HOURS PER REPAIR ORDER

[philpinzok]

May sound like a dumb question but I have always calculated our hours per ro using our door rate? some people I have talked to including our 20 group people say to use your effective rate? who is correct? thanks for the help

[scotstrong]

With all due respect, it sounds like you are trying to compare two different calculations. Hours per repair order is simply that -- total number of hours sold divided by total number of repair orders.

First, the concept of "hours per repair order" always was of questionable value; and the method(s) for calculation vary depending on what "consultant" you are talking to -- if you do quicklube do you count those in the calculation or not; do you count internals or not; etc. etc.

To me, the only true value of a "hours per repair order" calculation should be to compare to "total hours available to sell".
In other words, use it to help measure stall utilization. When we start concentrating on trying to "increase" hours per repair order, we start getting into the possibility of "overselling"; or holding repair orders open if someone is coming back in a few days, etc. Does it really matter whether a ten-hour customer pay job was completed on one repair order or on two repair orders seven days apart? Your total hours and dollars sold is the same either way. Even most of the OEM manufacturers are starting to get away from this as any valid measurement.

Scot Strong

[robc]

I agree with Scot with maybe a confusion on my part of terms - but if you want to determine hours sold by your shop - effective labor rate divided by total sales.

== Rob ==

[philpinzok]

sorry for being so vague. i was always taught total sales divided by posted rate divided by number of ro's without quick lubes factored in. Our 20 group uses their effective labor rate which of course makes us look bad. Which is right?

thanks for any help

[parnotte]

I think you are getting to wrapped up in what way is right or wrong. I use certain formulas for tracking that other managers may not agree with. But, if you go by theory what you don't track you can't improve, it should not matter what way is right. Just keep doing it the way you've always done it and keep good track of it and try to improve your number.

There are far to many formulas to worry about. Stay with what you know and don't worry about how everyone else does it. Who cares if someone in your 20 group manipulates the numbers just so he looks good on the composite. If you increase your own number consistantly you'll be fine.



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[oldsfan]

I think your calculation is far to complex. Hours per RO is easily figured, I think
total hours divided by total ROs will give you the actual number.Is there something I'm missing?

[This message has been edited by oldsfan (edited 10-27-2006).]

[This message has been edited by oldsfan (edited 10-27-2006).]