© 2015 Auto/Mate, Inc. All Rights Reserved.
by Mike Esposito, President and CEO, Auto/Mate Dealership Systems
This article is a summary of a presentation given by Mike Esposito at the 13th Annual Digital Dealer Conference & Exposition, and appeared in the January issue of Dealer Magazine.
It’s what I like to call a conundrum: In the last decade, the volume of vehicles on the road has increased, the average median age of vehicles has increased, and the total number of service facilities in the U.S. has decreased. This is all good news for dealership fixed operations departments, and the obvious result should be higher profits. Yet, the latest data from NADA indicates that dealerships’ fixed ops net profit has been trending down the last three years. What could be the cause?
One major reason is that many service departments are behind when it comes to implementing technology. Many managers and employees remain resistant to change, sometimes for no better reason than the “we’ve always done it this way” mentality. Also, some DMS providers have been slow to innovate when it comes to their fixed ops modules; any new technology should be easy to use and adaptable to a dealership’s processes, not the other way around. One example is auto dispatching.
The fundamental goal of auto dispatching is to increase service gross and customer satisfaction. It is not, and I repeat NOT to eliminate the dispatcher! Nor is the goal to save money on salaries. Auto dispatching increases efficiency by assigning the right technician to the right job at the right time. The typical results are substantial; anywhere from 15-30% increase in labor hours sold. Compare the following two formulas that show a service department’s gross profit before and after auto dispatching:
5 Technicians turning 9 hours/day = 900 hours/month X $75 ELR = $67,500 sales X 70% = $47,250 GROSS
5 Technicians turning 12 hours/day = 1200 hours/month X $75 ELR = 90,000 sales X 70% = $63,000 GROSS
Result: $15,750 increase in gross for the month
Have I piqued your interest yet? The first step in implementing an auto dispatching system is to determine your current level of dispatching. Review the table below to assess your service department’s current level:
Types of Dispatching
|Printed RO’s||Printed RO’s||Electronic RO||Electronic RO|
|Manual Route Sheet||Electronic Route Sheet||Electronic Route Sheet||Electronic route sheet|
|Hand Written Stories||Tech uses PC to look at work and enter story||Tech uses PC to clock in and add stories||Tech uses PC to clock in and add stories|
|Parts request by walking around||Parts request done electronically||Parts request electronically||Parts request electronically|
|Manually dispatched||Manually Dispatched||Manually dispatched||Tech requests work from auto dispatch system|
|Dispatched by computer with dispatcher override capability|
Once you’ve determined where you are, set a time frame for your goal of getting to the next level. Don’t expect to do this overnight: transitioning to a fully automated dispatch system takes time. For instance, if you are at a manual level, it might take an entire year to get to a fully automated level. If you’re at the semi-manual level, it may take three months to get to the Electronic RO stage and another six months to get to the automated level.
Steps Involved in Setting Up an Auto Dispatch System
These three steps will have to be accomplished over time in your DMS, and you will probably need to consult your DMS provider for help along the way:
1) Make a list of skill sets and assign a skill code and a pay rate for every skill; i.e. general service, tire service, inspection, brake repair, HVAC repair, etc.
2) Determine and enter each technicians’ skill level for every skill set. The best way to determine this is to simply ask the current dispatcher, and/or to review a service tech’s RO history and look at the types of ops he has been assigned to.
3) Determine a RO or job weighting system. This is the most complicated part of the process. Typically a point system is used, with the points being user defined. The points determine the importance of a job and will change according to different parameters, i.e. if a customer is waiting instead of picking up the job will be weighted higher, and of course the closer you get to the promised delivery time, the points will go up. Ideally your auto dispatch system will send out alerts for jobs that haven’t been started and the delivery time is nearing, etc.
Common Pitfalls of Setting up an Auto Dispatch System:
Many dealerships have attempted to transition to an auto dispatch system, but may have failed. The most common pitfalls in making this transition involve:
The goal of maximizing profit conflicts with the goal of getting cars out on time. If you trust the system, you can have both.
Wanting to be fair to all technicians versus feeding certain jobs to the “better techs.” Knowing that a certain skill level is required for some jobs may help motivate techs to increase their knowledge and/or speed.
Not committing, i.e. if the dispatcher constantly overrides the system, games the points or allows too many special cases. A dispatcher has to embrace and trust the system to work, even if it means ironing out the kinks for a while
Not understanding that “care and feeding” of the system is necessary to its success. Like any technology, the information it produces is only as good as the data that’s entered.
Every service department is different in terms of layout, number of bays, techs and procedures. An auto dispatching system should be flexible and customizable to how you operate. It may be tough to make the transition, but the proven benefits include increasing shop efficiency and upsell opportunities, eliminating promise time guess work, more billable hours, improved CSI scores and higher gross.