24.

November 2016

Brown’s Toyota and Scion of Glen Burnie

7167 Ritchie Highway
Glen Burnie, MD 21061

Dear Mr. Brown,

The following report is in response to your request for research into the improvement of
auto shop efficiency, as outlined in the memo that you approved earlier this month. The report
covers the current state of workflow in the shop, analyzes weaknesses in the workflow, and
offers solutions to improve overall efficiency.

Thank you for taking the time to read the report and consider its suggestions. The team
is looking forward to the coming improvements and appreciate that their contributions may be
making an impact on improving our business.

Thanks,

Hans Ostendorp, MDT

Integration of Analytics in Work Scheduling

Submitted to Mr. Brown

Owner and Service Director
Brown’s Toyota

By Hans Ostendorp
Master Technician

4. December 2018
 Table of Contents

Executive Summary…​4
Introduction…​5
Background…​5
Purpose...​5
Overview of Methodology…​6
Results…​7
Perception vs. Reality…​7
How Others Do It…​9
POS Systems…​9
Menus…​10
Meals, Ready to Eat…​10
Potential Applications…​10
Recommendations for Implementation…​11
References…​13
Appendix A: Survey Results…​16
Appendix B: Sample Timecards...​18
 Executive Summary

As the automotive repair business becomes increasingly competitive, the greatest edge
a shop can attain is to understand the needs of its customers. Unfortunately, for too long, our
understanding of customers’ needs has been informed by their words and not their responses to
our actions. While customers insist that they want convenient, while-you-wait service without an
appointment, an observation of their actions would suggest that they value time above all else,
and too often in a business as complex as automotive repair, these two desires are
incompatible.

Our inefficient workflow has severely damaged our reputation with customers. By
responding to their demands for while-you-wait service without an appointment without fully
understanding the abilities of the staff and the challenges in each individual job, we have
created a situation where:

- We are unable to deliver on the services we claim to provide, and,

- We are ignoring the ability of data analytics in order to direct workflow, instead spreading
jobs among staff that may be less than optimal.

This report analyzes the weak points of our workflow and considers the actual desires of
customers and abilities of technicians. In order to work within the constraints created by a
limited supply of skilled workers and a customer base that demands above else that promises
be kept, we suggest:

- The leveraging of data analytics in scheduling,

- The limiting of while-you-wait jobs, and scheduling them in accordance with the data
analysis of how long they take, and,
- The analysis of abilities and assignment of work to the appropriate technician in order to
ensure proper completion.
 Introduction

Background

The past several years have seen a dramatic contraction of business at our shop: skilled
staff has been reduced by half, revenues have dropped off similarly, and customer satisfaction
has sunk to the lowest in the region, as measured by manufacturer surveys. The continuation of
the policies that have brought us to this point threaten the continued operation of business itself.
As business contracts, skilled and commissioned technicians find it harder to make money and
eventually leave for a busier shop, further reducing the work capacity of the shop. This, in turn,
increases wait times, decreases customer satisfaction, and leads to a further contraction of
business. As the situation spirals downward, it becomes increasingly difficult to replace skilled
workers, and as the overall skill level of the shop declines, the capacity for the high-margin work
that only skilled technicians can perform drops, marking an even sharper revenue decline.

The traditional approach to scheduling, where service advisors schedule work based on
their ability to sell it, has clearly failed here. While in years past, this was the most effective
method of getting the best work in the door, the dynamics of the service business have
changed. No longer is it common, even in complex diagnostic jobs, to simply schedule work with
an advisor and allow the technician to do the work when they are able. Customers expect to
make an appointment for their vehicle to be repaired, rather than make an appointment to talk
with a service advisor. This change in customer attitudes has clearly been noted in their
satisfaction surveys, as well as the overwhelming tendency for customers to wait for their work
at the shop. In order to sell work when manpower to complete it is limited, service writers are
forced to make promises to bring the customers in, but are unable to keep when even the
slightest difficulty or conflict arises in the workflow.

