This week we focus on the always discussed hours per repair order (Hrs/RO), certainly another one of the numbers that is key to your operations.

Remember, as mentioned in each module thus far that although the Hrs/RO is very important, it has little value in and of itself until it is measured against other factors. Firstly, we must all understand which hours and which repair orders are involved, as surprisingly enough, not all Service Managers and/or Dealers calculate the same things.

Typically, the calculated number is customer pay hours per customer pay repair order, however some operations count all of the flat rate hours and all of the repair orders. Considering the fact that warranty hours are normally not 'sold' and internal hours, in fact how internal is even handled, are beyond the control of the service operation it is important to know and understand your work mix and even your warranty and internal Hrs/RO, however, we recommend you focus on Customer Pay Hrs/RO.

Often we are asked - "What should my Hrs/RO be? Is there an industry benchmark?"

Frankly these are more difficult to answer due to the fact that individual Dealers and Service Managers determine exclusively for their operation, what the numbers will be based on. As mentioned in a previous module, most service operations in North America pay 0.3 for an LOF, but I have seen it as high as 0.7, I've seen Transmission Flush's as low as 0.7 and as high as 2.0. Dependant upon your flat rates for various labor operations, the best way to determine where you should be is by having an Auto University consultant review your operation, your flow and your flat rates to determine what is possible in your facility.

That being said, your Hrs/RO number determines how well your Service Advisors and technicians do their jobs, but not in and of itself. Remember what goes into a days hours - maintenance work, repair work and although not used in this calculation, you still are performing warranty and internal work. This calculation almost moreso than any other, has little meaning until compared against other factors, specifically ELR.

If your Hrs/RO are at 2.3 and your ELR is very high, you can assume that you are performing a lot of repair work, however, if your ELR is very low, you can assume that you are performing a lot of maintenance. Although, these assumptions should not be taken as etched in stone, they give you a direction as to where to look for more information.

There needs to be a fine balance between Hrs/RO and ELR, presumably as your operation reaches its peak Hrs/RO you should see your ELR level off at a reasonably high, but not too high a number. The biggest indicator of potentially how well you are doing, as your Hrs/RO increase, this should be an indicator that your Advisors are 'selling' the recommended maintenance services at the time of write up, in turn the technicians are not left with the easy mileage interval services to recommend and therefore are forced to look deeper into the vehicles needs and ultimately find needed repair work.

For more information on maximizing your Advisors' abilities and of course to drive your Hrs/RO in the right direction, accounting for all of the other factors, click here.