As I’ve written previously, the two most important elements of effective Accountability Management are 1) measuring what you need to manage and 2) inspecting what you expect. In the Service Department, the repair order analysis process is one of the essential steps in executing these two accountability elements.

The R.O. analysis is intended to provide information about Customer-Paid (C-P) sales that is supplemental to that available in the typical DMS. The proactive Service Manager who practices the R.O. analysis discipline normally focuses on the following key performance indicators (KPIs):

• The mix of business (in flat rate hours) between the three primary C-P labor categories (maintenance, competitive repair, and non-competitive repair)

• The effective labor rate for each of three primary C-P labor categories

• The parts-to-labor ratio in each of the three primary C-P labor categories

• Highest frequency labor operations in each primary C-P labor category

• Lost C-P sales possibilities, determined by:

  • Number of One-Line R.O.s

  • Percent of R.O.s over 30,000 miles

  • Potential Menu opportunities and closing rates

  • Additional service requests (ASRs) by technicians and closing rates

If the Service Manager is performing this analysis manually, he will usually also look at the R.O. “write-up quality” (completeness and descriptiveness) and check to determine if an active delivery was performed by the Service Advisor. The results of the analysis are then reviewed with each Service Advisor in a one-on-one meeting.

We’re often asked, “How many and how often?” If the analysis is being performed manually, we suggest the Service Manager or Service Sales Manager review 20 sequential C-P R.O.s per Service Advisor every two weeks. If the analysis is being done utilizing one of the available 3^rd party electronic tools, we still recommend a bi-weekly review cycle, but 100% of the advisors’ C-P R.O.s should be included in the analysis.

The manual R.O. analysis is not a painless process for departmental management, but when effectively executed on a regular basis, it will generate significant improvements to your transactional quality. The electronic analysis tools, though painless for the Service Manager, are not cost-free to the dealership.    

Implementing a disciplined R.O. Analysis process is one of the subjects taught in the Principles of Service Management II class at the NCM Institute Center for Automotive Retail Excellence.

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