Purpose

The purpose of this study was to determine where the bottlenecks are in the workflow,
and how to leverage the vast amounts of data created every day to ease those bottlenecks. To
this end, multiple studies were conducted: the speed and skill level of technicians in the shop,
the most common work performed in our shop, and comparisons to how other businesses, such
as restaurants, deal with a workflow that can be unpredictable, on-demand, and involving
time-sensitive customers.
 Overview of Methodology

In order to analyze bottlenecks in the workflow, primary research was conducted in the
shop:
- A survey was distributed to the technicians regarding how often they complete certain
jobs, to gauge perception of workflow (necessary in order to set accurate promise times
for work completion)
- Another survey was distributed to the technicians regarding how quickly they can
complete certain jobs, to gauge their perception of their ability (also necessary when
setting promise times).
- A study was completed on-site, observing directly how long it took for technicians of
various skill levels to complete common jobs.

Additionally, secondary research was conducted for comparative purposes. This

research will allow us to put the primary research into proper context:

- Research was conducted into industry-wide trends of the type of work is being done at
different types of shops (dealership, aftermarket, quick-service).
- Research was also conducted into the processes of other businesses operating under
similar constraints.
 Perception vs. Reality

The first key to leveraging data produced during a workday towards a more efficient
process is knowing what to track. While shops deal in a wide variety of problems (mechanical,
electrical, chemical, body), the most frequent jobs are easily identified (Bender, 2018), not just
through industry trends, but observation at work. According to the article ​Oil Changes Top the
List of Most Common Vehicle Repairs (​ 2018), oil changes, wiper replacements, air filters, tire
replacements and rotations, batteries, brakes, and alignments are the most commonly
performed maintenance items/repairs. Directly observing our shop, these were found mostly to
be true, and being a dealership, items such as check engine light diagnostics and noise
concerns were also very common. As the shop is filled with mechanics of various skill levels, it
is important to focus on the kind of work that they all can do as a starting point for streamlining
the scheduling system.

Our original research has suggested several disconnects between perceptions of

ability/speed, and the corresponding realities. The following data collected from technicians in
our shop, all of an A or B level show the technicians to believe that regular maintenance items
often take less than 30 minutes to prepare an estimate, and less than an hour to complete
common repair jobs:

Observed times differ considerably, not just from the perceived times, but also from the
flat rate repair manual times, on which the older scheduling systems were based. For example,
the average technician estimated the time to perform an oil change and write up recommended
repairs for a vehicle was about fifteen minutes, whereas the observed time averaged out to
around half an hour. The flat rate guide, by contrast, which is Toyota’s recommended labor time
list, shows an oil change at two-tenths (.2) of an hour, or twelve minutes (Toyota, 2018). By
contrast, the average technician considered a brake job to be around 45 minutes, observed time
averaged out to 75 minutes, and the flat-rate time listed in the repair manual was 2.4 hours, or
144 minutes (Warranty time guide, 2018). Obviously, basing a scheduling system on flat rate
times or technicians’ estimations (and by extension, service advisor estimation, since they are
generally taking their times from the technicians) leads to considerable bottlenecks (and long
wait times), and dead space in others:
 For basic maintenance, an additional 9.5 man hours are required each day if the
technicians are to complete the normal amount of work, if time expectations are based on the
expected completion times in the flat rate manual. Even if the scheduling department works off
the technician recommendations, the respondents will undershoot actual required times by
almost three hours.

Conversely, higher-margin jobs tend to come in below estimates set both by technicians
and the flat rate manual, leading to hours worth of dead time:
 The problem here lies in that generally these higher-margin jobs are ​upsold,​ which is to
say, customers don’t generally come to the shop looking for this kind of work; it is noted during
inspection and sold to them (LaReau, 2014). Given that the schedulers cannot predict how
much of this work will be purchased, they are compelled to schedule customers as if it will not
be, which leads to potential bottlenecks if we are already behind by three man hours per day;
Working these jobs in becomes extremely problematic. As delays in routine maintenance pile
up, it becomes harder to sell higher-margin work, as customers prefer not to deal with
unexpected delays.

