Sales Volume:
$2.4 million this year (last year was $1.5 million)
Units Completed: 1,456
Average Repair Price: $1,648.35
Organization: Sub Chapter S Corporation
Employees: 18
Owners: Dave and Bill
Accounting: Marci
Problem: comebacks, lack of accountability, lack of controls/standards

In the last Shop Doc, we examined two shops that had much different volumes, but similar problems with financial accounting systems. This month, we’re going to look at a shop suffering from a lack of accountability for workmanship (as well as other duties) that results in comebacks. The comebacks, however, are simply a symptom of an underlying problem. Solve the real problem and you solve the comebacks.

The key, though, is discovering the real problem.

A Little Background …
Dave and Bill have been in business together for seven years. Both are in their early 30s and full of energy.

Dave and Bill serve completely different functions in the organization. Dave handles the office, estimating and general sales operations, while Bill handles the back end. Both Dave and Bill have a strong technical background: Dave was originally a painter, and Bill was a metal technician. In fact, until two years ago, Bill still did most of the structural repairs.

The business has been growing in leaps and bounds for the last three years. They expanded their operation into a new building three years ago, and the volume continues to rise – from just over $1 million the first year in the new building to $2.4 million last year.

The problem, as Dave and Bill explained it to me, was that it seemed the technicians and office staff – including the estimator – just didn’t seem to care much about getting it right the first time. No one seemed to check their work whether in the office or on the production floor, and they consistently had customers return – sometimes for the most embarrassing things.

This is common in many shops we’ve visited, and I assured them both that we certainly could improve or eliminate this problem. However, I would need to spend some time observing and asking questions to the staff.

Chatting with the Front-Office Staff
One challenge when going into an organization as a consultant is being able to see what’s “really” going on and not what everyone thinks you want to see. This in itself takes skill to determine which one is really being observed.

I decided to begin in the office and to ask the front-office staff a few questions. The estimator, Jim, had a few minutes, so we began discussing his workload and what kind of customers the facility normally attracted. Based on our discussion, I got the impression that Jim felt the customers were too demanding and made big deals out of little things. For example, he said that when a molding or nameplate wasn’t available when the vehicle was delivered, it seemed that the customers were much harder on them on the CSI report and found everything wrong with the vehicle. Also, it seemed that the technicians were never satisfied with the work order, so he constantly had to update the file and add supplements. He also felt the techs were way overpaid and that Bill always sided with them.

After this discussion, I talked with the front-desk person, Jill. She let me know that she really hated to deliver a vehicle because she knew those “guys” in the back will have screwed something up and that she’s going to take the heat until Jim, Dave or Bill takes over. I asked how often this happens and, to her, it seemed like every time. After going through the last two week’s deliveries, it turned out to be about one out of three vehicles.

After this, I moved to the parts manager, Tony. I asked him approximately how many orders are placed per vehicle on average. His first answer was “Lots – at least one or two per every day the vehicle is here.” Again, looking through the files for the last few weeks, it seemed to average around three to four orders. After this, I asked Tony why so many. His answer was quite pointed and directed to the estimator, the technicians and the “stupid” parts department that can’t get anything right.

Into the Production Department
After these information-gathering sessions, I decided to observe the production department. I could see that technicians were extremely busy, going over to different departments many times a day to rectify a problem or to install parts before delivery. I also noticed their work areas were as messy as I’ve ever seen. Everything was all over the floor. No parts carts, and no system where parts went. Any free floor space was fair game.

I spent a few minutes with one of the most experienced metal technicians, Zach, asking him questions about the quality of the work orders, the accuracy of parts and generally what he’d do to improve quality. As I expected him to say, Zach let me know that it was the estimators who were the problem. They don’t write good estimates, so the techs have to do their job for them on just about every single job by finding supplemental damages. And of course, the parts manager can’t ever get the right parts when needed, and the painter never gets his parts ready in time. He also added that the paint preppers can’t block anything out and are often too rushed to fix something or to put something together right then because the customer is picking up the vehicle in a few hours.

As I moved into the paint department, I noticed the painter and two preppers going over a repair job on a quarter panel by Zach, the same technician I was just talking to. Bill was also there, and I heard him say, “Just put three good coats of our primer filler on it, and it should be fine.” When Bill saw me, he headed back over to the metal department so I could talk to the painter, John.

