Episode Transcript
*This transcript was generated using Artificial Intelligence. Errors may occur. If you notice an error, please contact [email protected].
Uwe Kleinschmidt (00:00:06):
Good morning and good afternoon. We have big shoes to fill today because Tom couldn’t do the host today, so we will jump in and I’m sure we have a lot to talk about. Let me introduce first, although he doesn’t need an introduction. Frank Scandura, welcome Frank. I’m really excited to have you on the panel. Again,
Frank Scandura (00:00:37):
Thank you very much.
Uwe Kleinschmidt (00:00:40):
I’m a hundred percent sure we’re going to have a lively discussion. And as always, Bill, he’s not lurking in the background anymore.
Bill Connor (00:00:51):
Nope, they dragged me out.
Uwe Kleinschmidt (00:00:53):
Very cool. Yeah, Bill has over the years always contributed the gems and the real content, so I’m really glad to have you on.
Bill Connor (00:01:07):
Glad to be here. Would be great to go ahead and prize some great information out of Frank too.
Uwe Kleinschmidt (00:01:13):
Yes, that’s the goal
Frank Scandura (00:01:16):
And it won’t be hard.
Uwe Kleinschmidt (00:01:20):
Everybody in the audience please feel free to ask your questions, leave comments. We will see how we can introduce them in the discussion. I know we stole in name John Long invented with the production manager and put that in the title. So John, thank you and thanks for joining. So today’s topic is the role of a production manager, and if I may extend that, is the role of a foreman in the Sharp the right thing to do? And is it only for big shops or can everybody benefit from it? So we have achieved our goal. If at the end of the podcast you have a good understanding what those role could be in your shop and you can make easier decision whether they’re right for you or not. So with that, Frank, if you wouldn’t mind, talk about yourself a little bit. So everybody who doesn’t know the in and outs about your career can be in the same or we are.
Frank Scandura (00:02:34):
And just for those who don’t know, I started honestly working on cars in my driveway and parlayed that into working at a gas station. So I’m that old where we used to get the cars fixed at the gas station is not where you bought your Twinkies and got your gas, parlayed that into a service advisor role at the Mercedes-Benz dealership in Las Vegas, which I thought was the best opportunity in the world. Turned out to be a bunch of guys just running around complaining about their miserable lives. It was sad because they had an opportunity to do something wonderful there and then to become a shop owner and then to learn how to be a business owner, which is completely different than being a really good technician or a really good service advisor. And I’ve taught myself over the years how to be the best diagnostic tick there was because I didn’t have anybody around to teach me and lead me and parlay that into learning how to be a good businessman. And now I coach other shops. So through Transformers Institute, we have a couple of mastermind groups that we do for Shop Foreman specifically. So this is an exciting way for me to share the importance of that role and teaching shop owners just how to be shop owners. And I’m going to touch on that a little bit today, so that’ll all come out later. I really do appreciate the opportunity of being here very much. Thank you.
Uwe Kleinschmidt (00:03:53):
Thank you. It’s always a pleasure. So let’s start with maybe why is a production manager a good idea? And Bill, if you could share our little prepared image, that would be awesome.
Bill Connor (00:04:15):
Sure. I would assume that you can see it
Uwe Kleinschmidt (00:04:20):
Now. Yep.
Frank Scandura (00:04:22):
We can see it.
Uwe Kleinschmidt (00:04:28):
And so let’s give ourselves a little bit of time to digest it. A service advisor has always been, in my eyes, a superman
Frank Scandura (00:04:41):
Or a woman.
Uwe Kleinschmidt (00:04:42):
Be careful or woman. Yes.
(00:04:49):
And I mean I have talked to hundreds of service advisors throughout my career, especially without arrivals. And I mean, I’m in awe how a service advisor can manage all those interrupts and be super productive. And so when we did the TVP, we were looking into those really, really closely with Bill’s support and found ways of helping the service advisor. But as I said before, John Long introduced a specific role because we identified that basically two things are happening. A service advisor is really a person who is towards customers motorists, and at the same time, building an estimate requires ideally, uninterrupted, meticulous attention to building the right estimate and how to use sre. Those two that’s really tough in all the additional interrupts. And so the idea was born by John to really separate out a role as a production manager and we started supporting that in the TVP where there is a clear assignment of responsibilities, which opened up so much opportunity for the service advisor to focus on customer service. And the results were highly convincing. And go ahead,
Frank Scandura (00:06:43):
You got to think about what we’ve accomplished over the last few years. So I think personally going from the technician writing down a few recommendations to the service advisor, just taking that into quick estimates and calling a customer, it’s a completely different world now. We are asking them to take pictures, edit those pictures, annotate those pictures, get the educational information to the customer so that I think there’s a lot more being done for the service advisor, which is preventing them from spending time with a customer. And that’s the exact reason why taking some of those responsibilities and giving it to someone else who’s really good at that, really good at those details makes a huge difference.
Bill Connor (00:07:33):
The shop owner, your goal in this exercise is to put the right button in the right seat.
Frank Scandura (00:07:37):
That’s absolutely it, right? Yeah. Get the right person in the right seat on the right bus.
Uwe Kleinschmidt (00:07:44):
Devil’s advocate, that’s another person I have to pay. It’s an important role, which is kind of the lifeblood of the shop. So how do I justify that cost?
Frank Scandura (00:08:00):
Sure. Anytime you can envision an increase in sales, well, let’s back up a little bit. Are your margins correct? Right? Do you know your numbers? You’ve got to know your numbers, you’ve got to be really confident in your numbers. You can’t be in the back of the shop diagnosing it a card that no one else can figure out. You can’t be upfront writing estimates and talking to the customer. You have to run the business so you not have to know your numbers. So it shouldn’t take very much math to figure out if I can get an X percent increase in my overall ARO and take the emotional pricing away from the advisor and truly focus on those gross profit dollars, which was a huge game changer at our shop just to be able to focus on the gross profit dollars instead of gross sales. And percentages made a huge difference for us. For example, we don’t pay our bills and I’ve heard a lot of guys say this online with gross profit percentage, I have to have dollars in the bank to pay the bills. I have to have dollars in the bank to pay myself. So when you start to focus on those, it’s very easy to see I need 10% and that’ll pay for that person and then some.
