A few months back, we introduced you to the concept of SOPs in the article, “Standard Operating Procedures: Working Smarter, Not Harder.” The article enlisted the considerable experience and talents of some of our industry’s most progressive shop owners, who shared what they’ve learned about establishing and implementing SOPs.
|Standard Operating Procedures noun SOPs are detailed descriptions of specific tasks to be carried out in a particular operation. They’re clearly identified “best practices” within an organization. When written properly, SOPs reflect years of training, know-how, experience, learning, testing, research and discoveries. SOPs are not only the perfect training and development tool for mastering established jobs, but help to continuously improve the performance of your employees and operations.|
Because I gathered so much information while researching this topic, I quickly realized that one article couldn’t contain it all. This time around, we’ll take a closer look at DCR Systems, a Mentor, Ohio-based company that has virtually re-invented the collision repair process.
Inside DCR Systems
DCR Systems does everything by the book, with SOPs for each and every phase of their operations. But this didn’t happen overnight. In their prior life, the founders of DCR Systems – Michael Giarrizzo, Sr., Michael Giarrizzo, Jr. and sister Lauren Angie – ran JSI Collision Centers in two locations in the Cleveland, Ohio, market. They managed these centers the same way because they knew each other so well and had the same expectations. But when they added a third and then a fourth location, as they put it: “We were running out of family members.”
Inspired by Michael Gerber’s book, “The E-Myth Revisited,” they realized they needed to build their business to be saleable, even if they had no intention of selling it. So they began the process of documenting exactly what they did within their operations.
The objective of documenting their best practices was to ensure that every customer would get the same experience. In doing so, if they improved a process systemically, this would have a ripple effect throughout the organization in all locations and affect every customer the same way.
This came in handy when Sterling Autobody Centers came to their door with a purchase offer. They accepted, and the JSI team was retained to help Sterling standardize and systematize their operations company-wide. Michael Giarrizzo Jr. became Sterling’s Ohio regional director in ’99 and chief operating officer in 2001, where he led the operations of more than 1,300 people across 10 states and was the point person in growing the company to 61 stores, developing 22 new locations and transitioning 39 existing stores from traditional one-technician, multiple-car thinking to a true lean manufacturing process flow. Lauren Angie served as the regional director of Sterling’s Cleveland and Akron markets, managed a staff of 150 and also became schooled in lean manufacturing principles.
Sterling was acquired in May of 2001 by Allstate Insurance Company. Michael Giarrizzo, Jr. continued to run Sterling for another 2 1/2 years, leaving in November 2003. Giarrizzo Sr. left in early ’03, and sisters Lauren Angie and Jill Strauss left in June ’06.
In 2005, the Giarrizzo family – along with other former key members of Sterling’s leadership team – launched DCR Systems. DCR Systems provides automobile dealerships the opportunity to outsource the operation of their collision repair business. DCR has taken the concept of collision repair and developed a higher quality, more efficient operating model than the traditional collision repair model. The concept is based upon a patent-pending visual – a team-oriented system that marries specific tasks with the corresponding repair expertise, producing a repair flow that never stops once it’s put into motion. The results? Faster repair turnaround; higher-quality repairs; simple, predictable repair delivery; improved customer service; and enhanced customer satisfaction.
For this interview, the Giarrizzos and sister Lauren Angie were joined by David Dewalt, DCR’s region leader.
Q: What was it like before you implemented SOPs?
Mike Giarrizzo, Jr.: “In simple terms, in the before, you’re completely a victim of having to be reactive. In every situation, you’re forced to react. With SOPs in place, you can be proactive and deliver consistency on a customer-by-customer basis.”
Lauren Angie: “It also allows us to open a store and have it up and running exactly like the prior store and the rest of the company.”
David Dewalt: “Another area of SOPs is production, standardizing your material usages. In the old, traditional environments with multiple technicians, one guy likes this product and one guy likes another. We did our research and said, ‘This is how we want the car to be repaired with these types of materials, grits of sandpaper and so forth.’ So we have built consistency, not just in this location from one department to the next, but throughout our whole company. Every location is going to repair and move the vehicle through our process with that same consistency.”
Mike Giarrizzo, Jr.: “Before, the quality, process and methodology of the repair were driven solely by the likes, the experience and the preference of an
individual technician. Meaning, a car could and did come back in those days before SOPs and we said, ‘No, we couldn’t have done that.’ The reality is that a technician made his own decision on his methodology and materials. SOPs allow us to deliver a consistent product, not only around the application and methodology of a repair, but right down to the specific materials used. And, just as important, SOPs allow us to make systemic improvements.”