A data-driven approach seeks to remedy this by observing tendencies of individuals. As

author Michael Lewis pointed out in his book ​Moneyball, “​ People… operate with beliefs and
biases. To the extent that you can eliminate both and replace them with data, you gain a clear
advantage.” (Lewis, 2003).

How Others Do It

A comparison is worth noting here: restaurants. A restaurant has certain similar

functions: take reservations and walk-in customers (arrivals planned and unplanned), and get
everyone seated and served in a reasonable amount of time, with varying orders. In both cases,
they “must retain efficient operations to achieve customer satisfaction and retain their
customers.” (Barlan-Espino, 2017).

POS Systems. ​An effective POS (Point of Sale) system is a good starting point. When a
customer arrives at a restaurant, their order is taken and delivered to the kitchen for preparation.
Modern restaurants leverage technology in their POS systems, many operating with fully
integrated ticket creation (by the server), ticket display (in the kitchen), and ticket completion (a
queue that allows cooks to note the status of tickets and expected wait times) systems (Morton,
1995). By making this information immediate and on-demand, all staff members are on the
same page about wait times, order of completion, and other critical information. Similarly, as
customers arrive, this system allows greeters to provide them with realistic wait times. By
contrast, our older system of paper ticket printing and distribution lacks any centralized
command or integration: analogous to servers simply shouting orders into a kitchen.
 Menus. ​Restaurants, however, start with a distinct advantage: a limited menu. Where
our current scheduling system allows any customer to schedule any work for any time (even
allowing customers to schedule their own appointments online, without regard to the congestion
in the shop), a restaurant directs people to only certain work - i.e., items on a menu, which, as
Ozdemir points out: “Specifically, menu is an ​instructor​ that clearly dictates (i) what ​will​ be
produced, (ii) what type of ​equipment​ and ingredients are needed, and (iii) which ​qualifications
employees​ should have.” (Ozdemir, 2014). In our case, scheduling is done without regard to
these factors, and as such, delays occur just as they would in a restaurant if customers could
order items that weren’t on the menu (with the expectation that their orders would be filled). This
theme will be revisited, but bears mentioning here. The important thing to note is that a
customer that is allowed to order anything in the world is certain to be disappointed, whereas a
customer with limited but prepared choices will much more likely be satisfied.

Meals, read to eat. ​Quick-service restaurants take the limited menu concept a step
further, with food fully prepared before the first customer even arrives. With effective market
research, a quick service restaurant can design a menu specific to the local area, even with
international branding (Miller, 2004). A quick-service restaurant serves a different function than
a typical restaurant, and should be treated differently, just as a speed-based no appointment
service like Jiffy Lube, which specializes only in services that can be done in under thirty
minutes (Jiffy Lube, 2018) should be treated differently from a full-service shop or dealership.

Potential Applications

Restaurant POS systems may provide a model for efficient communication in the shop.
The volume of information, however, is much more dense than in a restaurant, and the risk of
miscommunication is very high when pressure is on and customers aren’t entirely sure what
they are talking about (McCuistan, 2008). While paper repair orders remain a legal necessity,
there would be plenty of options for the integration of a unified display system that would allow
service writers and technicians to see what jobs are coming, which ones need to be done, which
ones have been waiting for a long time, and so on. This would additionally aid the off-site call
center in understanding the flow of work in a given day, allowing them to schedule work for slow
periods (LaReau, 2014). Similarly, if a walk-in customer arrives, the service advisor would know
immediately if there is a technician available within the next five minutes to handle their work,
allowing our shop to preserve the walk-in convenience that customers prefer without the
hour-plus wait times that have become typical with our limited staff.