Bill Connor (00:09:13):
But when you talk about the emotion taking emotion away from the service advisor, is there any other reason because that’s their personality profile is friendly and enthusiastic and so on and empathetic dealing with the customer. Do you find that sometimes that they had a hesitation to price things accordingly because of the different mix of personalities?
Frank Scandura (00:09:35):
Well, here’s an example. So technician recommends water pump. So it’s very easy in the busyness of a service advisor to say, you need a water pump, a couple gallons of colon, here’s what you need. And a customer goes, oh my gosh, I wasn’t expecting that. What can you do for me? And automatically now it becomes about the price of the job. So if you have a production manager who’s trained to say, okay, the car needs a water pump, how old is this car? Should we recommend upper and lower hoses? Should we recommend a thermostat due to age? Should we do a complete cooling system flush? Now I’ve got an entire package for that repair. So now when a customer says, oh my gosh, I wasn’t expecting it. What can you do for me? Well, it’ll cost you a little more later, but let’s do the hoses later, or maybe we should do this later. And now I’m not discounting it, I’m customizing the package to fit their needs. And I think that’s what happens when we’re just busy, busy, busy, busy, busy, busy versus your job is to get the entire package priced out on that job correctly. Brake pads, rotors, an anti squeal brake kit, greasing the pins, do I need new pins? Do I need new hardware? Here’s a little extra time to get the rust off the hub versus writing up a job for brake pads and rotors. That’s all training. And I think that all increases the bottom line with some really profitable numbers.
Bill Connor (00:11:05):
But taking that particular responsibility away from the service advisor, putting it into a specialist type role, and having the customer or the service writer work on their presentation skills and their value skills is a higher priority for getting everything to go through to shop a lot more smoothly and a lot more profitably.
Frank Scandura (00:11:27):
Exactly right. And now they can truly spend time building that relationship, right? Because customers do not buy parts and pieces, folks, they don’t buy brake pads and rotors, they buy trust. It’s our job as service professionals to bring value to what we’re offering them. So when I say, here’s a complete break job package and this is what it includes and this is why it’s such a great deal for you and this is why I can stand behind it for three years or four years or whatever your warranty is, it just brings in more value for the motorist.
Bill Connor (00:12:04):
And when you’re talking about personality profiles of people to fit in these jobs, do you go ahead and look for a certain type of personality to go ahead and be a service advisor? So maybe they’re more friendly, but maybe they’re not quite as detail oriented. What type of personality fits in that bucket?
Frank Scandura (00:12:22):
The more technical they are, I think the less personal they are, right? I’m always joking around what I’m teaching and training and speaking that we need to keep the technicians away from the humans. Now I’ve been a tech so I can say that I’m speaking from experience because when you’re a technician and you’re zero focused and this is all you can focus on, things tend to come out of your mouth that shouldn’t be heard by mom or grandma. And there’s nothing wrong with that. It’s just the nature of the beast, so to speak. So it’s really important to have them do what they’re really good at, write those stories up, answering the why, because the first thing a customer is going to say is, why do I need that? And the service advisor needs to understand the why before they present it to the motorist. Nothing worse than a service advisor going, oh, let me check run back there. Why do they need it? Okay. Alright, Mr. Customer, that’s why. Oh, another question. Oh, let me run back. Let me check. They need to have all that information at the time of presentation.
Uwe Kleinschmidt (00:13:23):
Yeah, if I may, service advisors are also translators technician language into layman’s language. By the way, in our business, the same is exactly true for software developers. It’s just a different world. And if you don’t know the technician lingo, you get lost pretty quickly. And another observation I had as a motorist is a lot of those work orders are also written part centric repair and replace part. So motorists are kind of driven to think in parts, looking up the parts online now and then wondering why it’s so much more expensive when it’s done by a shop, which is the completely wrong lane. So I would simply from a motorist perspective, suggest think in your can job language set up what a motorist will see when they read it on the invoice or estimate, right? It’s all about the result, what we are trying to create and not so much the pot exchange.
Frank Scandura (00:14:51):
And what we’re trying to do is educate, inform, and give them peace of mind,
Bill Connor (00:14:57):
Right? So as hard as it is to go ahead and gather up employees in this particular marketplace, what if you had to go ahead and break this down into different roles and the jobs that would perform in them roles. Do you want to get into defining that a little bit?
Frank Scandura (00:15:18):
So the role of production manager first.
Bill Connor (00:15:22):
So if you’re talking about taking things away from the service writer, what are the type of busy work that you want to take away from them? And then we’re going to use that to go ahead and fold it into our production manager and maybe also a shop foreman type role. So they might overlap at times and as the shop grows, so I’m talking more about the career path from somebody as they come into the industry all the way to the time that they’re bent, folded and mutilated and they can’t bend over a car anymore. What is the path that you foresee?
Frank Scandura (00:15:56):
The very, very first thing that I think should be taken away from service advisors parts, looking up and managing parts. I have a friend of mine that was looking at a shop to purchase and he checked around the area and he talked to some of the parts vendors and he had one of the parts vendors tell him that if you just managed core returns in that company and didn’t do anything else different, you’d make a hundred grand a year profit right away. That’s how bad that particular shop was at just parts core returns alone. Forget the returns. Whoops, we didn’t need it. Whoops, I ordered too many. Okay, forget that. Just that alone is going to make an enormous difference on the bottom line, one of the things we need to change in our shop is the technicians looking up their labor, right? So we did a little math yesterday practicing this and here’s what you guys need to know.