Lauren Angie: “The same thing happens on the administrative side. Because our SOPs are so consistent, an employee [from one of our other facilities] could walk in not knowing the inventory or the workload at that store and dive right in because everything is exactly the same. We receive the customers and write them up the same way, the car goes into our repair process the same way and customer communications happen exactly the same way.”
Mike Giarrizzo, Jr.: “Before SOPs – from a customer communications or, as we call it, a customer care standpoint – the customer was communicated with when the shop got to it. Versus today, with SOPs, the vehicle is disassembled and evaluated within 24 hours, and the customer gets a call with an explanation of not only what’s going to happen with his vehicle, but how long it will take.”
Q: How can a shop get started implementing SOPs?
Mike Giarrizzo, Jr.: “The first place to start is by documenting and mapping out what you do today. How do a customer and a vehicle move through your process from A to Z today?
“Start documenting, in writing, what you do and build the visuals around that. We work with a company called Select Tech, and they helped us pull all of our processes together in a very simple manner and with a high degree of technology. The end result was that all of our procedures are now available on CD and DVD in their simplest, most direct form.
“That’s really all it is – starting to document what you do and what you find out when you start that process. I involve all my people. You’ll have a lot of interesting discussions and debates about how things are done today.”
Lauren Angie: “If your focus is growth, then SOPs are an absolute necessity for expansion and consistency. The interesting thing is that some individual shops don’t have SOPs. They don’t take the time because they feel there’s no need. Everyone should have an operational process, whether it’s a one-store business or a 50-store business.”
Mike Giarrizzo, Jr.: “When I was consulting, I broke it down into four simple areas that you could build SOPs around. First and foremost is establishing and building what’s known as a 5S mentality, a housekeeping culture. By housekeeping culture, that doesn’t mean sweeping the floor; it means having a place for everything and everything in its place, from the front office to the detail department, and building SOPs around it. The 5S mentality is the Japanese/Toyota mentality around world-class working environments. … [See sidebar, ‘The 5S Mentality.’] Your housekeeping culture is either eroding or improving.
“Number two is building a definition of what a vehicle ready for production, without interruption, looks like. Consult your technicians. What does it need to look like? Once you have that definition, guess what? You’ll improve. I call it the industry’s greatest secret that everybody already knows. And that is, if you have the repair plan complete and accurate, and the parts, fasteners and raw materials are complete and accurate, this business gets a heck of a lot easier. So if the organization just forces itself to consult with its people and say, ‘Let’s build the definition’ and work toward the definition, its business will improve dramatically.
“The third thing is real-time administration, having the file or paperwork meet or beat the vehicle through the process.
“The fourth thing is building a quality verification process. Then, you need to build SOPs around quality verification inside the process. There are a number of ways of doing that, even in the traditional world.
“We recently took over the operations of Classic Toyota here in Mentor, Ohio, which followed the traditional model of collision repair. Using these four things and through tremendous operational leadership and tenacity, we put our systems and procedures in place in that store in just six weeks – and it continues to improve.
“Take these four things and start building some sort of structure or standard ways of operating, and they’ll dramatically help any collision repair organization anywhere. It’s that simple, but you almost have to take them one at a time.
“Without SOPs, you don’t know what you’re improving. You may improve or fix a specific situation, but if you don’t improve the process, the next customer won’t get the benefit.”
Q: You talk so openly about what you’re doing, as does Toyota about its “lean manufacturing” methods. Why?
Mike Giarrizzo, Jr.: “That’s why Toyota is coming over to the United States to show people what they do. They don’t think anybody will do it. They don’t think anybody will be disciplined enough to do it.”
Lauren Angie: “You can’t do it half way.”
Mike Giarrizzo, Jr.: “That is, quite frankly, why our doors are open to the industry. We realize how simple this is. But simple doesn’t mean easy, because it’s not. It’s extremely difficult to remain disciplined on a day-to-day, moment-to-moment, vehicle-to-vehicle, situation-by-situation basis. It has got to be an embedded culture. There’s no other way.
“A mentor of ours would say, ‘The thinking has to precede the doing.’ It’s key for everybody to understand why we do what we do. Once you understand that, you can’t help but embrace it because it makes all the sense in the world. In fact, it almost creates a situation where anything we’ve done in the past doesn’t make sense anymore.
