In the last issue we reviewed some of the history of group and team service production methods. In reality, this rather simple, straightforward management system maximized dealer shop output and customer retention for most of fifty years. It is used extensively in Europe and Japan today.
Only in the years of the 60's and 70's, as the dealer count fell and new unit sales increased, did dealer shops grow substantially. There were several options to manage additional technicians: continue with the traditional "service manager" managing small shops, or utilize less expensive assistants and a dispatcher to disperse work among the technicians. While shops were adding technicians, vehicles became more complicated and by the 60's technicians no longer did body and mechanical work in the same shop.
New thinking began to emerge in the 60's that included developing not only mechanical specialists, but dividing up parts of the vehicle, and developing specialists for those. Hence, production systems like Shop Trak emerged that touted the use of lubrication, air conditioning, front end, tune-up, major engine, electrical, cooling system, transmission specialists as a means to increase the expertise for each type of repair.
Skill leveling began emerging for evaluating technician pay, and the A, B, C, D grades of technician skills, and variable pay systems were explored by progressive service operations. Even though these unique ideas were being examined, the prevalent pay system until the 70's was a technician percentage of 40-50% of the labor hour dollar. Interestingly, today we still find dealerships paying with that method.
Dispatchers found themselves guiding the movement of vehicles needing multiple repairs in and out of the shop four or five times for one repair order, and while quality may have increased in some cases, shop output often dropped because of lost time. Another problem developed with stall utilization, when certain skills of work filled the shops, while other skills had no demand. Consequently, some technicians remained backed up with work, creating carryovers, while others sat on their benches. Needless to say this was a difficult system to manage, and aware technicians soon figured out which specialty was the most profitable for them and which to avoid.
What goes around comes around, they say, and in the case of production methods, the group/team system has done just that. Shops functioning successfully on some form of this production method are essentially going back to the basics that prevailed successfully in past generations.
There are numerous idiosyncrasies that industry people apply to the function of "groups" or "teams," but first know that these words are often used interchangeably. So regardless of what someone chooses to call this simple basic production method, it is still just a clone of the simple customer-manager-technician method of managing customer flow.
The basic organization of a successful group/team method begins with substantially changing the service advisor's knowledge level of vehicle functions, shop management, and customer management, and empowering this person to be a decision-maker. The goal is to create a manager (not a clerk) to handle customer needs and develop a long-term customer for the service department. Until the service advisors are trained to function as knowledgeable managers, a group/team undertaking is doomed to minimal success.
Another concern to be addressed is the environment in which these managers must function. Too many times they are overwhelmed by too many customers in a short time span. Customers leave their vehicles to surround the hapless advisor, glued to a computer keyboard, talking and typing as fast as possible.
Long-term relationships are nearly impossible to establish within this chaotic process.
Customers are assigned to an individual service manager so that a relationship can flourish. Let's face it, most of the dealer's competition can and does offer everything the dealer offers including expertise. A recent national survey identified that independent shops were perceived as having more expertise than the dealer, and our surveys show the same. So much for bragging about factory trained technicians.
The real world is this, the customer perceives technical expertise through the service person they deal with, not a snappy ad line about qualified technicians. Providing that expertise to the customer is part of a valid group or team system, if the system is to function at maximum capability.
Another result of properly developed groups or teams is a throwback to the original systems, where technicians actually respected the service write-up position. Remember, these people were their real managers, usually equipped with a technician background themselves. With respect for the position, came responsiveness to customer needs, which of course are filtered through the service manager.
Among the garden-variety group and team setups are various pay plans for both service managers (service advisor) and technicians, usually focused around production hours generation. Some systems have technical managers, who may or may not actually dispatch the workload, while others maintain dispatching with the service manager. In what might be referred to as a "pure" team production system, all production hours are accumulated on one team flag sheet. The team members share equally in the hours, but at different levels of pay depending on skill contribution. Sometimes a customer satisfaction bonus is added.
One pleasant result of group/team production is the ability to measure performance both quantitatively and qualitatively. This eliminates finger-pointing, while creating ease of identifying both good and bad performance. Members of the group or team actually forecast their performances in items like customer counts, production days, output, comebacks, carryovers and customer satisfaction. All of these items are easily maintained and monitored for each group. Adjustments can be made by science, as opposed to a wet index finger.
Yes, there are downsides to this throwback method. Since performance and attitudes are so closely monitored along with creating at least some co-dependency on fellow players, management has to maintain a rather precise system of measurements, as well as communication. Problem solving is a must and lingering negative feelings by any production personnel tend to be more disruptive, whereas poor performance can literally "hide" in other systems. The marginal service advisor that has been accepted for so long will suddenly be pressured out of a job when assigned to manage his or her own shop. If top management doesn't do it, the assigned shop personnel will.
Ed J Kovalchick is CEO of Net Profit Inc, an international automotive manufacturer and dealer training and management consulting firm, located in Alabaster, Al. Mr Kovalchick is a featured speaker and instructor at conventions, 20-Groups, associations, and other automotive related events. He is also a former six-franchise new car dealer, and independent shop owner. If you have specific questions or require more information about this subject, please check the appropriate box on the reader response form on page 3.