(00:16:54):
What is your effective labor rate times two, and that is your potential income per hour per tech. So in my case it’s $249 or so. So let’s say 250 because I like round numbers. Divide that by 60 minutes, that’s $4 and 17 cents every minute. A technician’s not productive, not being brought into the company. So let’s go step further. If he’s spending three hours a week and I’ve got six technicians, that’s 18 hours a week times $250, that’s $4,500. Can I hire somebody if I could put another $2,000 of gross profit dollars in my pocket, can I hire another person to take these tasks away from not only the advisor but the technicians and let them focus on the jobs I’ve hired them to do? I think so, and I’m going to venture a guess that a bunch of you could actually do the same math in your shop at different levels.
(00:17:56):
When do you need a shop foreman? You need a shop foreman when you are the shop foreman, okay? If you’re the shop owner and you as a technician and your attitude is, well if anything goes wrong, I could just go in the back and help them out. Well, that’s not your job anymore. You’re the company owner. Your job is to set the goals for the company. Your job is to hire the superstars. Your job is to focus on what’s important to grow your company and ensure the success of the people around you. This is when you start to need adding those different positions.
Bill Connor (00:18:30):
So far we’ve taken away the looking up the labor and looking up the parts from the service advisor. Is there anything else that we’re taking away from them? Are they handling all the dispatching still? What other things? I mean if we’re going to put this other guy in this bucket and go ahead and pay him, I’m trying to go ahead and find out where I’m going to go ahead and get the task for them to do and also the value of getting them to do it.
Frank Scandura (00:18:57):
Sure, absolutely. Positively. I think between shop form and shop lead, lead tech, whatever you want to call it in your company and now your new production manager should both work hand in hand side by side for work dispatch. That production manager should know what kind of work he could just fire into the shop without asking anybody. He should also know what he needs to ask. Hey, this car’s got some weird codes, keep stalling. And all these weird things keep happening. Hey, that needs to go to X, y, Z. He’s more equipped to handle that. Or Hey, shop foreman, maybe you should look at this car real quick. Okay, good. Now that helps with that workflow and it gives the technicians a go-to person without standing behind a service advisor waiting to finish three phone calls, four estimates and nine customers. I’ve always said when a technician is standing behind a service advisor, the service advisor doesn’t know if the technician wants to take ’em out to lunch or just take ’em out. It’s a very high stress situation when somebody’s standing behind you like that, then we just keep that production going, keep that production going. Quit wasting time and quit having these gaps.
Uwe Kleinschmidt (00:20:23):
So let’s talk about Bill. Could you put the other image up where we talk about production manager and shop foreman? This sounds for shops which have three techs sounds all, wow, that’s an overhead I have to manage and pay, right? So I think we should clearly talk about that is a role doesn’t mean necessarily it has to be a full-time person depending on the size of your shop and how you grow. I think the more important thing is to define that role in its responsibilities and tasks. And maybe initially it is done by the same person. So how do you think about that, Frank?
Frank Scandura (00:21:10):
I like the idea. Let’s say it’s a smaller shop. Let’s say two techs, one service advisor, you’re busy, you’re busting at the seams, you put on the third tech. I know you’ve experienced this because I’ve experienced it and if I’ve experienced it, everybody has. You put that third tech on, now you’ve overwhelmed the service advisor with more inspections results, more diagnostic results, and now he can’t keep up with keeping three guys busy. So you went from the parking lot full of cars to I don’t have enough work for my three guys. What happened? Time for help upfront. And that’s where that could be a, let’s call it an assistant service advisor. Now I need you to help me with dispatching, I need you to help me with parts. Let’s just use those two things and there’s a lot more writing estimates and whatever I think would be a critical part of that.
(00:22:01):
Now I’ve got the ability to sell more work, get more cars and answer more phone calls. My workload can go up. Now I can feed that third tech. Now I’ve got three guys in the back and every once in a while, Johnny, he’s awesome and he’s always helping everybody else and shop owners. We tend to take our best techs and go, boy, you’re really good at this. You should be the shop foreman. Then we turn around and walk away and leave them hanging like what just happened? And that’s why we’re doing that shop foreman mastermind group now to help these young men and women learn how to be leaders and learn how to manage the people they used to go out and have beers with. So if you have this plan and think about doing this guys, guys and gals, if you write down your business plan, when I get to three technicians, I need to X, Y, Z.
(00:22:48):
When I get to four technicians, I should have two service advisors and somebody needs to be in charge of the shop and I’m going to need this much space, this many lifts. What are my sales goals? How am I going to get there? And I think then like Bill was saying, now I can create a career path for somebody. You want to work on cars, okay, I’m going to start you out with the real basics. Let’s get you in a trade school or a college program and come on down after school and we’re going to show you the basics. Now let’s get on some of these apprenticeship programs that are coming up and get these guys on a career path. If you do 1, 2, 3, you’ll be here. Oh, you did that. Now you’re here. Look at your pay increases, look at your career path. And in a couple of years we could start growing really solid technicians and I think that’s what we need to do, right? The trees full of text, that low hanging fruit, they’re gone. Somebody came in, the developer came in and tore down all those. So now we have to plant new ones.
Bill Connor (00:23:48):
So for the guys that have been doing it for a long time that are actually looking to exit out of the industry, a lot of their skillset sets are actually suited for some of these different roles that we’re talking about to where we can continue to get value out of them. And now if you’ve got to define career path in your particular organization, now you can say, help me get to this areas and then these are the other slots that come open as you help me obtain the overall shop goals.
