The Automotive Service Association (ASA) recently issued a letter (see Industry Update, pg. 12) to CARSTAR CEO Dick Cross in response to the letter he and CARSTAR COO Dan Bailey wrote and released to the industry last April calling for collision repairers to execute a ‘responsible pushback’ against insurers. One comment I found interesting was this:
“At some point, increasing business efficiencies will not be an option for the collision repairer to achieve a profit.”
It got me thinking, can a business ever max out on efficiency? Where there’s literally no other possible area to streamline, process to improve or cost to cut? Or, are there always new additional efficiencies to be found, you just have to know where to look?
I’ve certainly talked to shop owners who believe they’ve done everything they can and cannot get any more efficient than they already are. But have they really? Is there
really such a thing as maxing out efficiency?
I figured there was no better person to ask than the lean process expert himself, BodyShop Business contributor John Sweigart, whose monthly ‘Lean & Mean’ articles talk about clever and interesting ways to streamline your production process.
BodyShop Business: Let’s get right to it, John. Can a body shop truly max out its efficiency where there literally is nothing left to do to further streamline processes?
John Sweigart: Absolutely not. The truth is that there’s no end to efficiency gains, only an end to the belief that gains are possible.
There are huge amounts of waste (the opposite of efficiency) in the typical business model of collision repair. I’ve literally mapped it out many times, measuring how far people walk to get stuff or how many times techs start and stop and start and stop on jobs, or how many times estimates are re-written (supplements) or parts re-ordered. It goes on and on. Heck, on our first crack at trying to understand waste in collision repair, we measured that a technician walked two-and-a-half miles to fix a car and a car traveled over four miles to be repaired (that’s in a 12,000-sq.-ft. building). We also found that it took us three tries at estimating before we ever knew what was really wrong with a car in the first place.
BSB: So how does a shop owner find things to improve?
JS: Look at Toyota. They’re pretty darn efficient as it is. However, their entire purpose is not to build great cars but to look for an improvement in efficiency each day. They never stop looking, and once they think an area is maxed out, they’ll literally break the process by removing tools, people, space or any resource that they spend money on and find a way to make it work all over again. There’s always a better way.
BSB: But John, all we’ve ever heard our whole lives is, ‘If it ain’t broke, don’t fix it.’ The philosophy you just espoused seems to contradict that. Even if a process is perfect, you break it anyway and start over?
JS: You’re correct, but the saying now goes, ‘If it ain’t broke, break it.’ It’s some very different thinking, but clearly it has put companies like Toyota way out front of the competition.
They use an improvement curve chart to demonstrate their thinking. It shows an upward curve of continuous improvement. This isn’t a straight line but a curved line getting exponentially more upright, and it poses another identical line next to it, but farther down the timeline. What it shows you is that as you begin to continually improve, and your competition does too but just a little later than you, the gap between you and them will always grow, even if you improve at the same rate. It’s an incredibly paranoid way to think, but essentially exposes the truth that your competition can be as good as you by simply implementing exactly what you do. The only sustainable advantage therefore is to build a system with the sole objective to simply improve. Not building cars, or fixing them in our case, but to just improve what you do every single day. Improvement becomes the work, not turning the wrench.
…That is a radical new thought process. But this is a radical time, isn’t it? Desperate times call for desperate measures. So the next time you think you’ve improved on everything you can, think again.
Jason Stahl, Managing Editor
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