Certainly one of the top buzzwords in our industry these days is “cycle time.” Every insurance company wants to get its insureds back in their repaired vehicles as soon as possible, not so much because of the rental car costs (although they are substantial) but mostly because the auto property and casualty insurance business is very competitive. Every day the customer is out of their own car increases the chance that they’ll become unhappy enough to switch carriers. As we all know by now, switching carriers is really easy. Fifteen minutes can save you 15 percent. All you have to do is click.
A Critical Issue
Over my long tenure in the industry, the time any vehicle spends undergoing repair has remained a critical issue for the body shop as well as the insurance carrier and the vehicle owner. Whether it’s called production output, throughput or cycle time, shorter times are better.
My universal consumer, Mrs. Smith, pays about $100 per month to insure her car. She has a collision claim about every seven years. The insurance company’s financial health depends on Mrs. Smith sending $100 to them every month. If her car is out of her control and under repair for 10 to 13 days, she is inconvenienced, worried and susceptible to another insurance company’s advertising. If it takes too long to get her car back, she’ll be sending her $100 to another carrier.
I really believe the insurance industry is first and foremost concerned with a safe repair of Mrs. Smith’s car. “Pre-accident condition” aren’t just words in a contract.
Once a safe repair is accomplished, the insurance company is concerned with their dollar cost and the downtime. An auto accident often results in both a medical and a property claim against the carrier. Medical costs seem to spiral upward every month in spite of numerous efforts to bring them under control. In addition, physical injuries are hard to predict. Is that a $1,500 broken arm or a $15,000 broken arm? It looks to me like the insurance folks are concentrating on repair costs as an easier number to benchmark. Never forget that the insurance industry has the best data about collision repair anywhere. They’re the ones paying the costs of thousands of auto body repairs every day. Their numbers are collated by buildings full of actuaries, and they have benchmarks for every possible cost of collision repair.
You’re the Only One
You have no doubt been the recipient of the famous “Your shop is the only one that charges for that” assault by the local adjuster. My 43 years in our industry suggest that conflict is often a local issue between that shop and that adjuster.
At the home office level, the insurance company has staggeringly accurate statistics on every aspect of collision repair, including how many new, used or aftermarket parts are employed, what percentage of the repair is paint and material, what percentage of the labor is metal, structural, refinish or sublet and any other compilation possible. After hundreds of thousands of repairs, they have some voluminous and narrow number ranges. These are the benchmarks that make up the DRP score sheets. If your shop produces repairs that consistently fall outside insurers’ extensive range of benchmarks, you’ll be downgraded.
One number that frustrates everyone involved is the downtime it takes to complete the repair and return the vehicle to Mrs. Smith. I think that the average repair (around $2,000) could be completed by the average tech (100 percent production efficiency) in three days. And yet statistics suggest that the average collision repair is out of Mrs. Smith’s control for between 10 and 13 days. No wonder the insurance company and Mrs. Smith are anxious about the process.
Parts Management
My opinion (you can argue that I’m wrong, but you can’t argue that it’s my opinion!) is that the single biggest impediment to productive collision repair is poor crash parts management. Beginning the repair without having all the replacement parts unwrapped, inspected for damage and checked against the repair order is a recipe for delay. Not only does this slow the repair of Mrs. Smith’s car, it causes the techs to demand another work stall and the shop to buy a second or third frame machine. How so? The tech begins repair and disassembly only to discover (after hunting around in the cardboard-wrapped haystack of crash parts in the back of the shop) that the needed parts are not there. Those missing parts must be ordered and received, and sometimes a supplement filed and approved, by the insurance company.
In the meantime, the tech insists that he be able to continue working and begins on another vehicle, only to discover that one is missing key repair parts as well. Now with three work stalls assigned to one tech, his productivity (flag hours to contact hours) is high, but by splitting work among three repairs, his cycle time on each repair is slowed to a crawl. Having written about structural repair racks and benches several times for BodyShop Business, I think many shops purchased a second or third frame machine because too often, a car clamped down on the first one rendered it unusable while the missing parts were ordered and shipped. Can the solution be simpler than buying yet another $50,000 frame machine or three work stalls per tech? I
think so.
The most productive shops I know all use parts carts and never begin work until all ordered components are on hand, unpackaged and hanging on the carts ready to go. There will still be plenty of delays when hidden damage is uncovered during repair and wholly unforeseen parts must be acquired, but the “A” shops don’t start until the right tech and the right parts are in place. I advocate using at least one R & R parts cart and at least one R & I cart to make the technician most efficient. Cycle time remains a moving target; the same uncontrollable variables that frustrate the insurance company frustrate the body shop, too. It was a $2,000 hit, but was it hit in the front, the rear or the side? Or did a tree fall on it? Or did a wayward deer bounce off it? Nice guys that all your shop’s techs are, some of them are faster than others. Matching the right tech to the repair is why scheduling collision work is so difficult.
On a Roll
Back in 1970, few shops used wheeled parts carts; the best players had an organized parts storage room with clearly marked stalls for each RO’s repair parts. But it’s much faster to be able to hang the parts on a cart and roll it right to the work stall.
Improve your shop’s cycle time by doing a better job with your crash parts. Mrs. Smith, the insurance company and your technicians will all be happier with shorter cycle times!
Mark R. Clark is the owner of Professional PBE Systems in Waterloo, Iowa; he is a well-known industry speaker and consultant. He is celebrating his 25th year as a contributing editor to BodyShop Business.
