As the rest of the modern civilized world moves further and further into the "Information Age," the collision repair industry is still, for the most part, stuck in a "Pre-Industrial Age."
You may remember this Information Age starting out slowly, with the introduction of items such as fax machines and computerized estimating systems. Now, however, it’s coming at lightning speed — thanks to e-mail, wide Internet access, ISDN connections, DSL connections, satellite linking, insurer file uploading and downloading, electronic commerce and Y2K management systems.
For the most part, this information technology has affected front-office operations more than all other departments combined — even though, today, we have spraybooths that can provide management with the status of the booth and the expected completion time of the vehicle being refinished. We also have measuring systems that connect through a modem for technical assistance and even perform training.
So why are we still stuck in a Pre-Industrial Age?
Because we haven’t dedicated our efforts to change the fundamental approach to repairing vehicles. We’ve certainly updated to advanced equipment, but the process of how the vehicle is repaired today — in stalls— isn’t much different than when carriage builders opened their first body shops.
Why is this the case? Until recently, there hasn’t been a force great enough to cause us to change. I’m a firm believer in the notion that change doesn’t just happen unless something influences it. I’ve heard others say, "Most people don’t change because the light bulb inside lights up, but because the heat burns them."
That seems to be true in our industry, but why?
As I’ve mentioned in many other articles, most of this industry’s business owners are technicians at heart. This is normally true for any service business, but this technician trait blocks us from seeing many advancements as positive changes. Many seminars have worked to advance the technician owner into a manager or CEO of his organization. But now we must look at the industrialization of the repair process, which requires process engineering skills and the ability to see future outcomes — entrepreneurial skills at the highest level.
This change is necessary and inevitable because, as in most industries, it’s a natural evolution. Our industry has been exempt, for the most part, because the operations we perform have been so varied until fairly recently and have required a special skill level. For a long time, the skills needed to perform repair operations were "craftsman skills" rather than repetitive skills. I’m not saying that repairs today are easier or require no skill; on the contrary, many operations require a higher skill. What I am saying is that the skills will just be utilized differently.
For many years, this industry has used a "job shop" approach to the repair process. This approach requires high craftsman skills for most employees since an entire job was being performed by one individual. Since these "combination men" performed the entire repair and refinishing operation, little unskilled help was needed — but the efficiency of the repair suffered.
For the most part, the industry has moved from "combination men" to more division of labor techniques. Operations of metal, paint, mechanical and structural labor may be performed by different technicians who specialize in that specific area of the repair. This is the first evolutionary step toward industrialization, but there’s much more to come.
The Origins of Industrialization
Way back in 1798, Eli Whitney developed a new gun for the government that used interchangeable parts, the first of its kind. Along with the product, he also developed a unique process to produce these guns: the first assembly line. He was able to have "specialists" produce the parts and assemble them in a specific sequence to produce the final product. This began to revolutionize manufacturing industries.
More than a century later, Henry Ford applied these ideas to develop the first moving automobile assembly line, which completely changed the automobile industry. This concept allowed standardized parts to be assembled by lesser-skilled workers and lowered the production time of a vehicle from several days to 12 hours or less. In 1908, Ford’s company produced fewer than 200,000 vehicles. By 1927, assembly-line workers produced 15 million.
What does all this have to do with the collision repair industry?
For the last few years, we’ve heard about and seen consolidation within our industry. One point that’s been emphasized over and over is the intention of many of these consolidators to become low-cost, high-volume, profitable repair providers. Some technicians, managers and shop owners say it isn’t possible — but they’re wrong. The Model T initially retailed for more than $2,000 with job-shop production methods. Once the moving assembly line was in full swing, the price dropped to less than $400 (sold in Sears catalogs). Do you think because the price was cheaper, Henry Ford made less money than before?
Today, robotics and computerized, moving assembly lines make automobile production a science. Quality control is at its highest level ever. Standard, low-cost vehicles today have better welds, panel fit and paint finishes than most luxury cars did just a few decades ago.
But quality and speed have little to do with each other if proper processes aren’t implemented. This is what W. Edward Deming taught the Japanese when their product quality was considered inferior to that of U.S. products. Now, however, their products are often preferred by consumers because, even though they’re produced at great volume, the quality is evident. Can you say Lexus or Infiniti?
