 "Shifting into top gear")
Consider these numbers. Research shows that car customers do not depend on the authorised service network for vehicles over seven years of age, but patronise local garages. Given the huge vehicle population in the country, it is evident that automotive servicing in India is still largely unorganised. That apart, JD Powers latest Vehicle Dependability Study reveals that the routine servicing and maintenance at authorised service centres has been declining during the past two years. Only 69 per cent of owners have taken their vehicle to an authorised dealer/service centre four or more times, down from 91 per cent in 2011. Besides, there has been a drop in the number of customers opting for extended warranty programmes that help prolong the brand-customer relationship in the post-warranty period. In short, a huge market lost for vehicle manufacturers.
Not one to let an opportunity pass it by, Maruti Suzuki, Indias leading car manufacturer, is looking at propping up its revenue figures of its service network with a smart after-sales strategy. The new plan rests on two planks: first, expand the coverage area with innovative outreach programmes and second, step up technology inputs at the service centre level to cut down on the time taken to process one vehicle so that the same centre can process more service requests any given day. Pankaj Narula, executive director (service), Maruti Suzuki, says, It is simple math. If you sell less, you will end up servicing less. For us, after first three free services, a vehicle requires servicing at least three times in a year. In current scenario, effective servicing can be a game changer for original equipment manufacturers (OEMs), he says.
What will work in the companys favour, hopes Maruti Suzuki, is its already vast service network. Currently it has a network of 2,971 service centres comprising 1,460 dealer workshops and 1,511 Maruti authorised service stations. Over and above that, it has more than 300 mobile workshops (converted Eeco) servicing Maruti vehicles in markets where state-of-the-art workshops might just be out of reach both in terms of distance and affordability.
Technology is the facilitator
Due to slowdown in the auto sector, most manufacturers are looking to boost numbers through vehicle service and, in turn, earn customer loyalty with the right after sales experience. Expanding service networks would have been the ideal strategy to stay on top of the game. This is difficult since servicing is largely an outsourced function. The bigger servicing network one has, the harder it is to maintain standards.
To get around the problem, Maruti has divided its servicing network into five zones, with a few regions coming under each zone. For instance, Hyderabad and Cochin come under the south zone. Again, each region is further divided into areas. This makes communication between various centres easier something that is crucial if the company were to avoid stock-out of parts.
Next comes the daunting task of making dealer workshops time efficient. Our long-term objective is to deliver better numbers from the existing facilities without compromising on the service quality, says Narula. The last three years have been very exciting as our dealers incorporated various changes to drive efficiencies at workshops, he adds.
Over the years, Maruti has been sharing technological know-how with dealer workshops to offer cues on servicing faster. The company-owned Maruti Service Masters outfits in Delhi (four of them are currently operational) work as an innovation lab to pilot new technology for dealer workshops. New technology and ideas are then introduced to Marutis dealer network.
Over the last year or so Maruti has introduced a series of small steps that have gone a long way in cutting down the overall cycle time. If we were to break down the job into a series of steps this is how it works now.
Earlier, when a customer brought her car to the service station, she had to first fill up a job card in the reception area. At this stage, a service advisor came into the picture who interacted with the customer and examined the car to understand the requirements. After this step, the service advisor dug out the vehicle history from a central server and added the new information. All this while, the vehicle owner was a mute observer who was required to hang around just in case there was some missing information to fill in. Now look at how the company has turned the whole thing around.
Maruti asked dealers to give tablets to their advisors to ease the process of opening a job card. Now the advisor can access the service history of a vehicle by punching its registration number in the tablet. All this while he is inspecting the vehicle and advising the customer. Net gain: While it used to take a minimum of 15 minutes to get through this stage earlier, it now takes all of three minutes. At this stage the service advisor clicks pictures of the car so that there are records of the car at the handover stage. Roughly 275 Maruti workshops have switched to tablet job cards already.
Step 2, the car enters the service bay. This stage is the most crucial from the servicing viewpoint and the time saved here can contribute significantly towards wrapping up the whole process faster. A regular service bay earlier had one technician who took around two hours to service one car. The activities conducted here include oiling the engine, and gear and break cleaning. The main problem in the bay area was that the job description was not clearly defined for the technician. The technician ended up wasting valuable time doing petty jobs like fetching different types of oils etc. This mad rush mostly resulted in oil spillage.
