Cash flow is king in any business. But car flow and cycle time are the powers behind the throne – and the keys to success – in the collision repair business.
Multi-shop operations need to distribute vehicles evenly throughout their networks to assure that one shop doesn’t get overloaded while another sits idle. That assures that all work flows smoothly, job quality remains solid and not rushed, and customer expectations get met.
“We load level every day,” says Darrell Amberson, vice president of operations at LaMettry’s Auto Body, an eight-store operation in St. Paul and Minneapolis. “We do load leveling so frequently that it’s second nature to us. It’s a nice tool whenever you add a shop, even if you just go from one to two. But don’t get carried away. You don’t have to do it every day. Use it, but minimize it.”
In the case of Dominic DelGiorno, vice president/operations manager for Keenan Auto Body, Clifton Heights, Pa., he takes a look at WIP (work in progress) every morning to see how many of their dozen shops are working at or near capacity. Any load leveling happens first thing in the morning – before the shop has a chance to blueprint a new job. All the shops can see what’s being moved, and nobody invests time in starting a job they won’t finish.
“Load leveling keeps a job out of the hands of the competition and keeps your technicians busy,” says Steve Theobald, co-owner/district manager of CARSTAR Cincinnati. With his brother and sister, they have nine shops in an 80-mile radius. “When a store is overloaded, managers have orders to sell the job and push the car out.”
Craig Camacho, marketing director for Keenan, says load leveling allowed them to handle a vicious hail storm that came through the area of one of their shops two years ago. There was no way they were going to walk away from that business.
“That hail storm represented $300,000 in revenue,” he says.
Adds Camacho, “You will never hear from us that we can’t look at a car for three or four days.” With load leveling, they even out the flow and never have a backlog. Since they cover a wide region – there are 84 miles between two of their more distant shops – they often see variation in workload.
Making It Work
LaMettry’s Auto Body offers, in some circumstances, one-day service. That puts a lot of pressure on the system. The individual shop’s general manager makes the decision to move a vehicle. “It’s their call,” Amberson says.
The first step is to notify the call center. Once the call center is aware of how busy a shop is, they’ll try to send cars to less-busy shops.
Keenan operates much the same way. They recently acquired two shops in the Chester County area, which have only three or four DRPs (their typical shop handles eight or nine).
“So, it’s a target for us to get work there,” Camacho says. “But wherever it’s slow, we try to move the vehicles there so we can better meet customer expectations.”
But not all customers like the idea that their car will be moved.
“Fixing a car is not like sending out your drycleaning where it’s picked up at one place and cleaned at another,” Theobald says. “People have the mindset that they do not want their vehicle moved.”
Shop management can be uncomfortable with moving vehicles around, too. For the most part, managers are good at seeing that a situation is becoming crowded and will refer a vehicle on to another shop. But not always. Some are reluctant to send a vehicle down the road to a sister shop.
“Other managers see that and then they’re not willing to share,” Camacho says.
If DelGiorno sees that happening, he steps in and assures the whole company is working efficiently.
Theobald says it comes down to compensating everyone properly, from the estimators to the managers. Keep in mind that one shop sold the job but another has the parts, paint, materials and other items on its ledger.
On load-leveled jobs, Theobald says, “Our estimators, who are incentivized, get a little kicker, too, for selling the job.”
CARSTAR Cincinnati works to assure that managers are working together. Since all jobs eventually show up on the yearly P&L statements, they work out the difference between the customer paying for the job at the selling shop and the store doing the repairs and footing the bill for time and materials.
Everyone emphasized the need for harmony between and among shops. As a business adds locations, load leveling becomes vital.
“There are growing pains. You will have shops that are constantly busy and ones that lag,” Camacho says.
“We won’t [move a customer’s car] without the customer’s approval,” Amberson says. However, he finds that most customers are more concerned about getting the job expedited than where the actual work is done.
Theobald will start making phone calls to customers as soon as he realizes a shop is overloaded.
“When we ask if we can move their vehicle to another facility, we emphasize that they’re getting the same certified technicians, the same warranty and the same ownership,” he says. “We guarantee their car is not being sent to a hole-in-the-wall shop and that we will stand behind our work. We always get the customer’s blessing.”
On the other hand, Keenan will not even mention load leveling to a customer. In some cases, however, their records might show that the customer works near a different shop. Then, moving the vehicle is presented to the customer as a convenience to them since they can pick their vehicle up right after work.
Keenan brought on load leveling when they had four shops. For a while, they kept one shop as a heavy wreck shop, which allowed them to keep production going at other shops.
