KPI #5 – Productivity

downloadProductivity and efficiency go hand in hand.  If your people are productive, but there are holes in your systems and procedures, both your team and you are losing valuable opportunities to make more money and complete more work.

I look at Productivity both individually and team-wide. The reason we need to view it from both angles is simple – each production employee(or technician) is at a different skill and experience level, and therefore must be evaluated at the level they are at. For example, in the automotive repair industry, a tire and lube technician is not expected to be able to perform the same work as a Master Certified Technician, who has both extensive training and years of experience.  One of the ways an automotive technician benefits from those years of training and experience is by being able to identify problems quickly and complete repairs in less than the labor guide time. A technician with 2 years of experience may do a standard brake replacement in 2 hours, although the commonly allotted guide time is only 1.5 hours. The Master Tech can normally perform the same job in about 45 minutes and therefore they make more money by being able to do two brake jobs in the same amount of time as the less experienced technician. The customer is charged appropriate to the guide time, so that they never get undercharged or overcharged based on the experience level of the technician.

When I look at productivity, I ask the owner/manager to evaluate the skill level of each production employee based on training and experience. This gives us an idea of how many producible hours can be sold for that employee. In the example above, I expect the less experienced technician to be able to produce fewer hours of completed “guide time” work than the Master Tech. Different schools of thought and organizational structure may affect this, but overall the Master Tech will produce more, so there is a higher expectation put on them.

After the number of producible hours is determined, we start looking at the past 8-12 weeks and seeing how the production employees stack up against this measure individually and as a team. If they are on target, we move forward. If they are missing the mark, the questions begin:

  • Is the individual/team properly trained?
  • Are there system/process issues reducing efficiency (ex., remember those “unpaid processes” we talked about last blog? Can they be adjusted to reduce the time needed to complete them?)
  • Are excessive smoke breaks or cellphone usage causing problems?
  • Is there an issue at the SELLING point? Are the producible hours not being sold up front?
  • Are marketing and advertising efforts bringing new customers in to buy?
  • Are marketing and advertising efforts bringing customers back to buy again?

The goal is to find the weak spots and fix them. Often you will find there is more than one.

All of the KPIs I have highlighted are ones I specifically target for any service industry business. If you think your business could benefit from a FREE consultation, please contact me via LinkedIn, https://www.linkedin.com/profile/view?id=69955082

Or connect with me on Facebook https://www.facebook.com/SeamlessCoaching.

 

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About seamlesscoach

www.seamlesscoach.com
This entry was posted in Business, Business Coach, client, Coaching, Confidence, Conflict, Conflict Resolution, Consistency, Customer Service, Details, Executive Coach, gross profit, gross profit margin, gross sales, leadership, loyalty, operating costs, organizational growth, productivity, sales and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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