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Change Waits For No One

In the rapidly changing world of collision repair, something that was revolutionary yesterday may be obsolete tomorrow — including your business.

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In the beginning, there was darkness across the collision industry — this darkness a result of the lack of equipment, training, knowledge and available technology. Our industry, however, was content to wander through this darkness for many years.

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Why? Because competition was minimal and demands on us to be professional managers was almost non-existent.

Business was normally conducted without an office in most cases, so receptionists and office staffing weren’t needed. "Estimator" was a term for the insurance industry, and the shop’s owner only gave estimates (many times verbally) while working on vehicles. Work was almost unlimited, the production staff (if you had any) usually did the complete job from start to finish and customer service representatives weren’t even a consideration until consultants in the 1980s told us we needed them.

The model sure has changed!

Today’s competition and demands on our ability to be professional managers of our businesses are affecting every business decision we make for our future — whether we know it or not. But before we get to today and the future, let’s step back to the beginning of this transformation.

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The Change
The beginning of the fast-paced changes affecting our industry can be traced back to the late 1970s. During this time, everything was going so well …

Vehicles really hadn’t changed much for some time. Of course, they threw a few "trick" colors at us, used a little aluminum once in a while, increased plastics replacing "pop metal," and used absorbers and reinforcement bars instead of bumper braces, but it didn’t cause us to re-think our management strategies. And, since "real computers" were just recently downsized to the size of an entire room and personal computers were but an expensive toy that had a long way to go for both functionality and price, computers didn’t even enter into our strategies for handling the vehicle changes.

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When the vehicle changeover took place, however, it not only affected the repair process, but it also made new equipment necessary to repair the vehicles — along with training for both the technicians and the management staff.

This vehicle changeover is what began the change of our business model — a business model we’d been operating for decades.

Very little overhead translated into high net profits, but the changes were requiring us to do business in properly managed and designed operations with overhead costs we wouldn’t have dreamed of five years earlier. Many failed to make the transition. We were also hindered with little direction or any successful business models to pattern ourselves after.

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Along with the overhead purchases of MIG welders, frame benches, measuring systems, plastic welders and then, later, paint booths, prep stations, drying units and mixing systems came a need for training and a better way to run our businesses. Comprehensive management systems were non-existent in the 1970s but, by the 1980s, they were identified as an important need for our industry.

Auto-Repair Management Systems Are Born
Early manual systems were first introduced and were very time consuming and difficult to use on a large scale. Unfortunately, looking for computers then was even more confusing than today, since mini-computers were still the big thing and personal computers all had their own operating system and expensive software. I remember reviewing at least a half-dozen "body shop" software programs requiring specific hardware because it was written for that specific operating system.

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You may not agree with all the virtues of Microsoft, but the one concept that changed all industries, including ours, was the standardization of an operating system called DOS (Disk Operating System). This has led to standardized development of software that would cost 10-20 times more if the operation system weren’t standardized to the extent it is today.

The change to DOS didn’t immediately occur in the collision repair industry because out of the darkness came a visionary who began to provide a business model for body shops to follow: Denny Kiyohara is noted as the founder and father of ARMS (Auto Repair Management System). This system wasn’t DOS based but a variation of UNIX, a solid multi-tasking environment not equaled by others at that time (some may say even today), and it allowed shop owners to perform profitability analysis, job costing and additional accounting functions, including payroll.

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Of course, this didn’t occur overnight. Programming glitches were handled "on the fly," and revisions were sent to their user network as needed. This was truly the beginning of the user group concept.

Beside Kiyohara, it took others, such as Jack Sutherland, to implement the sales force to the industry. This changeover was no small step … the costs could easily reach more than $30,000. But this investment wasn’t just hardware and software. It was about training and a new way of doing business. In many cases, it meant a complete change from the past.

A Temporary Solution
The ARMS solution couldn’t have worked if leaders hadn’t come forward to share their knowledge, as well as companies making it possible with financial support. The seminar circuit began with original users and soon began to grow with trainers and support staffing. A few who made it possible: Ed Woodall, Chuck Sulkala, Jeff Hendler, Bob Richards, Jon Fryxell, Gary Baker, Dave Arnesen, Peter Shapiro, Ron Sethre, Sondra Levy-Davis, Scott Mills, Trina Rhodes, Cheryl Boyd, Tim Wilder, Tom Adamczyk, John Sutherland, Chris Sutherland, Catherine Gonzales, Charmaine Dunn, Cindi Adams, Robbi Andrews, Jim Keller, Michael Cahillane, Tom Winters, Barbara Cellini, Tom Cellini and Joyce Schuenke. Note: The list of credits above wasn’t intended to be all inclusive, so if I forgot your name, please excuse me.

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The ARMS following was incredible. Training sessions had, at times, more than 100 attendees wanting to learn not only the computer program, but a new way of doing business. Then, "P-page" logic allowed us to charge for many operations that we were never able to write before, due to the "un-education" of others in our market.

This time in our industry was an awakening for many. Mega shops of 20,000-40,000 square feet began to grow in many cities, and the "true businessman" and "businesswoman" of the collision repair industry began to rise to the top — while others struggled to survive the changing times.

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But soon, the repair market began to shrink and staffing began to dwindle. These changes are still here today and will continue to affect our industry for the years to come. In addition, technology is changing so fast that even those who took the leap years ago are faced with obsolescence and challenges of the years following 1999.