These same concepts of developing industrialized production methods have been applied directly to other industries, too. In 1953, Ray Kroc left his job as a milkshake-machine salesman because he saw the future of a "fast food" process begun by the McDonald brothers in California. Today, the system is taught in books and business schools all over the world, and McDonald’s now numbers more than 20,000 stores in more than 90 countries, averaging more than 29 million customers each day, with a new store opening every seven hours.
I realize we’re not manufacturing new automobiles, guns or even hamburgers, but the industrialized process applies to automobile repairs, too. We’ve gone so far as specialization in departments — paint, metal, mechanical — but we can go even further. By analyzing the operations performed on the automobile, we can easily see that refinishing, metal repair, and mechanical and structural work can be broken down in subcategories.
It’s easy to see that refinishing can be divided into stages:
• Prepping (cleaning, taping, sanding, priming and blocking, if needed);
• Spraying (mixing the product, final prep, product application); and
• Pre-detailing (de-taping/masking, finesse finishing).
Each of these stages has sub-operations, which can be broken down for a specialist in a high-volume setting, improving production and quality. It’s normally easier for everyone to see this potential for refinishing because there are less variables at this point in the process; the process flows similarly for a single part or a complete refinish job. Even other refinishing-related operations — such as color verification, parts jambing, booth setup and striping — can all be divided among specialists.
If each sub-department task was performed by a separate individual, the skill training would become more focused and the new technician could be less skilled since he wouldn’t perform all areas of the repair. The technician would learn and become proficient faster, which would surely translate into better performance and quality.
In many ways, this department has surpassed the collision side of the repair for specialization. Today, it’s common to have transmission, electrical, drive-train, driveability, suspension, brakes, exhaust and general service specialists. In fact, many have created their own assembly-line process, while transmission shops and quick oil-change facilities have used the concepts of manufacturing giants like Ford and Kroc. These processes weren’t implemented just because of the production gains, but also because of necessity. It was almost impossible for one person to be skilled enough to do the entire process. Plus, the higher-skilled technicians didn’t need to "waste" their time on tasks that didn’t require their skills. (Sound familiar?)
There’s little argument that this area can be easily refined. Putting vehicles onto the pulling system, attaching the pinchweld clamps on most vehicles, setting up the measuring system, taking the measurements, taking the measuring system down and removing the vehicle from the pulling system doesn’t require a highly skilled technician. In fact, the most effective use of the highly skilled technician in this department is to analyze the measuring data (especially if computerized printouts are performed), make the pulls and verify the final results.
These concepts are being used by other service industries we’re all familiar with — medical and dental, for example. X-ray technicians take the X-rays and a skilled physician reads them; a nurse or assistant takes your blood pressure, temperature and heart beat, and the doctor then analyzes the readings and performs the examination further to prescribe treatment (the repair plan). Surgeons use this same system as well, but since we’re normally under sedation, it’s hard to recognize.
Today’s dentists employ a system that maximizes their time and skills through division of labor — a system we can all learn from. While you’re in the dentist’s chair, someone cleans your teeth, someone else takes X-rays and someone else prepares the instruments and filling materials. Then, when the dentist’s skills are needed, he enters the picture. After his skills are completed, he’s off to the next patient. Implementing this concept could benefit the structural repair department greatly.
The metal-repair department generally offers more challenges for industrialization, since so many variables exist. But don’t believe it’s not possible. Many before myself have promoted a "lane concept" of categorized repairs (see diagram on pg. 96). Each category represents a specific severity of repair. In these lanes, the vehicle moves forward through the repair process, while technicians move to the vehicle to perform their specialized tasks. The key is to have an area to handle the "non-categorized" repairs until they can fit into a category. Then the process can flow.
The first stage of this concept can simply identify the sub-categories for metal repair. Welding, assembly, metal straightening, plastic-filler application, bumper repair and panel adjustments can all be performed by a specialist. This concept doesn’t end here since many more operations can be specialized.
The greatest challenge for our industry to implement these industrialized processes is not the shop requirements but, rather, the human resources.
There’s no doubt our industry is lacking a new pool of highly skilled technicians. The vocational system, or even an apprentice system, won’t be able to handle the demands. So if the need can’t be satisfied, change the need.
Albert Einstein had an interesting definition for insanity: doing the same thing over and over and expecting a different result. If we were to fix vehicles the same way with the same repair model, it would be insane to expect different results. But getting everyone to see this will be a challenge.
The keys to moving toward industrialization will be the development of an internal training department, good recruiting programs, and career path and evaluation processes that encourage a different work force to enter the new "re-manufacturing" automobile repair business — and a willingness to let go of the inner "technician" constraints we place on ourselves.
