tive staffing ratios (total production staff to administrative staff).
This list isn’t exhaustive, but you get the picture. Why all this analysis? Because, from the beginning, we’ve placed ourselves in a model that’s less than ideal.
Did Henry Ford buy a building and then try to make his equipment, products and manufacturing system "fit"? No way. First, you design the system and develop an understanding of your equipment and product needs. Then you design the physical plant to house it all. Unfortunately in our world, we generally start making concessions as soon as we buy or lease a building.
I’m not saying there aren’t any existing buildings available that could meet your requirements. But when you accept things you shouldn’t, it forces you to use the ratios mentioned above to see how poorly you rate when compared to others. If the plant had been designed properly from the beginning, the ratios would be designed in for maximum efficiency.
Many industry members besides myself have visualized very large plants ¾
larger than 100,000 square feet and built in industrialized areas of metropolitan cities ¾
that could output volumes of repairs at incredible rates. But one important point often overlooked is that these "mega" shops can’t simply be larger versions of the shops we have today. If they were, the daily problems we suffer from now would be magnified five, 10, even 20-fold. If you’re currently in a high-volume operation, do you believe you or your staff could survive this increased stress? On the contrary, it would be suicidal.
Unfortunately, I’ve seen this happen many times when shops grow beyond their "systems" and just get bigger. While I was visiting a client in the Southeast United States, we discussed some of his shop’s organization difficulties. This plant was large – more than 40,000 square feet – and was targeted to do more than $5 million in sales. While I was there, a car was dropped off by a customer and was in the shop for more than 30 days. Why? No one knew it was there to be repaired. When the customer came back to inquire about his car, no one could locate a repair order or the keys. I hope you’re asking the same thing I did: "How can this happen?" If you simply get bigger without altering your repair system, this situation isn’t so unbelievable.
Design It Right
I have a number of clients who are renovating or "greenfielding" (building a new facility from the ground up), and I can attest that our industry lacks personnel who analyze true plant requirements from an architectural perspective. Many consultants still design workflow and buildings the way they did 15 years ago, but the model has changed – and it will change again.
What you need to understand is that it all starts with the building. Anything overlooked here requires concessions be made later. Redesigning to accommodate your needs may not increase the cost significantly during the design/building stage, but rest assured, it’ll increase your "costs" during operation.
For example, as a shop owner, you should consider that SUVs are very popular – big vehicles are back in style. This changes space requirements right off the bat, and a lot of shop layouts and designs I’ve recently reviewed don’t allot for the additional space required to repair large vehicles, like a Dodge Ram truck. Along with added space to work on these vehicles comes space to handle the parts processing of these vehicles.
Parts, Parts and More Parts
Many industry leaders believe the ratio of parts replacement to the total sales is going to increase by up to 75 percent (including materials). This increase comes from the vehicle design changes, which have made parts and assemblies more "module" for easy replacement when they’re damaged beyond repair. Other key factors are:
- Cycle time can be reduced by replacing parts that could have been straightened (bolt-on parts especially). With increasing pressure to meet lower cycle-time benchmarks, it’ll be necessary to increase the replacement ratio whenever possible.
- The lack of skilled technicians will be less of a problem if a lower-skilled work force was available to replace panels when necessary.
- Since it’s probable that flat-rate times will be reduced by the information providers over the next few years, labor income will decrease, which will also affect the ratio balance.
- The total cost of parts will in-crease, changing the ratio.
All these factors require us to process parts more efficiently than ever. Having parts pile up in a cramped parts room or an out-of-the-way corner of the shop ¾
with some on parts carts, some in the trunks and others in back seats and on wall racks ¾
isn’t efficient. I believe parts handling will be a future bottleneck standing in the way of cycle time reduction. But it really shouldn’t be.
It won’t be long before all parts – OEM, aftermarket and salvage – will be shipped within 24 hours of ordering through Internet-based systems. This kind of distribution requires a shop designed to handle a new system of parts processing. Currently, we’re nowhere close to the level needed.
When such a time comes, it’s likely that parts will be stored and transferred to the correct workstation on an overhead, mechanical rack system, like something used at the dry cleaners. Parts handling systems may even resemble chair lifts you find at the ski slopes, computer controlled to go to the vehicle upon demand. Instead of spraying parts in the main booths or prep decks, painters may utilize a track system installed along a back wall, with a long prep deck behind a curtain. Parts enter at one end, get painted and then exit at the other end.
Whatever systems the future brings, one thing is clear: Shops that process parts most effectively will reduce cycle times. Those that don’t will lose. My point? Design an adequate system into your facility now – not when parts boxes are piled everywhere and there’s no room for vehicles.
At a recent industry event, someone asked the audience, "Why does the government allow you to depreciate equipment?" The answer is because after it’s been depreciated, you’re suppose to buy more. By definition, depreciation is based on the "useful lifetime" of the equipment. Quite often, I see varying opinions on what constitutes "useful life." Every shop owner must realize that equipment is designed to make you more money. If it doesn’t, it’s a toy, not a tool. I’m not an equipment sales person, but I may sound like one in the next few paragraphs. The bottom line is buy what it takes to save time, which translates into money.