Putting ARMS to Rest
In Chicago recently, an ARMS Reunion and Technology Exposition — along with a funeral ceremony for ARMS — took place. Organized by the Cellini family and sponsored by major supporters of our industry, more than 100 collision shop owners attended from across North America.

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It was really incredible to see all the devoted users of ARMS and listen to their testimonials about how a single product changed not only their business and professional lives, but their personal lives. In addition to the reunion, the ARMS System was officially and ceremoniously put to rest — a victim of the impending millennium and the advancements in technology. Because technology is changing so rapidly, current technology was introduced at the reunion by a number of companies to provide insight on management software solutions for the collision repair industry and to answer haunting questions about the current software’s future.

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Concern surfaced because many shop owners are now faced with something they haven’t had to worry about for many years. Around the room, you could see many frightened attendees struggling with their decisions and options to prepare for the Year 2000 fate of much of their computer world. The changes and relearning process would need to be repeated with newer, faster, more sophisticated — and different — software.

Many have used the same ARMS system for the last 10-plus years with only support from a dedicated individual, namely Joyce Schuenke, who worked on her own and helped out whenever someone had a problem. In many cases, the ARMS System helped to turn many current shop owners into managers of their businesses — and these people really don’t want to give it up for another system.

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But give it up they must.

These Changing Times
The ARMS users and many others in our industry must now give way to more advanced business integration, Windows-based estimating systems, photo imaging, human resource, production, parts, sales, and financial management-based programs. The programs are available from many providers, but the basic financial concepts of ARMS will never die.

The realization that all must accept is that even today’s newest, cutting-edge systems will be constantly changing and using newer technology as it becomes available. One point stressed repeatedly in many of the presentations was that the technology used in many of the shop owners’ ARMS systems was up to 18 years old and that their next choice will be obsolete in no more than five years — more likely, three years.

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This is a big adjustment for us. In the past, equipment solved most of our problems, and it was sometimes considered a "one time" purchase in our minds. But the future will require innovative systems to utilize our space, equipment and staffing to just remain competitive — and they’ll update, revise and become obsolete much more quickly.

For example, the ball point pen took more than 30 years to be introduced from the time of its invention. Since then, however, the technology expess has picked up speed. Just look at computers. They’re now updated almost every quarter. What’s introduced today is already obsolete tomorrow since a better, faster and possibly cheaper version has already been invented and is in the process of being introduced. Times are moving faster than ever — and they’ll continue to accelerate.

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Even the common business model today is nothing like the model for the future, as noted by most industry leaders. Concepts from both the United Kingdom and Japan are sure to come to North America. Production lines, categorized repairs, division of labor, new vehicle and staff scheduling systems, and space/time utilization will be used to produce the highest production efficiency ever reached in the collision repair process. The industry will finally enter the Industrial Age for the production process, while administration and communication will be firmly planted in the Information Age. This is surely going to lead to an interesting transition for many who have avoided such "nonsense" to date.

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What Now?
Today, our industry must be able to manage more than the profitability of each job. CSI tracking, closing ratios, job scheduling, part-locator systems and turn rate are becoming important for future success. Competition — which we hadn’t experienced in the past to the extent we do today — will be the influence to force these changes to our business model.

Are all the tools developed to accomplish this feat? No, but almost all are currently in development. In the next few years, innovations in how vehicles are scheduled, how work is distributed and how the process is monitored will be nothing like today. Yet, through it all, quality will not (cannot) suffer. In fact, it will improve.

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For the future, systems that handle many of our departmental processes will continue to improve and further streamline the repair process. These include wireless communication; visual models, like airline monitors for production staff and customer review; Internet connections; e-mail; and video to customers, insurers and vendors. Also, E-Commerce (Electronic Commerce) will offer paperless billing and payments that will be submitted on-line and paid to our account electronically.

Is this a far cry from the 1970s? Yes, but it’s not unexpected considering that most other businesses have changed at this rate too. Supermarkets have even entered the paperless E-commerce arena — some going so far as to have self-scan lanes. Wouldn’t it be great if our customers fixed their own cars and still payed us?

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A Brave New World
During times of change and evolution, there are always those who refuse to change. And many will not succeed for this reason.

Most, however, don’t refuse to change altogether. Instead, most refuse to change until they absolutely have to. They’re reactive, instead of proactive. Unfortunately for many, that way of thinking no longer fits into the new world of collision repair. Leading shops in this industry are proactive. They anticipate changes, and they change before they’re forced to.

The death of ARMS forced a lot of people to really think. Here was a system that revolutionized the industry being put out to pasture. It exemplified that no matter how cutting edge you are today, you can still be obsolete tomorrow. But you can stop that from happening to your business.

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The changes related in this article have or are going to happen to some degree, so what are you going to do about them? I remember a saying by Will Rogers that went something like, "You can be on the right track, but if you aren’t moving, you’ll still get run over!"

The technology express is moving faster than ever and this industry is changing faster than ever. And they wait for no one. The question is, are you going to be a victim in their path or are you going to set up your business for success in the next millennium?

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Contributing editor Tony Passwater is a long-time industry educator and consultant who’s been a collision repair facility owner, vocational educator and I-CAR international instructor; has taught seminars across the United States, Korea and China; and is currently an industry consultant. He can be contacted at (317) 290-0611.

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