(Technicians, don’t be alarmed. Highly skilled techs will still be needed, but they’ll be a smaller percentage of the whole production staff. A clear understanding of your best time and skill utilization will have to be identified and probably trained, since you’ve never had that opportunity so far.)
Let’s look at some examples of how to implement the industrialization concept in the refinishing, metal and structural areas of today’s collision repair shop:
• Refinishing department — Today, it’s common for the most skilled refinishing technician to be spraying vehicles in the booth while the lower skilled technicians are prepping. But what’s the most important task involved in refinishing? You should recognize that prepping "makes the job." Bad prep means comebacks, re-dos and loss of production time. It’ll be imperative that a lower skilled individual is trained to apply the product. (It’s done in many other industries that apply coatings, so why not ours?) The important factor to understand is how the highly skilled technician has evolved as a manager of the department. His primary role is to make sure the preparation is on target and the spraying is continuous. He’s also the problem solver when needed.
• Structural/metal department — An example using the structural/metal department is the welding of panels. Welding is repetitive-based and is not a task for highly skilled craftsman. It’s evident that a large percentage of technicians don’t weld properly, but this is typically due to receiving little formalized training and operations being practiced infrequently.
If you don’t believe me, check with I-CAR for the pass/fail rate of a simple welding qualification test they’ve provided our industry with for years. Secretaries and managers who have never worked on a vehicle have passed the test, while highly skilled technicians fail.
What’s the answer? A number of high school and college welding programs can provide a technician — at a lower cost and from a different work-force pool — who welds circles around most collision technicians. He may not be a better technician, but he’s had formalized, repetitive training and welding is "what he does."
In an assembly-line process, structural panels would be set and measured, probably by or supervised by a higher skilled technician. The preparation would be performed by someone who specializes in weld preparation and cleanup, which could include corrosion resistance, priming and sealing. Then the welder would come in to perform the welds.
Deming had a statement that must be understood for this type of process management to be successful: "You cannot inspect quality into a product. … You must build it into the process."
For example, what generally causes bad welds? Poor preparation, improper fit, incorrect welding-machine setups and the skill of the welder. If one individual is responsible for all steps, how do you know it was done properly? Can you inspect the welds after the primer, corrosion protection and sealers are applied? Does someone inspect the weld after it’s done? What do you do if it’s not correct?
If each process is broken down into smaller, identifiable tasks performed by specialized technicians, the next step isn’t performed unless each prior task meets a set standard. But to accomplish this, everyone must understand the standard, believe in the standard and be trained to achieve the standard.
Such assembly-line concepts work more than in theory. In Japan and other areas of the world, assembly lines have already been implemented in the auto repair industry. The process can produce a large volume of work in an incredibly short time frame — a typical $3,000 repair (in United States standards) can be returned to the owner within 24 hours. Amazing!
With that volume potential, the profitability in dollars is staggering. It won’t normally increase gross-profit percentages, but you don’t spend percentages anyway, do you?
Moving from a job-shop system to an assembly-line approach also requires a new set of production benchmarks. The game has changed, and some of the old ideas no longer apply. One of the key changes relates to gross profit. This understanding of production boils down to a very basic question: Would you rather have 45 percent gross profit on $2 million or 35 percent gross profit on $5 million? What if the latter was able to be produced in 25 to 40 percent fewer actual clock hours, have very little re-do or comeback claims, and be performed with a majority of staff who aren’t currently involved in our industry?
Moving from what’s done now to the industrialized process will be difficult for some and, possibly, impossible for a few. However, the productivity gains and the bottom line profit will justify these changes. The work force will be integrated with staff members who haven’t been involved in our industry in the past and who will provide a stable supply of employees. The training requirements will be monumental, but the rewards will be quantifiable.
As a "technician at heart," you may find it difficult to see an "industrialized" future, but your entrepreneurial spirit must help you see past these obstacles. It’s only a matter of time before other individuals and organizations blaze the trail. Will you take part in the collision repair industry’s industrial revolution? Or will you, and your shop, be left behind?
Contributing editor Tony Passwater is president of AEII, a consulting, training and system-development company. He’s been in the industry for more than 27 years; has been a collision repair facility owner, vocational educator and I-CAR international Instructor; and has taught seminars across North America, Korea and China. He can be contacted at (317) 290-0611, ext. 101, or at ([email protected]).Visit his Web site at www.aeii.net for more information.