Procedures 2.3.9 Workshop Direct Expenditures Actions Controls Realistic Budget Supply Agreements Delegation

66. 2.3 Key Performance Indicators 2.3.10 Service Department Net Contribution, %

67. 2.3 Key Performance Indicators Total Sales – Direct Expenses – Indirect Expenses = Net Profit Net Profit/Total Sales = Net Profit % Target 25-30% 2.3.10 Service Department Net Contribution, % Definition

68. 2.3 Key Performance Indicators Company Performance 2.3.10 Gross Profit on Own Labor, % Impacts Expansion Plans Investments Company Future Future Bonus, etc.

69. 2.3 Key Performance Indicators Sales, Charge Rates? 2.3.10 Gross Profit on Own Labor, % Reasons Direct Expenses? Productivity/Efficiency? Internal/External? Profit Generator?

70. 2.3 Key Performance Indicators Price Management 2.3.10 Gross Profit on Own Labor, % Actions Salary Levels Supervision Management Service Marketing

71. 2.3 Key Performance Indicators 2.3.11 Spare Parts Sales Through Own Workshop, %

72. 2.3 Key Performance Indicators Sales of Spare Parts Through Own Workshop/ Total Sales of Spare Parts = Sales in % Target 30-70% 2.3.11 Spare Parts Sales Through Own Workshop, % Definition

73. 2.3 Key Performance Indicators Company Performance 2.3.11 Spare Parts Sales Through Own Workshop, % Impacts Turnover Margins Net Profit Company Reputation

74. 2.3 Key Performance Indicators Favor Counter Sales? 2.3.11 Spare Parts Sales Through Own Workshop, % Reasons Workshop Discount? Contracts, Combos? Service Marketing? Profit Generator?

75. 2.3 Key Performance Indicators Discount Management 2.3.11 Spare Parts Sales Through Own Workshop, % Actions Contracts and Combos Structured Marketing Management Customer Satisfaction

76. 2.3 Key Performance Indicators 2.3.12 External Workshop Sales Versus Internal, %

77. 2.3 Key Performance Indicators Sales of External Jobs/ Total Workshop Sales = External Sales in % Target 80% 2.3.12 External Workshop Sales Versus Internal, % Definition

78. 2.3 Key Performance Indicators Turnover 2.3.12 External Workshop Sales Versus Internal, % Impacts Margins Net Profit Service Penetration Company Performance

79. 2.3 Key Performance Indicators Service Marketing? 2.3.12 External Workshop Sales Versus Internal, % Reasons Workshop Discount? Contracts, Combos? Manage KPIs? Profit Generator?

80. 2.3 Key Performance Indicators Management 2.3.12 External Workshop Sales Versus Internal, % Actions Structured Marketing Add Value Contracts and Combos Customer Satisfaction

81. 2.3 Key Performance Indicators 2.3.13 Redo Work in Percent of Total Workshop Sales

82. 2.3 Key Performance Indicators Redo Sales, parts and labor/ Total Workshop Sales, parts and labor = Redo in % Target <1% 2.3.13 Redo Work in Percent of Total Workshop Sales Definition

83. 2.3 Key Performance Indicators Productivity 2.3.13 Redo Work in Percent of Total Workshop Sales Impacts Margins Net Profit Customer Satisfaction Company Reputation

84. 2.3 Key Performance Indicators Training? 2.3.13 Redo Work in Percent of Total Workshop Sales Reasons Diagnostics? Definition of Work? Supervision? Wrong Technician?

85. 2.3 Key Performance Indicators Staff Development 2.3.13 Redo Work in Percent of Total Workshop Sales Actions Proper Procedures Management Proper Tools RTFM

86. 2.3 Key Performance Indicators 2.3.14 Time, Vehicle In to Invoice Out

87. 2.3 Key Performance Indicators Time elapsed from vehicle arrives to workshop until invoice is issued and sent. Target: 1 workday after technical completion 2.3.14 Time, Vehicle In to Invoice Out Definition

88. 2.3 Key Performance Indicators Cash Flow 2.3.14 Time, Vehicle In to Invoice Out Impacts Margins Net Profit Productivity/Efficiency Company Reputation

89. 2.3 Key Performance Indicators Pre-Planning? 2.3.14 Time, Vehicle In to Invoice Out Reasons Parts Availability? Procedures? Customer Approvals? Supervision?

90. 2.3 Key Performance Indicators Better Pre-Planning 2.3.14 Time, Vehicle In to Invoice Out Actions Parts Forecasting Detailed Procedures Approvals Process Management

91. 2.4 Key Performance Indicators Section 2.4 5 x Super KPIs

92. 2.4 Key Performance Indicators Recovery Rate/ Calendar Hr Parts Sales Through Workshop Work-bay Utilization, % Redo Work Versus Total Sales, % Time, Vehicle In to Invoice Out

93. 2.4 Key Performance Indicators Charge Rate(s)/Hr Attendance Recovery Rate/ Calendar Hr Covers: Productivity Efficiency Internal vs. External

94. 2.4 Key Performance Indicators Gives an Indication of Total Growth Potential For the Workshop Parts Sales Through Workshop vs. Total Parts Sales

95. 2.4 Key Performance Indicators Gives an Indication of Growth Potential Within Existing Premises Work-bay Utilization Versus Potential

96. 2.4 Key Performance Indicators Gives an Indication of Total Repair Quality of the Workshop Redo Work Versus Total Workshop Sales

97. 2.4 Key Performance Indicators Approval Process Management Time, Vehicle In to Invoice Out Covers: Productivity/Efficiency Parts Availability Admin Procedures

98. Key Performance Indicators Measure Performance Capture Relevant Data Section 2, Summary Uniform Snap Shot Correct Decisions Measures Trends