CollisionWeek Research - Key Performance Indicators: Job Costing

Monday, October 29, 2001

Key Performance Indicators: Job Costing 2001
© 2001 by CollisionWeek. All rights reserved. No part of this publication may be reproduced or transmitted by any means without permission in writing from the publisher.
The latest CollisionWeek research project, asked repairers to detail their usage of Key Performance Indicators in their business and the actual measurements they produce. Just under 200 shops responded to our survey.

The associated table details the results of our survey. As this table indicates, the respondents tended to be large repair facilities. The average respondent reported 2000 sales volume of just over $2 million. Looking at breakouts of the respondents, fully 35 percent reported sales over $2 million. The largest group, at 43 percent, reported sales from $1-1.99 million. Shops reporting under $1 million in sales represented 22 percent of our total respondent base.

When asked if they job cost every repair order, 72.4 percent of shops reported they did- up from 68.9 percent last year. Another 19 percent reported job costing some of their repair orders. Just 8.6 percent of respondents reported that they do not job cost at all.

Looking at the dollar volume breakdowns, shops reporting over $2 million in sales showed the highest percentage of respondent job costing all of the time at 85 percent. This is a change from last year's survey that showed shops in the $1-1.99 million category leading the pack at 76.2 percent. Another 5 percent of shops with over $2 million in sales reported job costing some of the time.

Shop reporting under $1 million in sales reported job costing all the time just 66.7 percent of the time- a dramatic increase from the 37.5 percent of repairers under in the category reporting job costing all of their ROs. An equal amount, 16.7 percent of repairers reported costing some or none of the time.

Key Performance Indicators

Again, we asked respondents to provide us with their actual performance statistics for common key performance indicators (KPI). The associated table details the average reported KPI stats for our respondents overall and a Top-25 percent breakdown as we did last year. The Top 25 percent indicators represent an average of the responses from the top quarter reported performance in each category. The Top 25 percent KPIs should be used as a measure of achievable results as they represent the high-end of performance levels recorded by the best performers in each category.

In addition, due to subscriber requests, we've included breakdowns for each KPI statistic by reported sales. These breakout statistics show some interesting trends. For example, the over $2 million sales repairers showed significantly higher labor productivity at 142.38 percent versus the 116.8 percent recorded by those facilities under $1 million. This leads us to conclude that the benefits of size are apparent due to investments in training, tools, equipment and improved scheduling systems for the larger repair shops.

But, dropping down to the static gross profit margin on labor sales overall reported by these same repair facilities we see the under $1 million category leading the way at 65 percent GPM versus 57.34 percent for those shops over $2 million. Apparently, larger facilities have a higher labor pay cost structure than their smaller competitors.

Also note that this year we asked repairers to indicate whether their labor gross profit margins were based off of loaded or unloaded labor cost figures. Many subscribers thought the "high" number must be the result of not including the cost of employee benefits or taxes into the cost structure used to determine the GPM statistics- a logical conclusion, but one that this year's research does not prove true.

The table details GPM on labor sales for loaded, unloaded and overall. As you can see from the data, the overall performance for those who indicated an unloaded statistic was less than one-half percent better than those who load their statistic with the cost of benefits and taxes. Apparently, all repair facilities are attempting to manage their GPM performance to a similar number.

Customer Satisfaction and Estimate Closing Ratios

Just over 80 percent of repair facilities reported measuring customer satisfaction using an in-house system or third party providers. Third-party measurement services show a 51.7 percent usage among respondents.

The number of repairers who reported tracking their estimate closing ratios increased this year to 50.88 percent of respondents from 42.2 percent last year. Overall, those respondents average a 65.89 percent closing ratio. The Top 25 percent performers scored about 20 points higher at 85.29 percent.

Open and view the associated table window.

View last year's chart of results

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