More and more shop owners are looking at “lean” as a possible solution to their business issues. But as always, practical application isn’t easily understood. The basic concepts of removing waste and organizing around processes are often discussed in trade publications, trade associations and 20 groups, but the big question always remains, “How do I do this in a body shop?” This “Lean Success” series of articles is meant to help specifically describe the “how to” by telling the story of how one of our new shops made the transformation successfully.
In the first article (“A Lean Transformation,” March 2008), we talked about the shop’s initial changeover, which was the physical transformation from day one and the “5S” activities everyone needs to do to prep “the machine” for performance. This time, I’ll take you through the next step, which is building and implementing the actual proc- ess and creating the new “value stream.”
Here Comes the Fear
From a people perspective, this “new way” talk brings a good amount of fear. Most everyone who has been through one of our facilities inevitably asks the same question: “How many people quit when you started this process?” What’s evident in this question is that this fear of change lives mainly in the minds of the management, not the production folks.
The foundation of any lean business process consists of two main components: 1) standard work and 2) “kanbans” that drive activity. That means we’re now going to decide on and maintain a specific way to work, and we’ll do that work exactly at the right time only. That’s pretty scary to think about in an industry that typically rewards people for their independent hustle ability. But you as the leadership must know that this fear is unfounded. You must be confident and move past it before you proceed. In other words, don’t hem and haw around the issue. You must tackle these upcoming changes in a way that will allow people to work on them head-on. Might you lose people? Perhaps, but I can tell you that in all of our conversions, we’ve only lost one technician.
Our approach to the issue is simple. First, deal with compensation. In this newest location, on day one, we sat down with the entire team and made them this commitment: “I will not change your earnings or benefits (by the way, that means both ways, no less and no more). Not today at least, but because this is all unknown to all of us, we’ll sit down in 90 days and look at it again. How you receive that compensation may be different, but it won’t be less.”
Following this statement, another question usually pops up: “Does flat-rate pay work in this model?” I tell them that done properly, with some common sharing of performance, flat-rate might work. But I find that real success only comes when you’re willing to take responsibility for labor margin by managing people through process. I believe you should pay your people well to do whatever things the company may need them to do. Anyone who’s going to get rid of waste will find that many activities can be eliminated or made simpler by having non-typical people perform them. In the flat-rate world, you’re going to be hard-pressed to ask someone to perform work that he or she isn’t getting paid for without creating some friction.
The second part of dealing with the fear is asking for some faith followed by some common-sense analysis. For our team, we phrase it like this: “I need your trust that what we’ll be doing here is a better way for you. All I ask is that you allow me to prove it by doing exactly what I ask right now.” Then, we follow it with a simple analysis of the facts: “What we’re about to do, together, is identify and remove unnecessary work from the process of collision repair. Then, we’re going to put all the tools (including training) in place so that everyone can produce quality work the first time, every time, with ease.” And that’s the truth. This process of creating the new value stream will be a team effort with input from across the organization.
Finally, lay the other option on the table. And that’s this: “This is not a test. This is where we’re going and it might not be for everyone. If you know it’s not for you, then let’s quickly find you another place to work.” There’s much work to be done, and the future will absolutely be a better place for everyone in the organization. Do not let one person get in the way of getting to the other side. With the fear now maybe at least “on hold,” you may begin with implementation.
The new system isn’t a cookie-cutter approach but rather will be specific to your organization. Because each operation has different market conditions, physical constraints, employees and customer bases, you’ll build a process that specifically fits your business. You’re not going to do the opposite and build a business to fit your process! I will say, however, that for my company, The Body Shop @, which is growing its business through new locations, a percentage of our existing process is universal, and we simply bring it to the new store. You, however, won’t have this luxury when changing your current organization. So, for your benefit, I’ll tell you what new things we created at the shop as well as what things were not new but rather simply brought along with us.
The starting point for all lean practitioners is the same: Identify the customer (who it is) and identify what it wants/needs from your organization. The second step is determining how much of what you do today serves the wants/needs of the customer. To do this, you must understand the current state of your existing value stream by mapping it out. (You can read more about both of these fundamentals in past lean articles by visiting clicking HERE).
While we had everyone working on 5S activities, we would hold lunch meetings for everyone each day and focus on getting everyone to understand the reality of the situation and the facts behind the current state of the value stream. (Because we’re implementing a percentage of our existing operating model in every project, we use results from several average collision repair operations. You, however, are best served having your own results that your people gathered themselves.)
What starts getting people to understand the need for a new way are the following data:
- How many tasks do we have to perform (on average) to take a customer (whomever you’ve decided it is) from the moment it needs repairs until the service is complete?
- How many of these tasks do we consider to have value in the eyes of the customer? (Remember, value is best defined by asking if the customer is willing to pay for it.) For number of tasks versus the number that add value, the results are shocking. We typically see around 2,000 or 3,000 individual tasks we go through to perform collision repair, and about 100 or so that actually add value. These results are similar to nearly every industry in that around only 5 percent of what we do adds value.
- What is the time spent working on cars versus time in our possession? We like to show summary handouts and photos of actual value stream maps so everyone can see the real story and actual findings. Our studies show that based on hundreds of vehicles and repairs measured, there are only 600 to 700 minutes of actual hands-on time spent fixing cars. The rest of the time is spent getting tools and cars and information and parts…and more parts, and approvals and answers. This one hits home for our technicians because it’s the stuff they complained about and tried to address for years.
Some of the other stuff we examine is the results of motion and movement of both people and product. Our prior measurements show that cars actually travel miles inside of our shops and parking lots. This also says that our people walk at least that far to make repairs. The objective of presenting these data is to sell the case for change by using facts about the current state of things. In nearly every case, these things have all sort of been known but have never really been considered as something that needs to be corrected. But when shown in this new light, they’re self-evident.