Frank Scandura (00:24:14):
Bill, that’s so important too because a lot of guys are aging out without a plan. Their bodies are broken. I interviewed a guy, he says, man, I got maybe one more year left. My arthritis is getting real bad in my hands. I don’t know what I’m going to do. That’s a guy who’s a production manager, that’s a guy who can help write estimates. That’s a guy who can advise a younger tech. A friend of mine, his dad lives in Texas, he’s in his sixties, still working on cars at a body shop, doesn’t have a plan. That’s not a really good career path. I’m going to work until they drag me out in a body bag. So let’s help these guys come up with these career paths. Let’s give them something to look forward to. Let’s create these positions that make not only our businesses more profitable but more enjoyable for everybody else around.
Bill Connor (00:24:58):
Well, that technician that’s kind of worn out body-wise, they still, they’re very highly detail oriented. They’re technical. They understand the difference between what a book time might be and what realism might be. So that’s an ideal person for either a shop foreman or a production manager type role. Is that correct?
Frank Scandura (00:25:15):
Sure is absolutely correct.
Uwe Kleinschmidt (00:25:18):
And how do you do this? Let’s go back. It was a really good start. You have two techs. You add the third tech, your assistant service advisor slash production manager. How do you pay them and how do you avoid that? The service advisor is not giving them the work and still holds on to what he’s done before because he thinks he makes himself partially obsolete.
Frank Scandura (00:25:51):
I think the best plans are going to include some basic hourly pay. I call it food and shelter pay, right? It’s not enough to retire on. It’s not enough to maybe get a new car. Maybe it’s not enough to go on vacation, but then I have to throw in some opportunities in there. Here’s my milestone and let’s take specifically man, money’s kind of tight. How do I know this is going to work? Okay, you’re going to pay a guy, let’s say 50 grand a year. What do you need to do in sales to get to that point where it’s not uncomfortable? Now that becomes your sales goal.
(00:26:35):
Am amazed at how many shops don’t know how much they need to sell to be profitable. They assume they know go, yeah, man, if I could do like 20 grand a week, I’m in pretty good shape. Okay, make that a number for me. What does that put in a bank for you? He goes, well, I don’t know, but I think that kind of covers my expenses. You have to know. And then you just put that number to it. So here’s your sales goals guys, and if you hit this goal, which includes a sales number, gross profit dollar number for example, here’s your share. I think John Long calls it profit sharing. Here’s your share. I’m sharing some of the wealth with you if we make it here, here’s what you can do. And I think that’s a really great way to incentivize the advisor, the assistant advisor slash production manager, and even a shop foreman, right?
(00:27:34):
Shop foreman, everything’s based on hours. If we don’t sell the hours, the money doesn’t come in. If the money doesn’t come in, we all die, right? We’re going to have to go home and eat the dog. Don’t want anybody to have to do that. So here’s the number, this is what we have to do and you really need to set your guys up for success. 40 hours of labor should be the minimum expectation for your general tax minimum. A good guy we all know can do way over that and us really good smart supermen and women shop owners who did it, and I don’t understand, I used to bill 80 hours a week when I was a kid. Well, listen, not everybody can do that today. Cars are far more complicated. There’s a lot more going on. What are your minimum goals? How are you going to get ’em there? Then everybody’s working for the same goal and they’re not all sitting back thinking, oh, we’re just a scrooge McDuck rolling around on our mattress full of dollar bills. Go ahead, Bill.
Bill Connor (00:28:32):
So do you have your production staff as far as on your P and L? You go ahead and measure them differently than your sales and support staff. And so do you have a certain percentage number that you’d like to keep your support and sales staff in versus the production side of the shop?
Frank Scandura (00:28:53):
I’m not sure I understand that. Say that again.
Bill Connor (00:28:56):
So your sales staff and your support staff, all your office people, do you have a certain percentage of total sales that you want their total payroll to be underneath and use that to go ahead and determine when to add a person in a particular area.
Frank Scandura (00:29:13):
So I think that adding people to specific areas is identifying those bottlenecks and getting ’em opened up. When you’ve got technicians, they’re on time in the morning waiting for work to be dispatched. You’ve got a huge problem upfront. A lot of service advisors tell everybody, yeah, we open at eight. Come on down, eight o’clock, eight o’clock, eight o’clock, eight o’clock, eight o’clock, and you’ve got 15 people showing up at eight o’clock. Now he’s got 15 tickets on a counter before you start dispatching ’em. You can’t do that. You’ve got to have things in place. And that’s where if you’re firing off cars now, get ’em in every 15 minutes instead of everybody at eight o’clock because that guy’s also telling everybody to come at five o’clock to pick ’em up. Then you’ve got the same bottleneck. Customers don’t feel special when we do that. So break it up, space it out.
(00:30:15):
And this is where it’s so important to be that 30,000 foot view. Let me see what’s going on. Oh, I see. Here’s a problem. I’ve got 10 people dropping off their cars at eight o’clock and I’ve got 10 people trying to pick ’em up at five o’clock and we’re all going crazy, making mistakes, leaving things out, not doing exit interviews, not making next appointments, not going over recommendations. It’s only money. Yours. Okay, so Dane asked the question too. Let me answer. If production manager comes out of the shop, does that individual still have some tech responsibilities? 10, 20 hours or just move to a hundred percent Production manager, how big is the shop? Right? Two techs probably could still do a little work. Six techs probably still going to be a hundred percent production manager. So it all depends on the size of your shop. You really need to see what’s going on. You need to measure, you need to manage what you’re measuring to make those decisions.
Bill Connor (00:31:23):
So getting down into that also still back on service advisor duties versus production manager. Does the service writer go ahead and take the incoming appointments and put them on the calendar? Or is your production manager handling that?
Frank Scandura (00:31:37):
I think that’s an individual call depending on the production manager’s skillset. I think the service advisor can be trained better to answer those questions about, well, what do you need? Why? What’s it doing? When’s it doing it? How often is it doing it? Who’s it happening to? Oh, by the way, I noticed the last time you were here, we needed to rotate your dry shaft and lubricate your monthly bearing. Should we do that for you? When you come in getting this all typed out nice and neat, pre-writing that appointment, which is a critical way of satisfying your customers, right? There’s nothing worse than a customer taking the time to call you up and saying blah, blah, blah, blah, blah, blah, blah, blah, blah. How’s Thursday? And then you have him show up on Thursday when there’s 12 other people in the lobby and the first thing you say is, oh, what did you come in for? Totally unprofessional. Totally unprofessional.