“It’s really nothing more complicated than taking the collision repair process to a customer or somebody who has no experience in the industry and saying, ‘Map it out. How should this go?’ It would be pretty simple. They would say, ‘Get the vehicle in, diagnose it one time, gather all the parts and everything you need one time, and then go ahead and fix it.”
Mike Giarrizzo, Sr.: “I was out visiting a very successful independent repair shop in our area, and the owner then toured our facility. His comment to me was, ‘I wish I had the courage.’ That told me that he lets his guys do whatever they want to do, and he puts out the fires. Life goes on and they don’t improve. To change, you have to go in there and create discipline to give a better offering to the customer through a process. Everybody has their own comfort zones, and obviously his comfort zone is good enough for him to not worry about change.”
Q: How have experienced techs responded to DCR’s approach to repairing a vehicle?
Mike Giarrizzo, Jr.: “You have shop owners right now who are absolutely paranoid that they’re going to lose their best technician or manager to the organization up the street. They think that if they ruffle any feathers, they might scare their team away. We see this as the reason to support why we need to do what we do because there is a shortage of qualified people to run and operate a traditional collision repair shop. Why? Because all your technicians need to know A through Z and your managers need to have experience to deal with every fire ever faced in the industry.
“Traditional collision repair is a complicated process. There are heroic managers, and there are technicians who can do it all and know it all – but they’re few and far between. And guess what? In the next few years, it isn’t getting any better. In fact, it’s going to get tougher.
“So, by changing and becoming less dependent on that traditional mentality of what the workforce needs to look like opens up a whole new world for us when it comes to the people we can recruit. We use the Mentors At Work apprenticeship system to help us. We’re having some great success not only with attracting young folks into the industry, but attracting people outside the industry – and these people don’t carry the baggage that some in-the-industry people may have.
“We haven’t experienced a shortage at all. We’ve had individuals who resist, but collectively, the workforce is ready for change.”
Lauren Angie: “Walking in to Classic Toyota – the large, traditional store – as the new people leading the transition, we got resistance from some of the technicians there. We had technicians who literally walked away from us while we were talking, folded their arms and didn’t want to hear it. But then they started really looking into what we were doing, and they recognized that we completely focus on customers and them. The individual-type role playing is no longer there. We win on a team basis. They recognize that and they like it.”
Mike Giarrizzo, Jr.: “What was really powerful in our transition at Classic Toyota was that the core of that staff had been there for 20 years, in their own corners, in their own spots, driving their own individual paycheck. And we hit them with a radical change.
“But first, the leaders of this company rolled up their sleeves, scrubbed equipment, cleaned floors and re-organized. We set the example. We could have easily paid an outside company to come in and pressure wash the whole thing on a Saturday. But doing it this way, we opened a lot of eyes. Then we introduced the radical change and explained to them what we were going to do. We built the understanding of why it’s important.
“You continually reinforce to them that this certainly isn’t done in any way to damage them. The company is about the customer and its people. If you drive more and more value to the customer, we’re all going to win as a result.
“We use the example of throwing a football. If I’m terrible at it, Joe is OK but Tim is great, why would you want me throwing the football? So we build team environments and complementary skills, letting people figure out what they do best inside of that team environment, allowing them a lot of flexibility to move where they need to move – as long as they understand the process and understand what we’re trying to accomplish.”
Lauren Angie: “We walked into Classic Toyota, and there were people with 20 years of service whose three or four bays were their own shop, literally. They had 20 years of stuff piled up and stored. It took one thing to make the change, and that was simply courage.”
Dave Dewalt: “An interesting counterpoint was that when we went into Classic Toyota, their administrative side was begging to have a standardized way to help the customer. They were begging for help: ‘There has got to be a better way than the chaos we’re living in now!’ ”
Lauren Angie: “We built around a team environment. That’s what’s so different about traditional store staff. They’re rewarded with the wrong incentive, on an individual basis, and that doesn’t work.”
Q: How have SOPs affected your cycle time?
Mike Giarrizzo, Jr.: “Cycle time is a lagging indicator of the process. What SOPs are built around is an understanding of what our cycle time is about. The key is breaking it down into how long it takes to get the vehicle through our strategic disassembly repair plan. How long, on average, does it typically take to receive parts and verify them? How long does it take to go through the body repair process, to refinish, to reassembly and detailing, with quality inspection in between? How long does it typically take to do all that? From there, what’s the current capability of the facility? This then drives a whole understanding of what the cycle time will be and what we can do to accelerate it.
