There is an old saying that goes: “If you can’t measure it, you can’t manage it.” I’m continually searching for answers when I don’t know how to solve a particular problem or fulfill a customer’s requirement. Trying to apply theoretical knowledge to the practice seems to be an excellent alternative to try-fail cycles. I call putting theory into practice “moments of truth.” This offers me a good portion of insight into the problem-solving process of my work life. Today, I would like to share with you my latest “moments of truth.”

I came across one exciting guidebook related to the TOP Key Performance Indicators (KPI), which, according to the writer, can be easily applied in the automotive or dealership world. This was also my first impression, and I felt confident about that. I was determined to apply theoretical knowledge to the practice and integrate TOP KPI into DMS exercises. AND I hit a wall almost immediately.

The problematic part was an ambiguity of KPI terminology between the theory and practice (real life). To make a long story short, I prepared a table below to share with you particular situations:

What are the valuable insights from my exercise?

What most people call Efficiency is not a measure of the technicians’ ability to beat manufacturers’ book time (standard time). Because if technicians simply work faster, no more revenue will be generated, they simply complete their jobs more quickly. However, it will show an increase, but you will not produce any more profit. [L1]

Overall or Total Efficiency is a measurement of harmony between sold hours and working productively. This KPI is the gateway to significantly increasing bottom-line profitability. Thanks to that connection, I can link productivity and Efficiency. Thank you, Jeff Smith, for such excellent writing. It took me to the next level of understanding of the key levers of the business.

Frankly speaking, I recommend this book to everyone interested in increasing their KPI knowledge for dealers.

[L1] SMITH JEFF., The KPI Book, Insight Training & Development Limited in Stourbridge, England 2001

Dr. Juraj Hanus, hanus@taxapa.com

Data Analytics & Automotive Applications Expert for Dealerships