Bill Connor (00:32:37):
Yeah, I think appointment
Uwe Kleinschmidt (00:32:38):
I’m making is just kind of the result of the activity. I think personally, if I have one point of contact as a motorist throughout my whole visit, that makes a huge difference. Although we are big on specialization, I think that the human interaction should be with one trusted source and that’s also the person the digital inspections are being sent from. They come from, although I don’t talk to that person, but I know the inspection results are presented by that person, I believe. I mean specialization, the moment it hits the personal interaction and trust building, it’s going to be tough to do that, I believe.
Frank Scandura (00:33:32):
And we’re talking about building relationships and can a production manager make appointments? Absolutely. So if he’s helping with the phone, Hey man, I was wondering if I can bring in my car on Friday. Sure, let me put you down on a schedule. I’m going to have Johnny call you and follow up with any questions. That would be a great way to help get the service advisor control of their time
Uwe Kleinschmidt (00:33:56):
It takes to interrupt.
Bill Connor (00:33:58):
Yes. So also if we’re unloading some of this other stuff from a service advisor, would the service advisor be one that does like five day, thank you, follow up phone calls and things like that. So we’re moving them all into things that are about relationship building versus busy work.
Frank Scandura (00:34:14):
Exactly right. Exactly right. And I’m talking to a shop owner now. Hey man, my phone stopped ringing. What do I do? Get on the phone and call every single customer and see how they’re doing and ask if they need anything. Oh man, really? Oh, it’s kind of uncomfortable. Oh wow. Oh really? Well then stop complaining that the phones aren’t ringing because you’re not connecting with your customers. Get on the phone. Such an important part of what we do is connecting with our customers. What did Zig Ziglar say? I think people don’t care how much until they know how much you care.
Uwe Kleinschmidt (00:34:55):
That’s a good one.
Frank Scandura (00:34:56):
Okay, so we really have to, it’s all about caring. Do you care? Prove it.
Uwe Kleinschmidt (00:35:06):
Yeah, go the extra mile.
Frank Scandura (00:35:08):
Yeah. And now let’s give our service advisors the ability to go that extra mile, lock their phones up in the locker. Because what do service advisors do as soon as they get a break? Man, they go right on Facebook. I didn’t have time to call today, boss. I’m sorry. I know a shop owner. I think he’s like a hundred phone calls a day minimum. His service advisors are required to make minimum. And what he said was absolutely because somebody asked him in the meeting, well, how do you get them to do that? He goes, what do you mean? That’s the minimum. You have to make a minimum a hundred phone calls a day. That’s how you keep your job. And he just gives them the opportunity to do it.
Uwe Kleinschmidt (00:35:55):
I would love to go back to the gross profit calculation and the involvement of the staff and create transparency there. How often do you do that? Is it daily, weekly, monthly? What’s a good rhythm?
Frank Scandura (00:36:14):
When we have our morning service advisor huddles, the manager goes over where we’re at in the tracking of our sales and the tracking of our gross profit dollars for the month. And if it’s off, why
(00:36:28):
We had a fiat transmission, eat our lunch, killed our gross profit dollars, everybody understands why we’re off. So we’re able to identify those things and it’s very transparent in our shop because everybody in our company knows, even though they will probably tell you they don’t, they tend to forget, blah, blah, blah, blah, blah, blah. There’s Frank talking again. They know what it cost us to run our company every month because I know what it costs us. And if I don’t know what it costs us to run the company every month, then I don’t know how many cars I need. I don’t know how many dollars I need to bring in the door to stay open. And those shop owners that are struggling and it’s like, man, I never have enough money and things just aren’t right and I can’t believe how hard we’re working. Well, you have to know this stuff so that you can make those changes. So everybody knows all the time it’s talked about regular gross profit dollars, why it’s important. That’s how we make money and that’s how we stay open.
Uwe Kleinschmidt (00:37:28):
And you prepare that the night before and then do a 15 minute meeting. Is that about how it works?
Frank Scandura (00:37:34):
Our process is twice a week. Each service advisor sits with shop foreman and manager, Deborah and myself, and we go over the list of open cars, go over the numbers and review any problems, any decisions that need to be made. And it’s usually like Frank saying, why is that car still here? What’s going on? What’s the problem? And sometimes lately it’s parts delays. Sometimes it’s just we get that one car that we want to set on fire, the problem, machine shop delays, whatever the case may be. But by having this discussion and everybody’s in the loop, right? Because before we did that, it was like customers calling up going, Hey man, what’s going on with my car? And everybody’s going, I don’t know. I don’t know. I don’t know. So now everybody knows. And then we have weekly shop meetings every Wednesday, lock the door forward to phones, 30 minute shop meeting issues are discussed, reviews are gone over whatever we need to talk about. We have quarterly safety meetings. We have an insurance renewal coming up for health insurance. So there’ll be meeting for that. That’s how we communicate with everybody.
Bill Connor (00:38:41):
This is starting to sound more like a multimillion dollar business operation than a mom and pop shop. And that’s a good thing. And so we get a lot of people that say, well, I don’t want to share the numbers with my employees and I wonder if you share the same philosophy. I do that if we go ahead and help our employees, everybody in the building understand how they contribute to gross profit, then one of two things happens. Either they stay with us forever because they know they can’t go out and be the low price leader. Or at least if they go out into marketplace, at least they don’t be the guy down the street that’s trying to go in and formulate the race to the bottom as quickly as possible.