Go With the Flow
Putting the new way together at this point is done using the basic rules of “flow.” We now know where the waste is in the process, and we also know where the value is. Starting here, we want the team to follow some basic rules to map out the future state:
1. Work must be performed in the proper sequence, and we’ve determined that this is:
- Vehicle arrival
- Determine exactly what’s wrong
- Parts procurement
- Customer communication
- Structural repair
- Body repair
- Paint prep
- Final paperwork
Inevitably, the team always comes up with the same sequence, but there’s great value in making sure everyone gets it. Realize, though, that this sequence and these activities are not what most shops typically do.
2. Work must be performed in the proper way. This one is always a little tougher because we’re asking our people (who all perform work differently) to tell us the best way we should be doing it. Clearly, everyone’s own way is the best way or they wouldn’t be doing it like that. But now, the best way is going to be built around doing things so that it meets the customers’ needs. Building this proper way means this: “What is the right way to do this work so it has no waste and is done exactly right on the first try?” By waste I mean excess movement, excess waiting, any reworking, any extra steps and any steps the customer wouldn’t pay for. You’ll find that one or two people already have considered how these things structure their work. Also, there’s always a current best way in the organization, so you’ll want to have the group identify it and use it as a starting to point to make improvements either right now or as they begin to work. The key here is team consensus. Take time to examine all options, and make sure to include everyone’s input. You might find that actually demonstrating the work might be the best way to get the answer. Also, this way will need to be documented, posted, trained and reviewed with the team.
It doesn’t matter!
3. Work must flow without interruption between these sequenced steps. This means there’s only one way to put work in and move work through the new system. You can’t jump ahead or go back three steps. The question to the team is: “What must we do so that these jobs can easily go from step to step, one at a time, without going backward?” You’ll find these answers: “We need to make sure we have all the parts and materials here, and that they’re all correct.” “We need to have the right tools to do the job right here in the particular area the job is performed, and they must be available.” “We need to be left alone to do the work.” “We need to know what’s coming down the line and if the next person in line will be able to take my work when it’s done.” “We need to know the right way to do the work.” “We need all questions answered about the work before it’s started.” It’s all very common-sense stuff and answers what’s wrong with the process today, since what’s important today is very different from what was important yesterday. Today, you’re going to address the real problems.
Now the stage is properly set and you can start laying out the details of the system. From here, what you actually decide to do doesn’t matter much. There really is no right or wrong answer when it comes to what you do. For example, the way I prep a car at one store may not work at another because I may have different climates and equipment that cause very different outcomes. The most important thing here is that the reason you’re doing these things is understood: You’re doing these things to better serve the customer. Doing these things will allow you to spend more time and resources adding value for the customer, not performing a multitude of unimportant tasks that no one wants you to do anyway. Too often, people fall in love with the coolness of a tool or a way or a look. It doesn’t matter! What’s important is knowing that the coolness of the process lives only in your mind. It’s crucial that you understand the secret of why we do this and don’t get distracted with how it’s done.
Nothing Is Certain
We’ve built our process first by understanding the required steps of work and their proper sequence. We lay them out end to end and then decide on how we should perform the work the right way. For us, it’s a book describing our standard procedures and operating manual, and it reads from first task to last. Once the steps are understood, we deal with the facility. Where do we do this work, physically? Where do we place the cars so they can easily move forward to the next step and can easily be seen by everyone? What makes sense so that the “flow” of work can be recognized even by strangers? Where does the equipment belong? What about the materials?
These decisions need to made with the consideration that nothing is certain. This is a process of continual change. You’ll wind up making adjustments to this thing almost weekly as you find problems. You’ll also need to adjust as the markets and customers change. Make nothing permanent here. You must be ready to pick up and rearrange in a moment. Try your best not to create immovable monuments. Think of flexibility everywhere.
We took our system and, as a team, made adjustments where things were different in this new shop. We then made sure we physically supported this new way as best we could with visual systems to keep things on track. We made sure everyone knew how the work should be performed and made it easy to locate these rules. And then we just started. What we always find is that initially, everyone wants to do more. There’s a distinct lack of chaos that makes most people uncomfortable. It really takes a “just keep following the process” mentality early on. At these times, a coach is most valuable to keep everyone moving toward process as “the way.”
For us, the results appear on the first day. It’s evident that this way works much better than the old way. Work does flow, and it’s easier to perform. The quality of the work is quickly improved and becomes consistent. Early trouble is always related to the in-process work that was started the old way, but once this stuff is delivered, the process results jump another notch.
What are the results after the first few months? The biggest and most immediate impact is cycle time. We started at around 14 days, and by month three, it dropped to 6.1 days. Our throughput of vehicles jumped slightly but to date remains close to prior results. This isn’t due to our ability to produce more but lack of volume. Although our delivery performance is great, it takes time to build the volume.
Profitability? Today, it’s more than 100 percent of its pre-kaizen results, but that’s not saying much. We’re still at a break-even level (including our changeover costs), but we’re poised to generate some great nets as volume builds.
Next time, we’ll discuss the roadblocks we encountered and the solutions we created to get around them.
Contributing editor John Sweigart is a principal partner in The Body Shop @ (www.thebodyshop-at.com). Along with his business partner, Brad Sullivan, they own and operate collision repair shops inside new car dealerships, as well as consult to the industry. Sweigart has spent 21 years in the collision repair industry and has done everything from being an independent shop owner to a dealership shop manager to a store, regional and, ultimately, national director of operations for Sterling Collision Centers. Both Sweigart and Sullivan have worked closely with former manufacturing executives from Federal-Mogul, Morton Thiokol and Pratt & Whitney in understanding and implementing the principles of the Toyota Production System. You can e-mail Sweigart at [email protected].