Fleet Benchmarks to Measure Shop Productivity Performance
We all like to think that our fleet operations are productive, but how do you really know for sure? One way is to measure your shop’s performance metrics against industry benchmarks. However, because you really never know what variables others have in their benchmark data, your internal benchmarks in your fleet management system information is always the most useful method.
Benchmarks allow you to compare your data and information against industry standards (and yourself) to see how you are performing — and more importantly, improving. When measuring the productivity of your shop, some benchmarks you might want to use are:
Direct Labor
How much time are your technicians actually spending on jobs (wrenching time)? This is important to document so you can track your labor costs, and also note how much time is actually spent directly repairing vehicles. Conversely, tracking indirect labor spent on non-wrenching tasks is important because it can help determine if you are employing the correct skillsets. As an example, if you find the direct labor is relatively low for technicians, then this may indicate it is best to employ lesser skilled labor to complete these indirect tasks rather than a higher paid technician. A good industry benchmark for direct labor is between 65 and 75% for wrenching technicians.
Standard Repair Times (SRT)
How long are your work orders taking to close out versus the industry standard for how long a particular job should take to complete? Track your technicians’ completion times to see if your staff is taking longer than the average to finish repair jobs.
SRTs are used to gauge individual technician productivity compared to their peers and others in the industry. Each original equipment manufacturer (OEM) sets SRTs for all diagnostic time, component replacements, preventive (routine) maintenance and warranty repairs. Using SRTs allows management to determine how skilled each technician is relative to each asset’s mechanical systems. As an example, fleet shops expect an average technician to perform within 90-100% of the set SRTs. A high-performing employee may exceed 110%. SRT information can be critical to determining the type of training employees may need within the fleet operation. Moreover, management can make better staffing decisions, ensuring an adequate number of technicians are available in an ever-shrinking skilled labor pool. They can also use the information to configure hourly salary levels to a flat-rate schedule to pay for performance.
Established SRTs can also enable a fleet shop to work with an OEM to perform warranty repairs internally, saving both money and time to keep vehicles on the road.
Vehicle Equivalent Use
Introduced several decades ago by the U.S. Air Force, the Vehicle Equivalent Unit (VEU) is a measurement system that allows for the uniform estimation and comparison of maintenance and repair requirements and costs across fleets that are comprised of different classes of vehicles and equipment. Even to non-fleet personnel, it would seem logical that a passenger sedan requires less maintenance, repair, parts, and labor than a transit bus. A VEU — or synonymous Maintenance Repair Unit (MRU) or Maintenance Repair Factor (MRF) — are critical to understand how often your vehicles are used, and how the repairs, parts, outsourcing and labor relate to their overall costs.
The VEU process is used to assess an organization’s repair (internal and external) costs, parts, and labor expenses for reasonability by normalizing the costs across all vehicle types. By setting the base VEU value (e.g., Sedan = 1 and a Transit bus =4) and then stating the fleet assets in terms of total units (i.e., VEU, MRF, MRU), then assessments can easily be made to determine the organization’s resource requirements and costs. By configuring the fleet in relative terms of total VEUs it enables management to compare average costs between internal facilities or industry peers, ensuring they are competitive (e.g., industry benchmark = $1,800 -$2,000 cost per VEU).
Other benchmarks that can impact your overall productivity might surprise you – but they are also important to keeping your operation running.
Skills Assessment and Training
How many hours are you dedicating to training your technicians (e.g., industry benchmark = 40 hours)? Developing your techs’ skills can greatly impact your productivity, employee morale, and engagement. Making your staff more knowledgeable can increase their speed when completing jobs and reduce turnover.
Career Development Plans and Succession Planning
Retaining your staff and your current talent level is also important to keeping your shop productive. It’s important to be aware of your staff’s career plans and know when to expect departures – like retirements – to account for succession planning to avoid a drop in talent and reduce recruiting costs from natural attrition. Career development plans demonstrate that management is willing to invest time and effort in their staff which serves to motivate and retain quality talent.
Employee Retention and Morale
Just as it’s important to plan for retirements, it’s also essential to keep a pulse on all employees’ morale at your shop. If techs leave unexpectedly, it can cause your shop’s productivity to slow down. Keep tabs on how your happy and content your employees are at your operation. A periodic engagement survey can go a long way to ensure employee morale is always in the forefront. Management should strive for an industry benchmark of around a 90% employee satisfactory rating.