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8 Vital KPIs for the Service Department (Part 1)

To understand the importance of KPIs (key performance indicators), it is useful to think about the journey of a ship: the captain must have the essential tools to know where the ship is headed and what problems are on the horizon. These tools will help the captain make timely decisions and reach the destination successfully. Not having them is akin to sailing blindly, which greatly increases the risk of arriving at unexpected shores.

KPIs measure and analyze the performance of each process within a business, which means that dealership success is linked to KPIs. But the data generated by the dealership every day can be overwhelming; Therefore, like that ship’s captain, you need to know what critical operations to control.

This article addresses the KPIs that must be constantly analyzed to make the Service Department profitable, efficient and productive.

Service margin for labor

Why is this indicator important? It detects if the gross margin of the work performed by technicians is high or low. This helps the Service Manager decide on training, task reassignment, etc. Improving this KPI increases business profitability.

How to improve this KPI? If technicians are better trained, each job will consume less time. This means that the payout per job to each technician will be of a smaller proportion, increasing the dealership’s gross margin. Training advisors and technicians is a task that should be performed with a certain frequency; the overall effect will be to avoid errors, the wasting of time and money, and the improvement of customer satisfaction.

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Workshop occupancy level

Why is this indicator important? It lets you see if you are maximizing capacity of the workshop by reviewing how many hours of the total available workshop hours are used to actually perform work. Keep track of this KPI to optimize workshop resources and, through more organized work, increase turnover.

How to improve this KPI? Each unoccupied workshop appointment is money left on the table. The Service Marketing functions offered by Autologica DMS allow Service Managers to be proactive in selling appointments, since they can create sales call campaigns to contact customers that have upcoming scheduled services.

Sales by advisor

Why is this indicator important? The total billing of the Services Department can be divided by the number of sertice advisors to obtain an average billing value for each employee. Experts recommend a goal of 10% annual increase in sales per advisor.

Calculate your indicator: Total sales / Number of advisors
Recommended goal: + 10% annual

How to improve this KPI? The checklist used by the Service Advisor for receiving a vehicle at the workshop can be used as a strategy for promoting more sales. You can create a checklist with questions to remind the customer of services they declined in previous maintenance services, suggest preventive maintenance work, and mention special offers.

If the dealer uses an application like DealerTablet, this task becomes very simple because you can configure a customized checklist for vehicle reception.

Technicians Efficiency

Why is this indicator important? It lets you compare the hours that technicians invoice for each job to the actual number of hours that they dedicate to that job. A workshop will be more efficient and more profitable as the hours billed for work are greater than the hours paid to technicians.

How to improve this indicator with Autologica DMS?

Autologica DMS includes two key tools to keep track of everything a technician does in the workshop:

Job clock: Allows technicians to record the time spent on each job and the hours dedicated to general tasks that are not billed, by quickly marking their start and end time on a touchscreen; the manager can monitor the use of hours.

Technician panel: The Service Manager can control, in real time, what each technician is doing, which mechanic is idle, what jobs are delayed, what jobs were suspended, etc.

These KPIs need to be monitored closely in order to make decisions, with the end goal of improving the profitability of the Service Department and the dealership.

In the second part of this article we will see other KPIs that the Service Manager should monitor.

Autologica DMS allows you to measure the vital KPIs of the dealership and has tools to help you optimize them. Request a demo today.