The increased technology density found in vehicles today (more ECU's, high voltage charging systems, electric powertrain, in-vehicle Infotainment (IVI), etc.) can negatively impact service efficacy, and will likely continue to impact service of vehicles going forward. This was the topic of my presentation at SAE World Congress 2013 last week in Detroit. For each data slide I presented, I invited our panel of subject matter experts to comment on the challenge, and what needs to be done to overcome these difficulties.
Our panelists included the best and brightest that lead service initiatives from Ford Motor Company, General Motors, Toyota Motor Sales, The National Institute for Automotive Service Excellence (ASE), and Madison Area Technical College. These experts, many of them also members of the Society of Automotive Engineers'(SAE) Service Technology Program Committee (STPC), have not only been involved in discussions of this study data before, but also helped design and field the study. Incidentally, IDC Manufacturing Insights has already published three dedicated research pieces from this data-rich study with over 2000 global participants: The Impact of Vehicle Electrification on Service Technician Safety, Service Information Criticality in Combating Increasing Vehicle Service Complexity, and Service Readiness as a Key Business Practice.
However, interestingly, a piece of research that had an overwhelming response at the conference is one that I have not previously written about: the frequency with which technicians perform uncompensated research for a service event.
Our data shows that over 60% of service technicians from both dealerships and independent repair facilities must frequently search for and research information in order to perform certain services, and are not compensated for this research (See Figure below.) In other words, the flat rate pay system prevalent in the automotive industry does not reward technicians for performing research to execute service correctly. One panelist commented that actually quite the opposite is true; flat rate pay discourages use of diagnostics. Another panelist indicated that from his experience, only 0.3 hours of flat rate time for any diagnostics is paid for, yet many diagnostic routines take significantly longer.
Given the increasing complexity of vehicles, proliferating model configurations and reductions in the frequency of 'pattern failures', this trend can be expected to accelerate. Furthermore, because warranty coverage typically pays for actual 'repairs', technicians have greater incentive to replace parts and less incentive to spend time diagnosing root problem cause. This perverse incentive drives up warranty costs and no-trouble-found rates.
FREQUENCY OF UNCOMPENSATED RESEARCH BY TECHNICIANS
Source: IDC Manufacturing Insights, Impact of Vehicle Electrification Study, 2013
The panelists established that, at least in part, this fundamental compensation issue detracts from the industry's ability to attract the best and the brightest technicians. Additionally, since swift, accurate and cost effective repairs are such a critical customer-facing issue, and can potentially impact brand loyalty, automakers, dealership franchisees and independent repair shops alike must look more carefully at solutions to these issues. The panelists agreed that the industry as a whole requires a paradigm shift from its 20th century business model into the 21st century. This new paradigm includes supporting the upfront investment in technician training, tools and service information to perform better diagnostics, building these added costs into pricing structures, and fixing the broken flat rate pay system. These moves toward approaching 21st century cars with a 21st century business model will ultimately have a positive downstream effect on warranty costs and customer satisfaction.
I look forward to your comments on these issues! Please also contact me directly (sbrennan.com) for a complementary copy of my complete SAE World Congress presentation.