Frank Scandura (00:39:18):
So years ago I had an employee make a comment way, way before AutoVitals where we just gave everybody a terminal and they had access to our shop management system so they can put their notes in it. We were paperless before digital, believe it or not. And they could see parts cost on the screen and somebody made a comment about, boy, you sure mark up parts quite a bit. So our very next shop meeting was Frank, got $101 bills. And I said, let me explain where every a hundred dollars that comes in goes. And it was like, here’s eight bucks for rent, here’s 20 bucks for labor, here’s $24 for parts. And I went right down the list of all our expenses and I had four bucks left. I said, now do you understand why we mark up a parts? He goes, well, man, I never knew.
(00:40:09):
Yeah. So that’s when I learned sharing the numbers takes that little chatter away. There’s some things Deborah and I hold very close to our heart that’s very personal and private, but for the most part, what does it cost us to do business? How much do we need to do and where’s our expenses? How can my team help us curb expenses if they don’t know that we’re spending $5,000 to fix damaged cars? Because you won’t guide that guy out. It keeps hitting the pole, right? So that’s very important stuff that that same person probably doesn’t share his income with his kids and does not have a personal family written budget. So when his kid says, well, how come I can’t have it? I want it, I want it, I want it. It’s because he has no clue. We’re not teaching our children the importance of money, the value of saving, the value of saying, well, you know what? We don’t spend money we don’t have and this is our budget and if you’d like that, let’s budget for it and teach them how to do it. So probably same thing going on at home.
Bill Connor (00:41:08):
So it’s interesting that you’ve been doing this for many, many years as I have also using the production manager or shop foreman or whatever. But can you talk about the ability with using the today’s vehicle page, especially the technician view and the chat communication in the shop, especially with TVP, how that makes the life of those people a lot easier? And also it’s got an audit trail. So if something goes wrong, Frank can find out from a distance.
Frank Scandura (00:41:38):
You can’t manage what you don’t measure. So if everybody sees what’s going on and they can see the numbers and they can see the labor inventory and they can see the available hours, they can see the sold hours, they all know what they’ve got going on. I’m not sure if I’m answering your question correctly. So without the digital information that we have available to us, you’ve got somebody walking around the building with a piece of paper, do you know anything about this? Oh, do you know anything about this? How about you wasted time? The number one best improvement with the TVPX by far is the ability to communicate with everybody in the building whether they have a tablet or not. Thank you Uwe. Awesome. That was the one thing we were lacking. Now I can send a message up front, I can send a message out back, I can be messaged, I can keep doing what I need to do, keep the company running and be productive.
Uwe Kleinschmidt (00:42:36):
And how do you, if I may, texts are sometimes notorious in leaving the repair order open, although they don’t work on it anymore on the tablet or forget to check of a job so the numbers get screwed in the front and decisions might be wrong because the numbers are wrong. How do you establish a culture of guys if you don’t do this? What’s your a hundred dollars bill message to tell the techs too? Because I love this
Frank Scandura (00:43:12):
And it really is challenging because here’s another thing that a service advisor has the ability to see must now do that they never did before, was how long a tech is working on a car. Because it used to be, okay, I got a break. Let me grab my cigarettes on my way to have a smoke. I’ll ask the technician where he is at on that car so I can call Margaret. Well, they don’t have to do that anymore. So for the techs who don’t do it, and this is where I really like a shop foreman, walking the shop manager or lead advisor walking the shop, he still walk the shop a couple times a day. I can learn more walking through the shop, seeing what’s on a lift than I can talking to anybody. And it’s not uncommon for me to say somebody else make a comment about a car, say no, that car’s in the shop, it’s on the lift.
(00:44:04):
Nobody’s touched it in three hours. What? I didn’t know that because you haven’t been walking the shop and you learn a lot from doing that. So that’s still an important part. Even though we’re digital, we’re trying to keep everybody at their workstation completely different from constantly interrupting, constantly going to the technicians, where are you doing? What are you doing? Whatcha doing? Constantly coming up to the service advisor, come on man, where’s my job? Did you sell that job yet? So it’s just a matter of creating that habit. We have to create the habit. It doesn’t happen automatically. Technicians will all the time tell you, I’m working on two cars at a time. I have proven this scientifically. They cannot work on two cars at a time. Their arms aren’t long enough. So don’t tell me you’re working on two cars at a time. And I’ve learned something interesting about multitasking.
(00:44:54):
There’s no such thing. I cannot write an email and do this presentation at the same time. I can’t. What people are good at some more than others is multi remembering. May come over here and do that. Okay, what do you got? Okay, sure, lemme do that. I was over here doing this. I can go back. Lemme go to this. And service advisors in particular are very good at that interrupted phone calls and I’m working on an assessment. Lemme go back and do that. So quit lying to yourself. You’re not a good multitasker. You can’t work on two cars at a time. Watch those numbers. Watch the TVP and look for the elapsed time and be aware of it and don’t wait for it to blink red for crying out loud when it’s solid red message that technician, do you need more time? And that’ll help them. Oh, I’m sorry, I was doing something else. It’s a couple of tabs. There’s no reason for them not to close it and open the next one. There’s no reason for it.
Bill Connor (00:45:47):
The technicians should be keeping their tablet updated. They go along. But a lot of shops seem to be adopting the policy at a minimum at 10 o’clock, two o’clock and four o’clock. Everybody updates their statuses because that is the most common time to go ahead and notify a customer if something’s going wrong, if something’s going to get missed. So is that something that you guys practice or you just have guys go ahead and update as they get back to a stopping point?
Frank Scandura (00:46:14):
Yeah, so that’s my process of when you get to a stopping point is when I want to know what’s going on. I start something and I have to finish it. I start it and I have to finish this. I hope this comes over on a video. Well, and as soon as you interrupt me, you’ve opened up the opportunity for a mistake. The minute you come back and stopped me, I think I talked all the lug nuts. So I don’t need to check them. I already did it. I think I toed the oil drain plug because that’s what I was doing, but you interrupted me. So get your task done, complete your circle, then I will let you know where I’m at and then I will give you status update.
