“For shops that properly track this, the average we find is 20 percent come back,” said Olson. “We haven’t found one below 10 percent.”
He said the minimum average cost of come-backs is $400--$500 per vehicle.
“If you take the number of cars you repair every month and 20 percent on average are coming back, multiply this by $400--$500 to calculate what is being embezzled from your company,” said Olson. “Track it for 30 days and it will blow your mind. Sometimes it’s unavoidable, but the exception is not the rule.”
2) Internal come-back rate between departments
Olson said the internal come-back rate can also cost a shop more than $400--$500 per vehicle. He mentioned three different types.
The first is when a technician receives a vehicle from another department, notices something that needs to be repaired and does the work himself/herself.
“That technician is going to lose 10--15 minutes of productivity and you’re going to spend more on materials,” said Olson. “If that technician is a 200 percent effective tech, you just lost 20--30 minutes of production from your shop.”
A second type is when a technician receives a vehicle and brings another employee over to repair something.
“Now you have two technicians wasting time,” said Olson.
The third is when a technician receives a vehicle and sends it back to a prior department.
“If you track that, you’ll be shocked at how much inefficiency you have,” he said.
3) Average start-stop rate
This is when a vehicle comes in and the work has to stop for some reason. That might be due to parts not being available or another car becoming a priority. Olson advises shops to look at how many times technicians stop during a repair.
4) Supplement number record
“If there are one or two supplements, it’s not a real big deal,” said Olson. “Every time you find more damage or change the repair, that is a change that hurts productivity.”
However, he often says shops have eight to 12 supplements.
“That’s killing productivity,” he said. “All you have to do is track it. If you can’t measure it, you can’t fix it.”