The new express service bays ensure better utilisation of time. Each bay has separate tool trolleys and the new oil management system allows technicians to choose the right pipe and fill the engine instantly. These pipes are connected to a variety of engine oil drums. Errand boys can be employed to supply spare part kits. Another advantage of the new service bay is that two people can work on the same car simultaneously.
At first sight this new set-up appears capital and labour intensive. Indeed, the cost of setting up one of these service bays can be as high as Rs 2.5 lakh. But then the volume of cars serviced at an express bay it would be more than double the current number can nullify the effects of new investments over a period of time. As of now 1,318 express bays across 877 Maruti workshops are handling 11,862 vehicles per day. Service time taken for each vehicle at this stage has come down to 90 minutes only from two hours earlier. Since labour is still not very expensive in India, dealers can afford to hire more errand boys. While a regular bay services only three vehicles in a day, the express bay can deliver up to eight.
To provide output, some workshops have increased their working hours significantly by adding night shifts. Currently 17 workshops are working night timings. There are innovations on the car wash front as well. The newly installed automatic car washers (investment required: Rs 7 lakh) can clean one car in just five minutes. The average manual washing time is between 10 and 12 minutes. The company has also started pushing its dry-wash system in water scarce service locations. This has resulted in a 15 per cent reduction in labour time as cleaning can be done at the service bay itself. A new vehicle tracking system ensures little time is wasted while moving a vehicle through the different service stages.
Such technological inputs call for high investments; so Maruti has left it to individual dealers to work out the time line for upgradation. That said, equipment standardisation is enforced strictly.
People are the movers
People with appropriate skills are hard to come by in every industry and vehicle servicing is no different. The current attrition rate for technicians at Marutis dealer network is between 10 and 15 per cent. The company has been hiring technicians from Industrial Training Institutes (ITI). In Narulas opinion, today ITIs are not equipped to provide the right training in the latest technology due to the lack of adequate infrastructure.
Given that, earlier, when Maruti hired a technician from one of the ITIs, it took the new recruit at least two years before he made a measurable difference. Now, Maruti has joined hands with several ITIs to bring technology to the class rooms. Additionally, the company has built close to 17 training centres across its five zones. After coming on board, the technicians undergo further trained on basic, advance and diagnostic certifications.
In the year 2012-13, Maruti Suzukis service network grew 5 per cent over the previous fiscal and it serviced 17 million cars (including accidental repairs). The service volume is expected to increase 8 per cent this fiscal and over 20 per cent in the next three years. Clearly, the investments are beginning to pay back.
Not one to let an opportunity pass it by, Maruti Suzuki, Indias leading car manufacturer, is looking at propping up its revenue figures of its service network with a smart after-sales strategy. The new plan rests on two planks: first, expand the coverage area with innovative outreach programmes and second, step up technology inputs at the service centre level to cut down on the time taken to process one vehicle so that the same centre can process more service requests any given day. Pankaj Narula, executive director (service), Maruti Suzuki, says, It is simple math. If you sell less, you will end up servicing less. For us, after first three free services, a vehicle requires servicing at least three times in a year. In current scenario, effective servicing can be a game changer for original equipment manufacturers (OEMs), he says.
What will work in the companys favour, hopes Maruti Suzuki, is its already vast service network. Currently it has a network of 2,971 service centres comprising 1,460 dealer workshops and 1,511 Maruti authorised service stations. Over and above that, it has more than 300 mobile workshops (converted Eeco) servicing Maruti vehicles in markets where state-of-the-art workshops might just be out of reach both in terms of distance and affordability.
Technology is the facilitator
Due to slowdown in the auto sector, most manufacturers are looking to boost numbers through vehicle service and, in turn, earn customer loyalty with the right after sales experience. Expanding service networks would have been the ideal strategy to stay on top of the game. This is difficult since servicing is largely an outsourced function. The bigger servicing network one has, the harder it is to maintain standards.
To get around the problem, Maruti has divided its servicing network into five zones, with a few regions coming under each zone. For instance, Hyderabad and Cochin come under the south zone. Again, each region is further divided into areas. This makes communication between various centres easier something that is crucial if the company were to avoid stock-out of parts.
