Why Customers Should Wait
According to the J.D. Power 2016 U.S. Customer Service Index (CSI) Study, which measures customer satisfaction with service at a franchised dealer facility for maintenance or repair work among owners and lessees of 1- to 5-year-old vehicles, 70 percent of all service customers are willing to wait between one and two hours to have their vehicles serviced. Customer satisfaction averages 835 (out of 1,000) when the wait time is less than one hour and 40 minutes, and dips to 756 when the wait is longer.
The benefits of same-day, wait-time service are numerous within fixed operations departments, but properly implementing this concept within all three departments requires careful planning and a process that won’t fall apart. Duane Curto, fixed operations director at Vic Canever Chevrolet in Fenton, Mich., (at which the service department writes 110 repair orders per day and an onsite body shop employs six), explains his top tips for doing so.
Curto says that 70 percent of his business is made up of same-day jobs and an additional 30 percent are carryovers, which are typically either larger jobs, jobs on which they’re waiting for parts, difficult vehicles to diagnose or when the shop is at capacity.
“When we’re really busy, we might not be able to catch up with everybody,” he says.
From a fixed operations perspective, Curto says the benefits of same-day jobs are numerous: It increases technician productivity and reduces loaner car expense.
“I don’t have people in loaner cars as long as I did in the past waiting for parts to come in,” he says. “Due to that throughput, now I have other cars available and I have loaner cars available for new customers.”
The advantages are also the same on the body side, he says, although the types of jobs on which they can perform same-day repairs differ. On the collision side, those jobs are typically headlamp assemblies, spoilers, trim pieces and light rear and front fascia. Curto says those typically represent 40 percent of the collision business.
On the service and parts side, Curto began implementing same-day service 2-3 years ago when General Motors created a program called ”Service Lane Parts Program,” which required dealers to boost inventories of a sub-set of parts that have been flagged as those most commonly needed for those repairs. The program was created after General Motors conducted research and discovered that parts availability was one of the key reasons why customers don’t get same-day service. Under the program, GM added dozens of parts to the list of items that dealerships are expected to keep on the shelf for same-day repairs.
“What GM did was to up our inventory by probably $30,000–$50,000,” he says. “The idea was to have more parts available on the shelf just for that initiative. Have it on the shelf and have it be able to get the car in and out in one day. That is our goal.”
GM also created a similar program on the collision side called “Bump the Competition,” which offers conquest pricing on a variety of parts for insurance repairs, fleet and customer-pay work when aftermarket parts are substituted in favor of OEM parts. That program inspired Curto to implement a similar same-day service process in the body shop.
“We can take those body shop crash parts and we can use GM collision and crash parts instead of aftermarket parts. GM will offset that cost difference,” Curto says. “With same-day service, we’ve got more collision and crash parts, but we’re also able to use more of them because of the GM program.”
How It Works
Same-day service begins in the parts department, Curto says. You need to analyze your parts by strata code, looking at your A and B movers. The A and B strata codes are going to sell much quicker than a strata code D part. Curto says to analyze the strata codes and up inventory of more A, B and Cs to offer a larger breadth of coverage. Then, assign a staff member to utilize a retail inventory management (RIM) system, which is an automatic replenishment system, to track how many parts have been sold and at what rate.
“If it sees that we’ve sold two parts in the last 30 days, it moves it up to an automatic replenishment system,” Curto says. “It sees what we’re using and selling it and at that point in time, it will bring it into our inventory.”
On the customer service side, same-day jobs will require more scheduling or being able to effectively accommodate waiters and walk-ins in the service department. Curto does this with a robust loaner car program. While he says implementing same-day service didn’t requires a change of process, necessarily, it did require additional resources to make sure that customers who are waiting are still satisfied.
“They might need a ride to go up to Walmart. Giving people a ride home and going to pick them up becomes more of a priority,” he says. “We used to have to have a part-time shuttle driver, now it’s pretty much turned into full time. They may be waiting but they’re not waiting exactly right here.”
The Space Needed
By increasing assets in the parts department by as much as $50,000, that’s more money tied up in inventory, Curto says, resulting in challenges related to space in the parts department.
“We have now space constraints in the parts departments because of that. We’re just trying to maximize our space,” he says. “We’ve built up a little bit. We have no room to go out so we’ve mostly gone up. Especially a lot of times, your body shop parts are bigger. Space constraints have probably been the biggest challenge; having it on the shelf, available, having it ready for technicians.”
In both the service and collision departments, Curto also added additional hoists to accommodate more vehicles.
Curto says that staffing is also essential for a smooth same-day service process. He recommends having certain staff members dedicated to this segment of the business. On the service side, Curto has an assistant manager who is dedicated to managing the GM assistance cases and two women that run the service business center and handle loaner cars and taking care of appointments. In addition, he added technicians to both the service and collision departments to ensure the departments could handle the volume of work that same-day service would demand.