Bill Connor (00:47:02):
So you’re not the type of shop that’s going to interrupt your technicians and have ’em do that oil change that’s just walked in the front door and thinks they need it now.
Frank Scandura (00:47:10):
Yeah. Well your lack of planning doesn’t constitute an emergency on my part. Number one, it shouldn’t be right? An oil change is never an emergency. Never. I have to go out of town. I’ve got to get my oil changed before I go. Well, you’re like 500 miles, I think you’re going to be okay. What you need is an inspection. What you need is for the car to be checked over thoroughly to determine if the car’s ready to go on a trip. That’s what you need. So education, but an oil change on its own is never an emergency.
Uwe Kleinschmidt (00:47:43):
I mean, you touch on something which is I think a general principle. The more you interrupt, especially people who have to focus and because of complexity or whatever else, you lower productivity significantly. So how do you avoid that? Because it’s so easy. I need it now because everything is an emergency if I need it. Now, how do you teach the team to distinguish between real emergencies and the rest is going to happen much more effectively if you let the technicians in this case come to the natural step.
Frank Scandura (00:48:30):
This kind of goes into our return visit process, not always a recheck. And it’s not always a comeback. So it’s a return visit. And this is where having a foreman is extremely helpful. In our shop, the way I want it handled is if a car comes back within 30 days of a perceived problem that we either didn’t correct or has reoccurred or whatever the case may be, right? Customer says, car is just here and you left the boomerang in the backseat. So I’m back, call the shop foreman and now we have a discussion, review the history, review the notes, review the inspection. Is the customer wrong? Did the service advisor forget to read the notes on the QC inspection? It said this car is vibrating like a dog dump impeach bits. Did something else happen then? Because now the shop foreman is involved. I’m not taking a technician off a job.
(00:49:27):
So he’s got to make a determination. Soon as you’re at a stopping point in that job, we need to look at this car came back for something. And that helps prevent running in the back. What’s the service advisor going to do? Hey, the blue Pontiac is a recheck and it’s out front waiting for you. Maybe it is, maybe it isn’t. But it needs to be handled in such a way that we’re not accusing the technician of doing something wrong. We’re evaluating the situation and making it look like we really do care, right? Mr. Customer, we’re going to get right on it. Let’s pull it right in the shop. My shop foreman is looking at it, my lead tech’s looking at it, my head honchos looking at it, figure out what that title is, and give the customer some reassurance.
Uwe Kleinschmidt (00:50:09):
So the foreman is a buffer.
Frank Scandura (00:50:11):
Absolutely.
Uwe Kleinschmidt (00:50:12):
Right? The technicians can, they know the foreman has their back and they get the work they need. So that’s a big trusted precision.
Frank Scandura (00:50:26):
It really is. And I think that’s how a lot of shop owners create that position is to create a buffer between seven techs, three techs, two techs running up to him all the time. Chatter, chatter, chatter, chatter, chatter, chatter, chatter, chatter, whatever the case may be. So he really does have to learn those communication skills. He really does have to learn how to become a leader. And he is that buffer between the front and the back. It’s an interesting phenomenon. Anybody that’s worked in a dealership knows that sales and service are always pitted against each other. There’s always he said, she said constantly. And we have a little bit of that in our departments, and it’s really important to realize, look, we’re on the same page. We’re here to provide a valuable product to the motorist. We just happen to be fixing cars.
Bill Connor (00:51:15):
So as you’re stepping through this process, as you grow, you’re going to have your service rider or two and your technicians, then you’re going to have a production manager and shop foreman that might be all rolled into the same humanoid. And then as you grow even farther, then they get split into two unique jobs.
Frank Scandura (00:51:31):
Yeah, absolutely. And then it’s really easy to plan that out too because Bill, you made a comment earlier that I’m speaking like a multimillion dollar operator and I am. And I proudly say that I started in 2001 with two lifts, one helper, one porter, all of my personal tools and dream buckets and a leased scanner. That’s how I started in 2001. So I didn’t walk into a $3 million a year operation. I grew into it. And just by systematically recognizing bottlenecks and opening them up and putting people into place that needed to do the jobs that I shouldn’t have been doing
Bill Connor (00:52:16):
With the costs involved in actually operating a good quality business these days, automotive repair service and so on, they’re all going to be multimillion dollar businesses before long because real estate taxes, employees and so on are going to dictate that that’s going to be the minimum viable business model.
Frank Scandura (00:52:34):
Absolutely, positively. I’m coaching a shop foreman right now who said, yeah, my boss said they can’t afford to pay for X, Y, Z. Big problem, big problem. You need to figure out why you can’t afford to pay for something that’s going to grow your business. Pay your people a fair wage and do what you need to do. I dunno how to put it other than you owe it to the people that work for you to provide them an opportunity. You really do. Listen, go ahead. Go ahead. I got 15, 16, 17 people working for us, right? I couldn’t accomplish anything without them. I can’t be here chatting it up with you guys. I can’t be coaching the shop. I’m coaching. I can’t be coaching the shop and I’m coaching without the people around me. Hire the best people, pay them. Well, let them do the job you hired them to do.
Bill Connor (00:53:34):
That’s so important. Just get out of the way. You say, this is the course we’re going on, here’s where we want to go and why. And then get out of the way and just make sure you’re staying on course.
Frank Scandura (00:53:44):
Absolutely. Hire the people to do the job you think only you can do because I promise there is thousands of people better than me that I hire to do the job better than I could do it.
