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Time to Strategize

Many repairers still don’t truly comprehend the real purpose of ‘lean.’ Understanding that it’s simply a strategy and nothing more will go a long way toward beginning the process of implementation.

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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.

When the subject of “lean” comes up, the feedback I continually get from readers is, “Just show me what you do in your shops so I can do the same.” What this tells me is that the real purpose of transitioning a shop to lean manufacturing processes is still not understood by most, which is probably the reason that most people never make “lean” happen in their organizations. The truth is, if you don’t “get the joke” here, then you’ll only wind up frustrated and probably broke. So let’s back up a few steps and break this down.
   
What Lean Is and Isn’t

Lean is not a tool (like software) that makes things easier or better. Lean is not a belief system (like Buddhism) that, if followed, brings something better. Lean is simply a strategy.

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One of the very first slides presented to me on one of the first days I was introduced to the Toyota Production System, or “lean,” back in 1999 showed a simple quote that said: “The objective is to change the strategic process so that the customer is better served.”  It’s a simple sentence that I thought I understood but, like many lean things, it actually took years to understand. Looking back, however, I’ve realized that you can’t really go any further until you get this point – that lean is just a strategy of operating a business. Once you recognize that it’s a strategy you’re working with, the individual pieces start to make sense and can be used in their correct context. In fact, you’ll see that your product itself becomes nearly irrelevant … not a bad thing to understand in today’s uncertain economic climate that could force us all to find a new business in the not-too-distant future. 

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So, going back to the quote, if you’re going to change strategies, then it’s important to understand what strategy you have now. So what is the typical strategy in our industry? Well, everyone starts with the same goal, which is to make money. But let me add something to that, because holding up a convenience store is also a way to make money. The goal is to make money in a way that’s honorable. By that I mean it’s done in a way that provides good things for customers, employees, the community and society.

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From there, those of us in this business decided that fixing wrecked cars was how we were going to make that money. So we usually started at the shop and how it should look: how big it should be, where it should be, how it was going to be laid out and what kind of equipment it needed. We got the whole concept of “the box” itself in our minds and developed that. Then we moved to things like the crew: how many of what, how will we pay them? What type of training should we have, who’s in the office, what does that look like? Next, it was marketing and that stuff. Do we participate in direct-repair programs, or do we not? Where do we get our work and how do we get it? Most of us have spent a great deal of time answering these questions until we’ve developed what became our business.

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Now, with the business in place, the focus moves to execution. How do we manage the business? What’s our management philosophy? How do we run this thing so we can generate that cash we want? There are many different business models out there to consider that combine what the shop looks like, what tools are used, who the employees are and how they’re managed, who the  customers are and so on. So we all sort of run the thing based on what we know and what we’ve built. In many cases, we try to stay on top of trends and new things that may help us, and we may even implement some of those things. But for the most part, the majority of our time is now spent managing.

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It’s this system we’ve designed and built and our ability to make it work well that leads to the results we’ve been after: honorable cash. Our strategy is then to manage this thing well and execute it better than the rest, and we should get to that goal. So our days are spent addressing issues, dealing with problems, directing the activities of our people (at whatever level of control you deem necessary) and so on. It boils down to this: The better-run operations deliver the better results. It comes down to having a good machine and managing it well, which is the strategy of most businesses.

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Something’s Different Today

So most of you (at least those of you who are willing to spend the time to read this) are the type who are continually focused on doing the right things for your business every day, and you execute this thing you’ve built with passion and are serious about being great. Well … how’s it going? Seriously. Is your strategy working? I know that it used to work in this industry. It wasn’t that long ago that good profits were being made by many. Even the half-assed hammerheads were making money. But something’s different today. There aren’t as many wrecks out there to fix. Insurers are squeezing the hell out of us for pricing and asking us to perform more and more of their claims functions. Everything’s getting totaled. Consumers are losing loyalty to insurers and therefore have little experience with them and their agents, taking their vehicles to wherever they’re “recommended.” You all know this, and it’s all true.

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So that old strategy of just managing  well has yielded all it can – it’s maxed out. The situation is such that the rate of improvement required to make it today is many times greater than the rate at which we can make things better. For example, if you were told that you need to shave two days off of your cycle time to remain on a program that yields 10 cars a month, you could probably use your management skills to make it happen. But if you were told that you need to have a one-day total cycle time on every claim, starting next week … it ain’t happening. You would need to either just give up or change your strategy.

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What’s clear today is we’re being pushed for more and more. It’s what many of the things you read in BodyShop Business are focused on: this company is now doing this to us, this one is telling us we need to do that, this one just pulled out all together, etc. Why? Call it greed, capitalism, evolution or whatever, but it’s everywhere. The rate at which consumers demand better stuff is insane. The collision repair industry hasn’t had to deal with a lot of this insatiable, “iPhone-esque” demand to date, but those days are over and, like $2 gas, they’re not coming back.

