Top KPIs to Manage Fixed Operations in a Car Dealership

Originally published March 6, 2024. Updated May 29, 2024
Alex Caradonna

Alex Caradonna

3 min read
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Your car dealership’s parts, service, and body shop operations are essential to the ongoing success and growth of your business, especially since 75% of new-car buyers return to the dealership where they purchased their vehicle for service.  

However, effectively managing your fixed operations requires more than reliable operating processes and a strong gut instinct.  

Dealers and Fixed Ops Managers must also keep a close eye on how this area of the business is performing on a daily basis, by tracking various key performance indicators (KPIs) that relate back to strategic goals and industry benchmarks.  

In this blog, we’ll outline some of the top KPIs for managing fixed operations in a car dealership and explain how a dedicated business intelligence (BI) solution can help your dealership monitor these and other KPIs in comprehensive, easy-to-use dashboards.

Download Now: Guide - Top KPIs for Automotive Dealerships

 

#1 Service Order Efficiency  

Hours Clocked vs. Hours Invoiced

Efficiency is critical in the fixed operations department, especially when it comes to fulfilling customers' service orders. Service Order Efficiency is calculated by dividing the total time clocked on service orders by the actual time billed by your staff. Invoicing is split over external, warranty, and internal invoicing, and clocking can be assigned pro-rata when multiple technicians work together on the same order. 

You should generate and review these numbers daily to track billable utilization across the team. While these numbers are extremely valuable in the short term, they also allow managers to analyze trends in staff efficiency over time so they can make informed decisions about staffing, process improvements, and performance improvement plans for individual employees. 

 

#2 Invoicing Delays


Open Repair Orders refer to in-progress orders pending payment or orders for which the service is complete, but the invoice has not been created yet. Perhaps work has not been completed yet because you’re waiting for a part to come in or a specific technician to become available. 
 

In cases where the work has already been completed, open repair orders are typically the result of an overload of your receptionists, a pending warranty, or an insurance claim. In all these cases, order closing delays result in significant invoicing delays that create critical cash flow and revenue concerns for your dealership. 

While a certain number of open orders are inevitable, it’s still critical to keep track of invoicing delays and look to minimize the number of pending orders in your fixed operations department. Financial dashboard Illustration

#3 Technician Productivity

Hours Available / Hours Billed

As mentioned above, service order efficiency is a key driver of a success, but are your techs also maximizing their productivity? Technician Productivity measures how well each tech’s jobs stack together in an eight-hour day to make eight hours of labor sales or more. Monitoring productivity on a daily basis will allow you to identify areas where techs may be losing precious time. 

If you see low productivity levels, evaluate your processes and facilities to identify improvement opportunities. Do you need to remove non-billable tasks that have fallen on technicians’ laps? Are techs consistently stuck waiting for parts to come in? Do they need to set up their workspace to be more efficient? Increasing productivity on a tech-by-tech basis will help you increase overall billable hours across your service department.  Time and productivity management illustration

#4 Total Direct Internal Costs 


Your dealership should monitor all internal costs associated with the fixed operations department, including warranties on used vehicles you sold, repeat repairs, lost billable hours from incorrect work, theft, and any other expenses related to service orders.
 

These costs directly impact your bottom line, but they also speak to the overall efficiency and accuracy of your service techs. The best way to regulate and reduce internal fixed ops costs is to monitor them closely on a daily basis and tie each expense back to its source. You can use the results of these reports to identify cost-saving opportunities related to service completion, ongoing maintenance and repairs on customer vehicles, and warranty creation for the cars you have available for purchase. 

 

Take Control of Your Operations With Data-Driven Insights  

A BI and reporting solution can help you take control of daily operations by monitoring and managing critical KPIs, forecasting trends, and digging deeper into company data.  

These solutions combine data from your dealer management system, payroll system, customer database, and more into comprehensive, up-to-date dashboards that anyone – from dealer principals to service techs – can use to inform their business decisions.  

If you’re interested in learning more about the best KPIs for car dealerships and how to manage them using BI, download our guide, “Creating a Data-Driven Automotive Dealership” to see how data can transform your dealership operations.

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Originally published March 6, 2024. Updated May 29, 2024

Alex Caradonna Written by
Alex Caradonna

Alex grew up in the auto industry and has over a decade of experience consulting on digital strategy and driving conversations with automotive decision-makers. He loves solving complex challenges and using data to find the best solutions for both internal and external stakeholders.