I examined the quarter panel job that they were discussing and noticed that the filler wasn’t finished to 150 to 180 grit and seemed to be a little wavy in nature. The body line was definitely not correct, but close. And the paint wasn’t featheredged. I asked John about the standards for accepting jobs from the metal department. He laughed a little and told me that whatever comes to his department is looked at – and that they have Bill review the work almost every time. Most of the time, he said, the paint department takes care of it, but sometimes the metal technicians come over and block it out here since they need it featheredged and the primer on it to see the body lines.

I spent some time looking at some vehicles after they exited the booth. All in all, the finish was good, and they blended just about everything, so the match was also good. They had a few minor problems with dust particles, but the booth was maintained well.

As I watched the detailer, Paul, get a vehicle ready, I noticed that he had a very solid routine but didn’t do a final inspection of the work performed. When I asked whether he inspects the work before delivery, he said that last year he did, but now he just doesn’t have time and when he finds something that’s very obvious, everyone just gets mad at him.

Getting a Commitment from the Owners
After all this, you may or may not be able to relate. The problems with Dave’s and Bill’s operation were numerous, but what’s the real, underlying problem? In these cases, it’s often not just one thing or even the problem the client thinks it is. Certainly comebacks aren’t the problem. It’s much deeper than that. Lack of accountability and not doing it right the first time are a result of a lack of controls in a business for enough time that people “give up.”

The first thing Dave, Bill and I had to discuss was their commitment to fix this. The culture of the shop had to change or the problems would never go away. We discussed how the entire staff must function as a team and how each person is going to have customers they must be able to satisfy. And these customers are more than the vehicle owner or work provider. They’re also the other staff members who they’re handing the customer vehicle over to in the process of repairs.

We scheduled my next visit in two weeks. At that time, we’d have a staff session during an extended lunch at a restaurant down the street in a private meeting room.

Meeting with the Staff
The meeting was well-planned, and lunch was provided. Everyone but Dave, Bill and Marci were there (someone had to hold down the fort). I was to have them for two hours after eating lunch.

We started out pretty cautiously because no one really knew what this was all about. The trust required to make this work is critical. We started out explaining how the company is growing and that any company that has growth like this can have growing pains. To lessen this, we have to understand our core company values of why we’re all here.

From this discussion, we had everyone list what the company’s core values must be to remain competitive and a leader in the market. We then went to which of these is most important to them. From this we arrived at a few core company values:

• Be customer focused. Please the customer. Customer satisfaction.
• Do business with honesty and integrity.
• Perform quality workmanship.
• Perform timely repairs.
• Have a safe working environment.
• Strive for employee satisfaction.
• Be profitable.

All of them agreed, so why all the problems?

It was now time to listen to their thoughts on how these could be achieved. Sometimes the conversation went down a path to blame an individual, but for the most part, everyone began to focus on how to make it happen rather than who was to blame.

Now one meeting like this cannot be expected to solve all the problems, but it does do amazing things sometimes. I’ve been in shops, however, where it took a few months to get to where we got in just one day here.

One of my main goals in meetings such as these is to express and hopefully ingrain some key points:

• Everyone here has an important role in achieving the company’s core values – no matter what position they have.
• We can only hope to continually improve from where we are today and where we want to be.
• Each must believe in accomplishing this, or he’ll cause failures to the group.
• It may – and probably will – require us to change some things we’re doing.
• Each of us working together to solve the problems will have a much better result than individuals.
• To err is human. No one here is exempt from this.
• Assist to fix, not blame to tear down.

The last item we had to accomplish was to establish an improvement committee, making sure we had representation from all departments and that each would agree to keep his department informed and involved in solutions.

Once this was done and everyone felt comfortable with the committee, I gave them their first assignment: Define quality standards for their departments as they relate to a single job going through the process of repairs – from the time the customer makes first contact until the vehicle is gone and the file is closed.

I told them that this will constantly be a “work in progress” and that they initially need to just define the key points within their department that affect the quality of the job or the ability of the next department to perform its part. They made a commitment to meet at least once a week with their department to finish this first stage. I planned to return in four weeks to review with them again.

I also pointed them to The BOSs