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DECEMBER/JANUARY 2020 AFTERMARKET 17 www.aftermarketonline.net the labour is just covering the overheads. That means Matt is not making a sufficient profit on his labour. The only reason he is existing at the moment is because of the parts margin." Booking In tandem with the new pricing structure, Andy asked Matt and the team to consider how they run the back office: "We have prepared the groundwork for getting them away from their manual diary, as this is old hat now." He passed us the big, heavy book: "This should be on The Antiques Roadshow! “We have ordered Kanban Board, which I designed for other garages. This is a visual management board, working with days and colours, which will be instantly recognisable in terms of what we are doing from one hour to the next. Hopefully this will mean they will be able to use the DMS system much more effectively as well." Lushington Motors' DMS is Autowork Online – through Euro Car Parts. "It is a very good system," commented Andy, "but they are not using it effectively. they are using just 20-25% of it. Some of it is down to Matt. That said, the local branch of ECP don't understand it that well either, so he needs a bit of guidance. We've done a bit of that, and we'll be doing a bit more." Moving from labour to parts and consumables, Andy said: "I see lubricants as an opportunity to earn a little bit more margin. For example, they are selling Shell Helix at £8.95 a litre. At their local petrol station, it is £14.50. I know that in the petrol station it is a distressed sale, but if we sell it at £11.95 do you think anyone is going to bat an eyelid? No. You should use the petrol station as the benchmark." If you use the petrol station as the benchmark, we observed, you will make money from most things. "That is the key,” Andy agreed. “For example, they are selling antifreeze for £2.99. In the petrol station it is £9 a litre. I'm not saying charge £9, but you can charge £4 or £5. This will help Matt retain a bit more of the money he takes, but also have a bit more money to invest in training and equipment. Otherwise you can't survive." How you buy is also important: “We are also going to put some additional nominal codes on, to separate fluids from parts, and parts from equipment. When they are buying their parts from ECP throughout the month, they are buying equipment. This is distorting their true parts spend. They are also losing the tax return they get on equipment investment. You have to separate them, so I rang up ECP this morning and told them they need to open another account for Lushington Motors, and call it the tools account. Then I opened another account, and called it the lubrication account." Then there is presentation: "On the job sheets, we are going to have more fulsome job descriptions, and we are going to have a better explanation and put labour lines down, so that we make a story of an invoice. The key is to make a story, to make it more valuable." Workshop Now onto the workshop. Again, Andy had already been in before we arrived. "I've had a little team talk with the techs this morning, a hard- hitting chat." "Oh really? we replied. "Have they started crying yet?" Andy and Matt laughed. "I came back in,” Andy observed, “and Matt asked me 'are they still here?'" Matt and Andy showed us around, and Andy pointed out areas for improvement; innumerate nearly- empty oil bottles filling a corner, empty wiper racks, under-used tyre machines, a hospital-job Triumph Stag engine rebuild, and much more. "Spend a weekend, get a skip, have a clear-out.They are here from 7am to 7pm, running around, but all this physical stuff is in the way. How can you be effective in this environment? Time is money for us, as is labour. Every minute counts. In a limited space, are they making it worse for themselves? Yes." Andy continued: "In my view, all parts should be controlled from reception. I don't want techs wandering around looking for parts. When you give a job card and a key to a technician, you should be handing him not only the tools and all the information he needs in terms of technical data, plus any special tools he may need to do that job. "The most valuable people in this business are the techs. They are the only ones who actually sell. They are the value creators. If they are not selling hours, we are not going to increase our revenue. The most important people are in reception. It is about having the harmony between both." Actions And that's it, more or less. If we put in all of Andy's observations, we could have written an article twice as long, but this is enough to give you an idea. Summing up, Andy said: "It is not easy for someone in the motor trade to seek help from someone else. In this business, everyone is a know-it-all. This is a great, great little business. It has the foundations to be exceptional. That is what we are going to try and do." Andy Simpson observed: "Andy Savva wants to help you. It is rare in the motor trade. He is making money, obviously, but that is not why he is doing it. He is doing this because he is passionate about it. " Matt said: "Give it a week to then let it sink in, and then we will sit down with a battle plan and make some positive changes. I can see it being totally different, for the better. I know we have got a good business here; it is having someone like Andy come in to say 'this is how we make it even better'." When Andy comes back, Aftermarket will come too. See you then.