Managing Technician Productivity
Successful fleets, no matter their size, understand the value of managing technician productivity. Just like anything, measuring and understanding how it is being applied is the first step to improving overall productivity.
The most critical aspect of managing labor is measuring the percentage of labor being used to repair vehicles, commonly called DIRECT labor. This is commonly used by dealership shops to determine how effective they are in billing labor but is also to applicable fleet shops. Dealerships strive to keep DIRECT labor near 95% or higher while fleets typically operate in the 85 to 90% range.
INDIRECT labor is the inverse of DIRECT labor, it is time paid to a technician but not spent repairing a vehicle. Fleets typically have higher INDIRECT labor due to other duties assigned to shops such as moving equipment, cleaning work area or many other tasks.
UNALLOCATED labor is time paid to the technician but not accounted for in DIRECT or INDIRECT. Typically, discrepancies between systems (payroll vs repair systems) is the cause of UNALLOCATED labor. Steps must be taken to keep UNALLOCATED labor as near to zero as possible.
Measuring and trending these three areas will help you begin to get control of labor productivity.