By Mike Davey
Mississauga, Ontario -- June 5, 2016 -- Executive Vision is a regular feature focusing on discussions with key players in the auto claims economy and the auto industry, their views on the present industry and their vision for the future. Bob Leibel is Canada’s Director of Sales and Operations for Sherwin-Williams Automotive Finishes. Leibel has been with Sherwin-Williams since 2001 and has served on the Steering Committee for the Canadian Collision Industry Forum and the Collision Council for AIA Canada.
Collision Repair magazine: News broke recently that Sherwin-Williams will purchase Valspar. What can you tell us about that?
Bob Leibel: This transaction is scheduled to close in early 2017, following regulatory and Valspar shareholder approvals. Until then, Sherwin-Williams and Valspar will continue to operate as separate companies and it is business as usual.
CRM: What do you see as the three most critical issues for the collision repair industry?
BL: The first is OEM influence. Colour styling is trending in a very translucent direction that is becoming increasing difficult to replicate in application, the advanced design of vehicles, the use of more exotic materials and the development of more “connected” and autonomous vehicles is requiring incremental investment in training and equipment, and OEM certification programs are becoming even more prevalent but the return may not justify the investment.
The second is intelligent technology. Technology is decreasing accidents as new vehicles are meeting the new and more difficult safety standards. Sales of anti-crash sensors alone are projected to reach $9.9 billion by 2020, with radar and cameras accounting for the lion-share, followed by ultrasound and LIDAR. As mandates increase for all vehicles moving forward, accidents and claims frequencies will decrease.
The third is the quality labour shortage. Insurance providers and competition are putting pressure on margins, resulting in shops looking at their labour pool to reduce their cost structure (de-skilling of labor). This complicates an already difficult situation relative to the recruitment and retention of quality employees in the face of an overall shortage.
CRM: Thinking of just the single most important issue you mentioned, what would you suggest to a shop owner who is trying to deal with that?
BL: Shop owners should consider working with a business consultant to get another set of eyes on the business. Together, they should develop a comprehensive training action plan. This plan would include a list of training providers—vendors and OEMs and the training courses they offer—with pricing. Also, identify each position and employee in the shop. From there, they can begin to develop the training requirements for each employee/position and schedule the training. The training action plan will begin to have a regular cadence as they develop their employees to meet higher standards and re-train annually as needed.
CRM: In your view, what are the most important steps for a shop to take to secure longevity?
BL: A new business model based on precise processes is critical for repairing new technologies, maintaining customer satisfaction and exceeding insurance partners’ expectations. First, partner with a business and consulting services team so you don’t have to “go it alone.” Second, develop a comprehensive training action plan. Finally, financially assess the value of OEM certification programs.
CRM: What do you think will be an area of growth for collision repair facilities?
BL: Along with shop consolidation comes claims consolidation, and in many markets, less than 5 percent of the body shop businesses control 80 percent of the claims. As such, the key area of growth and focus for most shops should be process. Developing a “process driven” collision centre to increase consistency and predictability in the vehicle repair cycle is critical. The single biggest area of opportunity for a repair facility is developing “Standard Work” SOPs for the production floor, such as Damage Analysis, Parts Correctness, Express Repair and Quality Assurance, that drive down cycle time. A shop’s ability to complete vehicles in a shorter repair cycle (quality is a given in the 21st century) will ensure survival in the future.
CRM: Thinking solely of how it’s going to change the collision repair business, what do you think is the biggest change we can expect in the next few years?
BL: Vehicle technology and the capabilities to avoid accidents will continually develop at a rapid pace. The advancements in vehicle technology will push shop investment relative to training and equipment as OEMs continue to develop more “connected” and autonomous vehicles. The ride will be fast and exciting for the industry as these advancements are and will continue to be very disruptive. This will have to be balanced with the rising performance expectations of key stakeholders: consumers, shareholders and most importantly, insurance partners. With these current and pending changes, the development of employees and the clear documentation of operations and procedures is critical to success in this evolving environment.