Bill Connor (00:53:57):
And then each of these roles, if you defined when somebody is in that role, their job is to go and get good enough at it that they make their job obsolete. They could pass it on to the next person and then go climb up the ladder, your career path that you’ve defined for ’em
Frank Scandura (00:54:12):
And why not attract real superstars and maybe it grows into multiple locations. My wife’s biggest fear is how am I going to do the accounting? How are we going to do payroll? How are we going to do this? How are we going to, well, I don’t know. I’m a visionary, so I’m going to hire somebody to figure it out. All out.
Uwe Kleinschmidt (00:54:34):
When did you realize that as you grew your shop, that those numbers, like gross profit is not just an accounting number, but it’s a motivational number?
Frank Scandura (00:54:47):
So last quarter of last year, we really started to focus on gross profit dollars and moved our team from a gross sales pay to gross profit dollars pay program. And we just did the math and we says, okay, we were paying this percent on sales, now we’re going to pay this percent on gross profit. They’re going to make the exact same money. So for them, it was really important for us to say, look, this is not a cut and pay. This is just a different way of figuring it. And the first quarter of this year was just mind blowing of the difference.
Uwe Kleinschmidt (00:55:22):
Did you feel that in the work or also in the input by the people that they now tell you give you more input on how to structure the business? Meaning here, the margin is too low. I have a hard time selling it.
Frank Scandura (00:55:40):
I’ve actually had the opposite. I think that margins too much. What should we do? Trust the process. Just trust the process. It’s really easy. And listen, shop owners are the worst service advisors we sell with our own wallet. It’s like, oh my gosh, has it rained in six months? I’m not going to sell ’em wipers. And then it rains for six straight months. So we tend to sell with our own wallets. And that’s why if you hire a professional, you just set the numbers in front of ’em and say, look, this is the job I need you to do now. Go do it better than I did it.
Bill Connor (00:56:17):
One of the most profitable things I’ve seen shops do is to go ahead and hire a service advisor and fire the owner, get ’em off the front counter and tell them the profit margins they have to have and just make sure they do it. Because if a customer gets the owner, they’re going to get a discount on something.
Frank Scandura (00:56:33):
And that’s really hard for owners to cross that bridge. And again, remember I said I started, it was just me and a couple of other folks. So when I did hire a service advisor and that customer called, Nope, only Frank can help me. Nope, only Frank can help me. Nope. Only Frank can help me. Advisor comes and says, dude, I don’t know what to do. This guy won’t talk to me. I said, all right, lemme take the call. Hey Bobby, how you doing? Hey Frank, can I bring my car in? I said, I don’t know. Let me check with Tom. Click Tom. He’s ready to make an appointment. So you have to do that. You have to let it go and let the people do what you paid them to do. That was a fast hour.
Uwe Kleinschmidt (00:57:10):
That was, and I have to hold back with tons of more questions. We have three minutes. Let me ask one, because when you are talking about service bay utilization, my wheels are spinning to what degree the TVP should represent that. And my fear is more information is not necessarily better. It’s already a lot to digest. And you have always this kind of, I wouldn’t say conflict, but you have technician utilization and service bay utilization. So how do you square that?
Frank Scandura (00:57:50):
That’s a hard, hard, hard ridge to cross because I tend to give two lifts to each tech. I have the space for it. And when that guy’s grinding out 35 hours a week, I’m thinking to myself, he only needs one. When I do that, walk through the shop and I see the front wheel is off the car waiting for a part for two days, he only needs one lift. So I’m not sure where I could see that on the TVP other than the production numbers and what we’re getting out. Because the guy that’s grinding out 60 hours a week with two lifts, maybe he should have three. So I don’t know where I can see that on A TVP. I hadn’t given that much thought. That’s where I get my visual, right? Let me do my, I think what Bill said at 10:00 AM, 2:00 AM 2:00 PM and 4:00 PM update. I think that’s a perfect time to do those walkthroughs, right? Because when you’re looking at a guy working on a car and your gum, Hey, how’s it going? Okay, that’s good. I just learned something, right? Whatever it was, I learned something. So that might be a good time for your walkthroughs.
Bill Connor (00:58:59):
So would there be a high value in a, BCP number that said, revenue per bay or revenue per operating hour of the shop, or something along that lines.
Frank Scandura (00:59:10):
Okay. And I do that manually by dividing my sales by number of bays. And I expect 15 to 18,000 per bay, I think 10 to 12 probably on an average domestic shop. And I know guys that get 15 to 18 on a general repair shop with four lifts, four tax, they just dial in on that process and dial that productivity up,
Uwe Kleinschmidt (00:59:34):
Especially people who don’t have the luxury of space, right? Yes. So is that a number you would put even on the TVP or is it just for a weekly analysis?
Frank Scandura (00:59:46):
I think in the BCP, let’s put it where we can measure it.
Uwe Kleinschmidt (00:59:49):
Okay.
Frank Scandura (00:59:51):
And you can even do that by day. If I want to do 4 million a year, I have to back up to, I need to do this much every day. Here’s my ARL, here’s how many cars I need. How many did you get in today?
Uwe Kleinschmidt (01:00:07):
Cool.
Frank Scandura (01:00:08):
Good show.
Uwe Kleinschmidt (01:00:10):
11:00 AM Pacific. Sorry, everybody but Frank. Wow. Thank you. We need to do this more often. Thank Bill.
Bill Connor (01:00:23):
Always. Lots of fun, lots of information. So this is one of the times I enjoy not lurking and learning.
Uwe Kleinschmidt (01:00:29):
You won’t anymore.
Frank Scandura (01:00:31):
My pleasure. Ken Anderson has a question to hit me up online, Ken Facebook messenger or something and I’d be more than happy to share.
Uwe Kleinschmidt (01:00:38):
Yeah, we will post the recording on Facebook and continue the discussion there. Would love to do that. Thanks everybody. Thank you Frank again.
Frank Scandura (01:00:49):
My pleasure. Have fun, guys.
Uwe Kleinschmidt (01:00:51):
Have fun. Thank you.