Selective limitation of customer choice would allow for more targeted focus on certain
jobs. Choice is useless if the expectations can’t be met. This is where the concept of a menu
comes in, where work is separated into categories analogous to a restaurant or catering: a
customer could presumably schedule same-day appointments for work that any tech is capable
of performing, and for which a reasonable time estimate can be given, or schedule a more
complex repair with a specific tech, which would require a visit and estimate before repairs could
be completed. By sorting work into these categories, the call center could more effectively
schedule work, knowing the number of technicians on hand, and their capabilities (Bartnik,
2003). With the more effective communication provided by the integrated repair order system,
scheduling the right work for the right tech becomes possible, and much more manageable than
the current system, where service advisors compete with each other to fill up each technician’s
schedule, regardless of whether they are properly qualified for the work or not, and regardless if
there is work held over from a previous day. Rather than focusing on volume, the quality of work
can be improved, leading to increased customer satisfaction, higher margins, and more
productive technicians (Anderson, 2014).

The Toyota TXM program has proven to be successful in using low-priced entry-level
labor to handle the most basic maintenance work, which research has shown to be the most
common work any shop will handle (​“Oil changes…”,​ 2018). Similar to ready-to-eat quick
service meals, recognition of oil changes and tire rotations as a distinct subclass of incoming
work is necessary, as well as the arrangement of a different set of rules to handle them. Since
our research has shown that a single tech is unlikely to complete the work in under half an hour,
the use of teams to complete this work, regardless of vehicle mileage, could be the a key to
regaining customer trust. By increasing the level of training and incentives for maintenance-level
techs to identify possible repairs to sell, as well as an assurance that the customer won’t be
stuck at the shop waiting for maintenance work to be done, service advisors can work with
customers to plan ahead and schedule necessary work at a more convenient time, and ensure
at that point that all the necessary parts are on hand and the technician is free to complete the
work without interruption (Bartnik, 2003).

Lastly, the studies undertaken to provide the basis for this report should be permitted to
continue, in order to ascertain with increasing accuracy the abilities of each technician in
different jobs. With the computing power to determine about how long to reasonably expect any
tech to complete any job, it is reasonable to expect that work scheduling for each individual
technician will become more accurate with their ability and reduce both downtime and
overload-related delays. Harnessing this information, our shop can advance to a data-driven
platform, rather than relying on the intuition of service advisors who operate with a different set
of personal incentives than the technicians and the shop as a whole.

Recommendations for Implementation

While there are many ways to approach the implementation of the above presentation,
any action needs to be accompanied by total commitment and discipline among the service
advisors, and management’s willingness to enforce this. Without this being applied to every
recommendation automatically, the system will break down as the service writers chase the
incentive to overbook work in order to earn a greater commission. With the right technicians
receiving the right work at the right time, the customer experiences less friction throughout, as
their expectations can be set reasonably and met consistently.

The classification of techs by skill level will allow the service advisors to schedule work
using the availability of skills in the shop, rather than by their own ability to sell work. Their ability
to sell work will be enhanced with the certainty that can come with knowing when the work will
be completed.

The limitation of while-you-wait services based on a menu system, similar to a

restaurant, will allow service advisors to schedule work and have a good idea of how long it will
take. Working with this limited menu, customers will be presented with a set of reasonable
expectations, rather than allowing them to inaccurately set their expectations without any actual
automotive repair experience. Choosing from this set of reasonable expectations, we have a
much greater chance of meeting them.

The use of ticket display systems, such as those used in restaurants, both in the service
lane and in the shop will allow service advisors, technicians, and customers to get an idea of
potential wait times, as well as allowing technicians to declare themselves available for work
and service advisors to take on walk-in customers immediately. Without the guesswork that
giving promise times currently requires, customers can plan their day around whether or not
they can wait for their car to be finished, or if they need to leave it, or make an appointment for
another time. Customers can come in at their own convenience and have a reasonable
expectation that their service will take less than thirty minutes for routine maintenance.
 References

Anderson, M. (2014). Flatten the “X” in Your Schedule. ​Auto Body Repair Network​, ​53(​ 6), 66.
Retrieved from
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com.ezproxy.umuc.edu/login.
aspx?direct=true&db=bth&AN=97722141&site=eds-live&scope=site

Barlan-Espino, A. (2017). Operational Efficiency And Customer Satisfaction of Restaurants:

