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Taking on an apprentice has no doubt benefits
The benefits to the South African automotive community of the strategic partnership between the Institute of the Motor Industry (IMI), with global headquarters in the United Kingdom, and the RMI in South Africa are demonstrated in a number of initiatives including knowledge sharing and raising awareness around the benefits of apprentice and staff training.
IMI research in the UK has proven a Return on Investment (ROI) for employers from automotive apprentice training which resulted in the building of an easy to use and free on-line calculator for employers to estimate their return for employing an apprentice before they employ them (http://www.theimi.org.uk/graph).
Recognising the impact of this work in the UK, the merSETA commissioned the IMI as a research partner to undertake a similar project for the benefit of the South African automotive community. The basic criteria for employer participation in the research, to build a South African on-line ROI apprentice calculator, were training CBMT registered apprentices and rigorous measurement of workshop staff’s performance through Attended, Worked and Sold hours.
Fundamental Workshop Ratios
The importance of accurately recording Attended, Sold and especially Worked hours cannot be overemphasised. In this short article we demonstrate, with the use of a simple diagram, how these data combine and interact in the calculation of the three fundamental workshop ratios: Efficiency, Utilisation and Productivity. Understanding how these ratios interact can influence significantly the profitability of a workshop. We hope this will assist the understanding of young trainees and apprentices and provide a useful communication tool for workshop managers.
How the ratios work
A well-managed workshop must maximise the Utilisation of each productive which requires their Worked hours to be a high proportion of their Attended hours (W/A). In turn, the jobs must generate a high number of Sold hours compared to Worked hours which optimises Efficiency (S/W), i.e. how quickly they work. Efficiency should be optimised rather than maximised in order to maintain quality. Therefore, maximised Utilisation and optimised Efficiency will drive high Productivity (S/A).
Try it for yourself with your data
For example, referring to the graphic, if an artisan produces 34 Worked hours from a 40 hour (Attended) week then his Utilisation (W/A = 34/40) is 85%. If he manages to Sell 36 hours then his Efficiency (S/W = 36/34) is 106% and therefore his Productivity (S/A = 36/40) is 90%. Productivity can just as easily be calculated by multiplying Utilisation by Efficiency (i.e. 85% of 106% = 90%). Try the calculation using your own numbers and if you don’t know the actual data on which to make the calculation that’s a good reason to check out why not?
We hope to bring you future articles highlighting the potentially severe impact on profitability resulting from the incorrect recording of workshop times and not keeping a handle on lost time. In the workshop ‘Time is literally money’ so accounting for it is vital.
Authors: Dr Paul Spear – ROI & Research Manager, Institute of the Motor Industry
Louis van Huyssteen – RMI Project Leader: merSETA ROI Apprentice Research