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The $500,000 Scavenger Hunt  

 

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by | Mar 9, 2019

Rarely does the waste in an operation happen when the technician has hands on tools. And it doesn’t matter what kind of technical work you’re doing. It is true when the teacher is teaching, the surgeon is performing surgery, the chef is cooking, and so on.

This is a great example of a client we helped add $500,000 to their bottom line through one simple improvement.

As we walked around the car dealership, everyone was moving. The service centre was busy with routine maintenance and a whole host of anxious customers with car problems. There was not a single person slacking off. Everyone was busy – or so it appeared.  Yet, behind the scenes, the place was barely able to keep the doors open and pay its employees.

The owner was at a complete loss. He had hard working people, doing a good job on the vehicles, with the majority of customers driving away happy (or at least satisfied) with the final result.  Despite this, he had virtually nothing left over at the end of each month in which to feed his own family.  Every previous attempt at business improvement had failed.

As we listened to the frustrations of the owner and the mechanics, we empathized. On a typical job, the mechanic would:

  • Jump in the vehicle
  • Drive it out of the bay, and park it in the closest spot
  • Return the keys to the front desk and pick up their next assignment
  • Hunt for the next vehicle (those beeping lock sounds are helpful)
  • Drive the vehicle in and hoist it up
  • Assess the vehicle
  • Walk to the parts manager and get the parts
  • Walk back to the vehicle
  • Start the job

The mechanics were spending more than 70% of their day looking for parked cars, chasing paperwork, and collecting parts – just so they could start each job.  

The truth is that every minute the mechanic was not working on a vehicle was a lose-lose-lose for the business.

  1. The customer was delayed, as fewer vehicles were returned to owners in time.
  2. Profitability was impacted – whether you’re paying the mechanic to fix vehicles or find them in the parking lot – the hourly rate is still the same.
  3. The mechanics were frustrated, because they were not doing what they love – solving problems and fixing vehicles.

As is the case in many businesses, there were any number of improvements that could have been made. After spending time with the people doing the work, we were able to help the owner choose the one improvement that would bring the greatest value.

In this case, it was the amount of time the mechanics were doing work other than fixing vehicles. With that focus, the team decided to change the way the cars were parked. They hired two runners to make sure the cars were in the bay, with the required parts ready and waiting for the mechanic.

What before had seemed an unfathomable expense in hiring two runners, became a no-brainer when we looked at the number of vehicles we could service per day.

In too many organizations, good people are stymied by organizational habits that don’t allow them to do their best work. In this case, the simple habit change was worth $500,000 to the bottom line.  

How much is the scavenger hunt costing your business?

 

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