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The Strategy Is Established

So what strategy is required to win when, all of a sudden, the demand has changed from “Just do a nice job and we’ll pay you a good price” to “Do it better than you did yesterday and, by the way, do it better than that tomorrow”? Isn’t this the message we’re all hearing right now? Well, for one thing, the strategy better be aligned with the objective. By that I mean the new strategy should not be built completely around better execution of the way we work today but rather around continually bettering the way we work. That’s the new need, right? Better, better, better. Can you see the divergence now? One group is pulling hard to do the old thing very well, and one group with no attachment to any specific way at all is pulling hard to continually discover better ways.

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This is the lean strategy: “The objective is to change the strategic process so that the customer is better served.” The first part of this quote says change your strategy, and the second part says, by the way, make sure that your customers are at the center of your objective. It’s completely up to them to make you successful. That’s a point that’s impossible to deny. They have the cash that you’d like to keep. That’s why the first step in any lean implementation is to identify who your customer is and what specifically they want from you (also, knowing that they’ll want something more the next time). With that understanding, you can now decide if a strategy of continually improving your offering is one you want to pursue.

Still interested? OK then. If you’re on board, you must realize that you will now be building a completely different business model. Will it still fix cars? Sure, if you want it to. Or maybe the customer will lead you to do something different altogether. But your business strategy has changed from continually fixing cars to continually fixing (improving) the process of fixing cars. This basic understanding must exist in your mind if there’s any hope of you implementing lean in your business. Without this starting point, it just won’t make sense. This is why I continually tell people who visit our shops that “It doesn’t matter how we do things here. What matters is why we do them.” That’s what makes this stuff so hard. I cannot show you what to do, I can only tell you why you should do it and how you can use these tools to go about getting there.

So here’s the abridged version of the strategy: “Improvement in your offering to the customer needs to be continual, and if you focus on better and better, then your results have to be better as well.” Let me connect that leap by explaining two things. One, the customers want what they want. If you pay attention to them and hear what it is they’re asking for and then give them that stuff, they’ll be satisfied and give you their money … and maybe more of it later. Two, if you know what your customers want from the experience and change your process so that you only do the things required to deliver just that, then you’ll stop doing the things they don’t care about (the “waste”).

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If you remove the waste, you remove the cost associated with the waste. You also remove the roadblocks that slow the process of repairs, and the product goes through the process much faster. So as you get closer to giving your customers what they want, you also get the benefits of less cost. That’s the connection – continually improving customers’ experiences and continually improving your results. As quality improves, speed improves. As speed improves, cost improves and everyone wins.
  
Continual Improvement

How specifically do you apply continual improvement? I’ve written about that many times over the last few years, and you can go back and read all the details by clicking on “Lean” under “Business Editorial” in the left-hand navigation menu on www.bodyshopbusiness.com. But, in a nutshell, it starts with the customer: identifying who they are, what they want and what they value. There’s no wrong answer here; it’s your business, so you decide whose money you want.

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The next step is to map out and understand in great detail what you do today to produce this and see if what you do is really valuable in their eyes. Then, you rebuild the process so that you stop doing things that have no value to your customers and determine the things that do have more value. Those are really the first two fundamentals of “lean.”

It’s nothing earth-shattering, and it all makes sense unless you’re one of those people who thinks they know what the customer wants better than the customer does. But the strategy behind how you achieve the improvement is what makes this thing work, and is one of the toughest things to do.

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So here’s what people see but at the same time completely don’t see at all in a lean environment: the technique used to improve or execute the lean strategy, which is to flow work. Here’s how: If you take this newly determined set of tasks (determined by the customer), map out exactly how these tasks should be performed (create standard work for each) and line them up in the proper sequence in the proper amounts, you create this “machine-like” single process that you can start to “run.” It’s not that this machine will actually work well; in most cases, it will run like dirt. But because you’ve built this complete machine end to end, you can now identify what parts work well and what parts don’t. You can see the truth about your business process, without outside influences, so that you can now go fix the bad, broken and worn pieces.

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Looking at and fixing the machine becomes your singular focus – not fixing cars all day but fixing the process that fixes cars. This never ends. All you’re doing all day every day is looking at the process and improving it. The cars and all that don’t really matter. If you’re addressing the thing that delivers the cars, then you don’t need to worry about them because they’ll just sort of fix themselves. The good news is that you can never remove all the waste in any process, so you can always improve. The secret is in understanding that there is always a better way, and it’s now our job to continue to find it.

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The sad part is that very few will actually ever do this. It’s just too different. But those who do will simply blow the doors off the rest. What will most likely happen is that many new ideas will be generated by lean innovators, and others will simply copy their tools (to the extent that they apply). And that’s OK. In fact, it’s great because more and more lean tools will be out there for many to use. But remember this: The lean organizations will always be improving, so by the time others start using their tools, they’ll  already be off doing it a better way.

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If you’re interested in lean as the answer for your business, first know that it’s just a strategy, and a very different one at that. You’ve got to be ready to continually improve, otherwise you’ve missed the boat entirely. It’s not an easy change to make, but it can happen in a single minute. It’s solely your mind that has to change – the rest is pretty easy. As always, drop me a line if you need help getting started.

Contributing editor John Sweigart is a principal partner in The Body Shop @ (www.the bodyshop-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]

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