“We do it on the back end and it’s seamless,” Camacho says. “If you bring a car to Clifton Heights and they’re close to capacity and we want to send it to another shop 40 miles away, the customer rarely is told.” The vehicle is simply flat-bedded to the slower spot.
The rule of thumb is that cars are always brought back to the shop where they were dropped off.
“We want to make it as seamless as possible,” says Camacho. “As long as it is done properly, what does it matter to the customer where the job is done?”
One deal-breaker with load leveling – both for the customer and insurer – is a job that requires a shop with OE certification. For LaMettry’s, only one shop is qualified to do major Audi and Porsche work.
“Anything of significance, we’ll send there,” Amberson says. However, they cannot and will not move a Porsche to another non-certified
“Not every insurance company will allow you to load level,” Camacho says. “But 90 percent of insurance companies have no problem with load leveling and look at it as a benefit to their customers.”
If there is some minor resistance, Keenan always lets the insurance company know that a vehicle will be repaired at another shop.
In Cincinnati, Theobald finds that more than a few insurance companies object to having a client’s vehicle moved to another shop.
“A lot of insurance companies won’t let us move cars,” he says.
Reinspectors and other insurance people have goals to meet, and most are happy with any process that helps improve cycle time. No matter what the current buzzword is, “cycle time” is always the flavor of the week, Camacho finds.
Says Amberson, “I’m not aware of any insurer that’s opposed to load leveling as long as it’s within the confines of the DRP relationship.”
The only resistance Amberson has ever seen is when the insurance company has a problem moving a file from one place to another.
“They see it as an option to help expedite cars,” he continues.
A shop would get pushback if they tried to send a car to another shop that is a non-DRP operation.
Tow to Tow
While everyone agrees that load leveling is a nice scenario, Amberson warns that a shop can end up moving a lot of cars. That gets expensive both in terms of time and money. The best case is where a customer can drop off the vehicle at a slower shop.
Theobald flat-beds all cars that they move. They used to have two trucks but now have only one.
“We only tow within our own business – we don’t do any outside work,” he says. “But we keep that one truck pretty busy.”
Keenan moves every vehicle on a flat bed and doesn’t put a distance limit on moving a car. Nor do they have a price cap on the job value.
“It’s all about getting the vehicle to a shop that needs work and keeping the customer happy,” Camacho says.
With the number of all-wheel drive and low-clearance vehicles on the market today, a two-wheel lift is just not practical. In some cases, it’s easier to farm out towing.
“We do not tow cars (ourselves),” Amberson says. Rather, they have a wholesale rate with companies that do the job for them.
Bumps in the Road
“The hand-off of information is the biggest potential pitfall you’ll encounter,” Amberson says.
Often, a customer will bring in a car for repairs and mention to the originating shop that there’s a spot on the trunk he wants brush touched. The car moves to another location, and the message isn’t passed along or missed when the tech focuses on the larger repair. And then, of course, the first thing the customer will notice is not the nice finish on the quarter panel but the missed spot job on the trunk.
Amberson recounts the case of an 8-year-old Nissan, already dinged up when it came into the shop. Although the repair was fine, the customer complained about some fine scratches and little chips. “We agreed to doll it up for free with a professional detail,” he says. The second shop did not get the message that this was an especially picky customer, and the result was that a less-than-perfect buff job left some dry polish in the fine scratches – making the customer even more upset. If the job had been left with the originating shop, that probably would not have happened.
Another downside to load leveling is that it takes time.
“You would think it takes an hour to move a car to another shop, but it shoots half a day,” Amberson says.
First, the shop obtains permissions. Then, they have to do the paperwork and send it with the car. Then, the car is moved. At the receiving end, there’s more paperwork before the vehicle actually sees the first steps to repair. Tick-tock, tick-tock.
In some cases, load leveling can be a bit of a danger signal. While extending hours might work in the short term to increase shop time, “Over the longer term, if you have a shop that has a hard time keeping up, you need to ramp up staff,” Amberson says.
However, he adds, load leveling is great for improving cycle time. “The clock on cycle time starts when the vehicle is dropped off,” Amberson says.
Sometimes the nitpicking starts, too. Theobald says it’s important to be sure there are no issues with gluing versus clipping or shimming a bumper. “When the repairing store sends a vehicle to the delivering store, sometimes they pick the job to death. Don’t give them a reason to nitpick.”
While he admits there always will be issues, he says that they need to be minimized. “Most of all, ensure there are no issues from the customer.”
Curt Harler is a Cleveland-based freelancer specializing in the auto, technology and environmental areas. He can be reached at [email protected].