Basis For Business Operation Enhancement. ​Asia Pacific Journal of Multidisciplinary
Research, Vol 5, Iss 1, Pp 122-132 (2017)​, (1), 122. Retrieved from
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com.ezproxy.umuc.edu/login.
aspx?direct=true&db=edsdoj&AN=edsdoj.ba587cb5780947a98cc89d26351fc180&site=e
ds-live&scope=site

Bartnik, S. (2003). The Art of Scheduling: A Starting Point. ​Automotive Body Repair News​,
42​(4), 32. Retrieved from
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com.ezproxy.umuc.edu/login.
aspx?direct=true&db=bth&AN=9432635&site=eds-live&scope=site

​ etrieved from
Bender, B. (2018). The 10 most common car repairs. ​Independent Motors. R
https://independentmotors.net/10-common-car-repairs/​ (Repair items)

Gang Du, Xinyue Li, Hui Hu, & Xiaoling Ouyang. (2018). Optimizing Daily Service Scheduling
for Medical Diagnostic Equipment Considering Patient Satisfaction and Hospital
Revenue. ​Sustainability, Vol 10, Iss 9, p 3349 (2018),​ (9), 3349.
https://doi-org.ezproxy.umuc.edu/10.3390/su10093349

Gentry, C. R. (2005). The Workforce Juggling Act. ​Chain Store Age,​ 23A. Retrieved from
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com.ezproxy.umuc.edu/login.
aspx?direct=true&db=f5h&AN=18448070&site=eds-live&scope=site

Jiffy lube history and mission. (2018). Retrieved from​ https://www.jiffylube.com/about/history​.

LaReau, J. (2014). Call center keeps the service bays packed. ​Automotive News,​ ​88​(6632), 56.
Retrieved from
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com.ezproxy.umuc.edu/login.
aspx?direct=true&db=f5h&AN=97359789&site=eds-live&scope=site

​ ew York: W.W. Norton.

Lewis, M. (2003). ​Moneyball: the art of winning an unfair game. N

Liang, W. K., Balcioglu, B., & Svaluto, R. (2013). Scheduling policies for a repair shop problem.
Annals of Operations Research,​ ​211​(1), 273–288.
https://doi-org.ezproxy.umuc.edu/10.1007/s10479-013-1412-6

Marinucci, D. (2004). Focus on profits, not hourly rates. ​Tire Business,​ ​22(​ 7), 7. Retrieved from
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com.ezproxy.umuc.edu/login.
aspx?direct=true&db=bth&AN=13792966&site=eds-live&scope=site

McCuistian, R. (2008). Information Disconnect. ​Motor Age,​ ​127​(1), 12. Retrieved from
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com.ezproxy.umuc.edu/login.
aspx?direct=true&db=f5h&AN=28603120&site=eds-live&scope=site

Miller, P. W. (2004). Quick Service Hits China. ​China Business Review​, ​31​(4), 18–28. Retrieved
from
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com.ezproxy.umuc.edu/login.
aspx?direct=true&db=mth&AN=14297624&site=eds-live&scope=site

Morton, A. (1995). Growing a POS system. ​Restaurant Business,​ ​94(​ 7), 152. Retrieved from
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com.ezproxy.umuc.edu/login.
aspx?direct=true​&db=bth&AN=9505101369&site=eds-live&scope=site

Oil changes top list of most common vehicle repairs (2018). ​Automotive Service Professional.​
Retrieved from
https://www.autoserviceprofessional.com/article/100541/oil-changes-top-list-of-most-com
mon-vehicle-repairs​ (Maint. items)
Ozdemir, B., & Caliskan, O. (2014). Review Article: A review of literature on restaurant menus:
Specifying the managerial issues. ​International Journal of Gastronomy and Food
Science,​ ​2​, 3–13. https://doi-org.ezproxy.umuc.edu/10.1016/j.ijgfs.2013.12.001

​ 18 flat rate guide. ​Plano, TX: Toyota Motor Corporation

Toyota Motor North America. (2018) ​20

Warranty time guide​ [Website]. (2018). Retrieved from http://wtg.fixed-ops.com/

Appendix A: Survey Responses Used In Study
Appendix B: Sample Time Cards