Next comes the daunting task of making dealer workshops time efficient. Our long-term objective is to deliver better numbers from the existing facilities without compromising on the service quality, says Narula. The last three years have been very exciting as our dealers incorporated various changes to drive efficiencies at workshops, he adds.
| REVISED SERVICE GUIDE |
| Step 1: After interacting with the customer, service advisor opens the job card on a tablet Step 2: The vehicle moves to the express bay. Each bay has separate tool trolleys and the new oil management system. Here two people can work on the same car simultaneously |
Step 3: After final inspection, the vehicle moves to car washing bay. The new automatic car washers can clean one car in five minutes
Over the years, Maruti has been sharing technological know-how with dealer workshops to offer cues on servicing faster. The company-owned Maruti Service Masters outfits in Delhi (four of them are currently operational) work as an innovation lab to pilot new technology for dealer workshops. New technology and ideas are then introduced to Marutis dealer network.
Over the last year or so Maruti has introduced a series of small steps that have gone a long way in cutting down the overall cycle time. If we were to break down the job into a series of steps this is how it works now.
Earlier, when a customer brought her car to the service station, she had to first fill up a job card in the reception area. At this stage, a service advisor came into the picture who interacted with the customer and examined the car to understand the requirements. After this step, the service advisor dug out the vehicle history from a central server and added the new information. All this while, the vehicle owner was a mute observer who was required to hang around just in case there was some missing information to fill in. Now look at how the company has turned the whole thing around.
Maruti asked dealers to give tablets to their advisors to ease the process of opening a job card. Now the advisor can access the service history of a vehicle by punching its registration number in the tablet. All this while he is inspecting the vehicle and advising the customer. Net gain: While it used to take a minimum of 15 minutes to get through this stage earlier, it now takes all of three minutes. At this stage the service advisor clicks pictures of the car so that there are records of the car at the handover stage. Roughly 275 Maruti workshops have switched to tablet job cards already.
Step 2, the car enters the service bay. This stage is the most crucial from the servicing viewpoint and the time saved here can contribute significantly towards wrapping up the whole process faster. A regular service bay earlier had one technician who took around two hours to service one car. The activities conducted here include oiling the engine, and gear and break cleaning. The main problem in the bay area was that the job description was not clearly defined for the technician. The technician ended up wasting valuable time doing petty jobs like fetching different types of oils etc. This mad rush mostly resulted in oil spillage.
The new express service bays ensure better utilisation of time. Each bay has separate tool trolleys and the new oil management system allows technicians to choose the right pipe and fill the engine instantly. These pipes are connected to a variety of engine oil drums. Errand boys can be employed to supply spare part kits. Another advantage of the new service bay is that two people can work on the same car simultaneously.
At first sight this new set-up appears capital and labour intensive. Indeed, the cost of setting up one of these service bays can be as high as Rs 2.5 lakh. But then the volume of cars serviced at an express bay it would be more than double the current number can nullify the effects of new investments over a period of time. As of now 1,318 express bays across 877 Maruti workshops are handling 11,862 vehicles per day. Service time taken for each vehicle at this stage has come down to 90 minutes only from two hours earlier. Since labour is still not very expensive in India, dealers can afford to hire more errand boys. While a regular bay services only three vehicles in a day, the express bay can deliver up to eight.
To provide output, some workshops have increased their working hours significantly by adding night shifts. Currently 17 workshops are working night timings. There are innovations on the car wash front as well. The newly installed automatic car washers (investment required: Rs 7 lakh) can clean one car in just five minutes. The average manual washing time is between 10 and 12 minutes. The company has also started pushing its dry-wash system in water scarce service locations. This has resulted in a 15 per cent reduction in labour time as cleaning can be done at the service bay itself. A new vehicle tracking system ensures little time is wasted while moving a vehicle through the different service stages.
Such technological inputs call for high investments; so Maruti has left it to individual dealers to work out the time line for upgradation. That said, equipment standardisation is enforced strictly.
People are the movers
People with appropriate skills are hard to come by in every industry and vehicle servicing is no different. The current attrition rate for technicians at Marutis dealer network is between 10 and 15 per cent. The company has been hiring technicians from Industrial Training Institutes (ITI). In Narulas opinion, today ITIs are not equipped to provide the right training in the latest technology due to the lack of adequate infrastructure.
Given that, earlier, when Maruti hired a technician from one of the ITIs, it took the new recruit at least two years before he made a measurable difference. Now, Maruti has joined hands with several ITIs to bring technology to the class rooms. Additionally, the company has built close to 17 training centres across its five zones. After coming on board, the technicians undergo further trained on basic, advance and diagnostic certifications.
In the year 2012-13, Maruti Suzukis service network grew 5 per cent over the previous fiscal and it serviced 17 million cars (including accidental repairs). The service volume is expected to increase 8 per cent this fiscal and over 20 per cent in the next three years. Clearly, the investments are beginning to pay back.