“If an organization says, ‘Our cycle time is eight days, 10 days or 14 days,’ that’s a point in time. If they get flooded with work, that cycle time will move. But using SOPs to understand what it really takes to get through our process allows us to move resources or to take action to expand capacity, first in our pre-op process because that’s the first response to customer demand. Then our process will respond to the pre-op demand and how many vehicles they’re putting into that ready state.
“SOPs allow us to respond to demand versus saying that our cycle time is 14 days or whatever. There isn’t an organization in the country that could make me believe that. It may be a 14-day average or whatever their average is over many months with a huge sample size. But it all depends on current inventory. In a traditional world, you don’t have a lot of opportunity to respond to that. You just react to it, which means that demand goes up, cycle time goes up; demand goes down, cycle time goes down.”
Q: What have SOPs done for DCR’s relationships with insurance companies?
Mike Giarrizzo, Jr.: “We learned in our prior life at JSI that insurance companies are risk management companies. Quite frankly, if you don’t have standard operating procedures that insurers believe in, you don’t have a chance of ever convincing them that your results will be consistent.
“When insurers understand that you have a standard way of operating, No. 1, it will at least give them a chance to buy into whatever results you’re showing them and that you have a chance of continuing to deliver those results. No. 2, without SOPs, you really have no way of putting a sustainable improvement into your business. You may fix a situation, but sustainable improvement means really changing that SOP in a way that every customer, going forward, gets the benefit of that change.
“I believe the insurance industry doesn’t think our industry can sustain its results. That doesn’t mean they don’t have good relationships with certain shops, but they look at our industry as a whole and they believe that the results are going to be widely varied. And that’s largely driven by the staff you have, not by the procedures you have.
“Most DRP relationships depend on a single point of contact, right? An insurer wants Joe to handle all their work. Their understanding is that there are no real standards in the shop, so if they can get Joe trained, they’ll place their faith in Joe.
“Or, ‘Let’s place our faith in DCR Systems where we know whether it’s Joe, Fred, Lauren, Michael, Dave, whoever, they handle things the same way.’ They know we share the same mentality regarding strategic disassembly and the repair plan. Even if it comes down to market competitiveness, the way you write that repair plan, if there’s a methodology you use – what you pursue first, second and third – and insurers understand that as part of your SOPs, you stand a lot better chance of them believing in what you’re doing.”
Q: DCR Systems is consistently hitting 100% positive CSI scores, or just a fraction under it. Tell me about that.
Dave Dewalt: “SOPs are really driving consistency, and if you take consistency and partner that with continuous improvement, you’ll just build and drive better quality and better processes. And that continuous improvement really comes from the entire group – the technician side, the administrative side, all the people involved in the organization.”
Mike Giarrizzo, Jr.: “It not only gives them the opportunity to participate, it requires them to.”
A Means to an End
SOPs aren’t just a buzzword
with DCR Systems. SOPs are their way of doing business and their way to direct each and every aspect of the repair process from one store to another. When you go from one location to another, the people may change, but the look and feel are exactly the same. The repair process is exactly the same. The consistency and quality of repairs are as close to identical as can be, and the company strives for continuous improvements in these already exceptional processes. DCR Systems is positioning itself to be a world-class company, one facility at a time.
With multiple locations, DCR Systems has consistent repair quality; nearly perfect CSI scores; few problems attracting, training and retaining their workforce; streamlined paperwork; enhanced relationships with insurance partners; and buy-in from the top down. Most importantly, they’re profitable.
And their door is open to anyone who’s interested in seeing their processes.
It takes courage to make a change this radical. In fact, it takes courage to even take the basic steps of mapping out what you do and seeking to improve that process.
From what I’ve gathered in my research on SOPs, no one regrets taking these steps toward consistency, quality and overall improvement. Instead of being held hostage by their employees like so many shops seem to be, management actually leads the charge, inspires their people and creates a team environment where everybody wins. And SOPs are the means to that end.
So the question is: How courageous are you?
BSB Contributing Editor Mark Claypool is the president and CEO of Mentors At Work. He has nearly 25 years of experience in the fields of workforce development, business education partnerships and apprenticeships. Claypool is the former executive director of the I-CAR Education Foundation and the National Auto Body Council (NABC). He was the director of development for SkillsUSA and still serves, on a volunteer basis, as the TeamUSA Leader for the WorldSkills Championships.
Establishing SOPs: a 4-Step Process
The 5S Mentality