Unfortunately, this approach has been overused in our industry. If you added up all the time savings the latest gadgets offer, a vehicle could be completed the day before the date of the accident! Our response is to ignore or doubt such sales pitches – but we really should pay attention.
Let’s look at the paint department as an example. There are main tasks (stages) and sub-tasks of each main task (for a more detailed explanation, see "Industrializing the Industry," on pg. 92 in the November 1999 issue of BodyShop Business). These main tasks include prepping, spraying and pre-detailing. To analyze how industrialization could improve the paint area, consider the current average amount of time spent in each of these stages:
- Prepping (cleaning, taping, priming, drying and sanding): 1 to 4 hours.
- Spraying (final clean, mixing product, product application and drying): 1 to 2 hours.
- Pre-detail (de-taping/masking, finesse finishing): Less than 1 hour. Because prepping includes cleaning, taping, priming, drying and sanding, the next step is to analyze how long each of these sub-tasks takes:
- Cleaning (performed multiple times during this stage): 15 minutes.
- Taping (may be performed multiple times): 30 to 45 minutes.
- Priming (allowing proper flash times between coats): 15 to 20 minutes.
- Drying (variables may cause the range to increase): 45 minutes to 2 hours.
- Sanding (hopefully the metal man doesn’t need brought back in): 30 minutes to 1 hour.
Our goal is to lower the time spent on each sub-task to reduce the time spent on the overall main task. How do you accomplish this? With proper products, with equipment that reduces it in a cost effective manner and with procedures that utilize time the most effectively.
While examining the prepping sub-tasks, we discovered that the largest time thief is drying. Your goal, as an industrialist, is to reduce that time. But how? If you’re already thinking of the methods, products and equipment that can accomplish our goal, congratulate yourself. You’re thinking as an industrialist should. If, instead, you don’t worry about the time since a person can work on another vehicle while it’s drying, you have a long way to go to accept industrialization.
You’ve hopefully come up with ideas to reduce drying time, such as using infrared drying systems or other such systems that handle this operation at another stage more effectively. The key is that by cutting time in half (most systems will do much better), you’ll save a full hour of labor. If your technicians are 150 percent proficient, you’ll save an average of 1.5 times your labor rate on each job going through this stage.
Using $30 as the door rate, you’d see a $45 savings since the time saved would reduce your cycle time. And since this vehicle will be done an hour earlier, it allows the technician to produce another full hour of labor on another vehicle.
Those of you having trouble grasping industrialization may be thinking that as long as the technician works on another vehicle while the first one is drying, you accomplish the same result. You won’t. If you don’t reduce the time it takes to perform sub-tasks, the actual time it takes the first vehicle to move through the process (to the end of the assembly line) won’t change. And until it moves more quickly through the process, another vehicle can’t be in that space. Industrialization allows a straight-line process that can include multiple lines with multiple people in charge of each line, rather than one person running many lines.
If you complete five cars per day, your average savings is $225 per day (using the $45 savings example mentioned earlier). That means you could book an additional 7.5 hours of labor in the same day (5 jobs = 5 clock hours saved at 150 percent proficiency = 7.5 hours booked). What do you think that will do to your bottom line each month, even after you pay for the equipment?
I hope you’re now thinking as an industrialist and not like a typical shop owner. Don’t allow the "sticker shock" of a particular piece of equipment blind your ability to see its profit potential. The key is not to think you’re spending thousands of dollars for a piece of equipment, but that you’re making a monthly payment based on a projected volume.
Every six months or so, I’m sure you see your product reps. They claim to have the latest and greatest products available and, many times, they do. If you’re using a product that can be replaced with an improved version in the same line, I recommend switching.
Let’s look at the drying process again. If a new product will dry 30 minutes faster than the one you’re currently using and you can calculate a definite savings, buy it. If the product can be applied in less coats, do the math again and consider changing. Manufacturers are constantly improving their lines, and your shop can benefit from their advancements.
If you’re a creature of habit, the latest and greatest products may cause you to cringe. But look at them as a business person, not as a technician. For instance, why spray primer on repaired areas? Why not roll it on instead? Many shops have adapted to the new approach, and look at what it could save: There’s no overspray, so taping in minimal; it can be done anywhere and there’s less waste since there’s no spraying; and a lower skill level is required.
The Future Is Now
The pressure is on to find an improved way of doing business. I’ve read letters from many technicians and shop owners who are technicians at heart and are concerned about how bigger shops will lose the "personal" touch.
I simply don’t believe this is going to be true. I’ve worked with many shop owners and have put in systems that allow more customer contact, better customer service and higher professionalism than ever before.
The reason many shop owners associate getting bigger with poor customer service is because they don’t think outside of today’s business model. The truth is, we can’t do it the way we always have and simply increase shop space. We must industrialize the process so we can achieve the results our customers expect and the industry requires.
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.