Last year was a big one for the RV industry. We saw record sales along with record revenues and increased profits, and, of course, more headaches.
The industry set another record, but not the good kind. Repair Event Cycle Times (RECT) were at all-time highs.
First, a quick history lesson.
In 2018, when IDS was tasked with develping the RECT reports for RVDA, I was excited to be able to quantify the averages and provide information that could have a major impact on the industry.
Looking back at the numbers in 2018, we can see why improving cycle times garnered so much interest. The average 2018 RECT was just under four weeks, at 27 days. For warranty-claim issues, repair times averaged 37 days, and when a part was out-of-stock, cycle times increased to an incredibly long 53-day average.
For comparison, when no warranty was involved and all parts were in stock, the average RECT was 16 days. So, a warranty claim added 21 days, and an out-of-stock part added 37 days.
In 2018, intense industry momentum pushed to improve RECTs. The RV Training Institute was fully funded and tasked with reducing RECT. RV manufacturers teamed up with suppliers to expedite parts fulfillment, and dealers looked more closely at their processes and procedures.
The extra effort’s impact was apparent in the subsequent numbers. By the end of 2019, the RECT average stabilized, and out-of-stock parts RECT began to improve. RECT improvement continued into early 2020, but then March arrived—and, well, you know what happened.
In 2020, RV dealers faced many pandemic-related challenges. Many manufactures were forced to close early in the pandemic. Dealers quickly saw dwindling inventories as demand rose. With community lockdowns and government guidelines restricting access to showrooms and trade shows, many dealers were compelled to invest in new techniques and technologies to interact with prospects and their current customer base.
The challenges were so great, RECT may have taken a backseat (or a bunk bed/couch in an RV). From March through May, everyone experienced a pandemic dip in service volume. The country held its collective breath.
However, by June 2020, service volume returned to normal but faced severe supply chain and staffing issues. Dealers and RV manufacturers were in survival mode.
During the last half of 2020, cycle times began to spike. Times averaged just more than four weeks, at 29 days. Warranty-related RECT averages were up to 41 days, and out-of-stock-parts-related RECT averages jumped to 59 days.
When no warranty claim was involved and all parts were in stock, the 2020 RECT average stood at just 17 days. A warranty claim added 24 days, and an out-of-stock part added 43 days.
December was the worst month of the year, with cycle times averaging 44 days. Meanwhile, warranty RECT increased to 58 days, and out-of-stock RECT soared to 79 days.
RECT in 2021
Last year ended with more than 600,000 new RVs shipped to dealerships—a 19% increase over the previous record set in 2017. The final number was an almost 40% increase over 2020 wholesale shipment numbers. As expected, service volumes grew with more RVs on the road.
In the spring of 2021, consumers with RVs in the shop rose by more than 10% over the previous year’s total. Total RVs waiting for service continued at above the annual average for the remainder of the year. The service volume increase, along with ongoing RV technician shortages and supply chain challenges, detrimentally impacted RECT.
The average 2021 repair cycle time was 34 days (7 days more than 2018).
Warranty-related RECT increased to 48 days (11 days more than 2018).
Out-of-stock-part-related RECT soared to 75 days (22 days more than 2018).
When there was no warranty claim and all parts were in stock, the average RECT was 19 days.
A warranty claim added 29 days to the average RECT, and an out-of-stock part added 56 days. December was once again the worst month of the year, with cycle times averaging 50 days. RVs with a warranty-claim service issue increased RECT to 65 days, and out-of-stock-part-related RECT was 93 days. Getting an RV fixed in 2021, on average, took twice as long as in 2018.
Oh, how I miss the good-old days.
The percentage of customers affected by these two main bottlenecks have seasonal ups and downs but remained constant during the last four years. On average, 43% of all service work orders include warranty claims, and 22% have at least one out-of-stock part. These percentages are the only constant factor regarding RECT.
Where Do We Go from Here?
So, what can you do? Have you heard the phrase, “You can’t manage what you don’t measure”? If you are not tracking your business’s RECTs, now is the time to start.
Detail and record your cycle times and how warranty claims and out-of-stock parts affect them. Do not stop there. To determine areas needing improvement, look at individual components having the biggest impact on your RECT.
When examining work orders with out-of-stock parts, contemplate the three main components that historically influence RECT:
- Identification days: The length of time to identify and order all parts needed for the repair.
- Lead time days: The length of time to receive all ordered parts.
- Repair wait days: The length of time after receiving the part to complete the repairs.
When reviewing work orders with warranty claims, the three main components to track are:
- Start days: The length of time to start the last aspect of the job.
- Job days: The length of time to complete all jobs related to the warranty claim.
- Delivery days: The length of time to complete the work order and return the vehicle to the consumer after all repairs are finished.
By tracking these key performance indicators, you will have a better understanding of how warranty claims and out-of-stock parts impact your RECT, as well as having a better idea of how to improve your cycle times and address specific service delays.
Tracking your statistics enables you to then determine if any procedural changes are having the desired effect.
Your data is gold—mine it often.
Don Miller is a senior data consultant at Constellation Dealer Group. With more than 30 years of experience in the industry, Miller provides training, consulting and analytical services to dealerships. He specializes in data analysis and worked extensively to educate dealerships on adopting a data-driven decision model. Miller created the IDS RECT report, an RVDA Chairman’s Service Award-winning report. The report is used globally by dealerships to deliver better customer experiences.