The Journey to Operational Excellence
Dave Luehr – September 2019
One of the commonalities between most collision repair shops is chaos. I believe many shop owners have become complacent with chaos, chalking it up as a “normal” part of the industry. This belief in my opinion is insanity.
Having been involved with collision repair for over 35 years now, I have witnessed an interesting progression and growing separation in shops around the world. While some shops are progressing, many have not changed much in terms of production systems since I began my career all those years ago. Even many of those that have changed by adding bells, whistles, and lean techniques are still experiencing excessive chaos, missed deadlines, stress, and often lackluster performance all around. So why is this the case?
To explain this, I will categorize shops in three general categories. Keep in mind that most shops are often in between the categories in many different levels of progression, but just play along.
The first category is what I call the “traditional shop.” Most shops in this category have not changed much in the last forty years. They tend to operate using commission or flat rate pay systems. The techs essentially run the shop as sub-contractors and with all the behaviors one should expect. Techs need to make their own way financially and thereby expect to have multiple stalls to work out of in order to have enough work to keep them busy. In most of these shops, the technicians are expected to write their own supplements, check in their own parts – essentially manage their own little business.
The traditional business model requires journeyman level techs and excessive amounts of work in process so each tech can stay busy while bouncing from repair job to repair job as they discover a never-ending supply of process defects, supplements, wrong or missing parts, etc. In short, massive chaos!
The Journey Shop
The second category of shop is what I like to call the “journey shop.” I call them this because they always seem to be on a journey from a traditional business model to a “leaner” business model, desperate to make more money and reduced chaos. There are thousands of these shops in thousands of different stages of the journey. Some have discovered higher levels of performance through lean tools such as 5s and production leveling boards. Many journey shops are finding additional performance through formal repair planning, mirror matching, and even fancy “takt time” linear production systems. The smart ones are also discovering the benefits of moving away from traditional pay plans and instead favoring hourly or team pay systems that allow for varying levels of skilled labor.
All of these journey shop improvements have certainly helped thousands discover higher performance and marginal to significant reductions in chaos; however, many of them are actually frustrated by their inability to get to the next level.
The Problem with Journeys
While I love a good journey as much as the next guy, I believe it is critical to make sure that the journey takes us down a great path instead of the path to mediocrity.
My British friend, Jon Parker, a collision industry innovator, says, “The problem with repairers is that they are always attempting to do the wrong things righter.” He explains the limitations of the journey shop, likening it to building a bicycle for racing. A person can buy a good bicycle, add better cranks, gearing, etc. The rider can work out and strengthen his legs and buy aerodynamic gear. Eventually, through a lot of continuous improvement, a person could have a very fast bicycle, one of the fastest anywhere… But, and this is a big but, it will never be a Formula One race car! In order to achieve this level of performance, one must forget everything they know about bikes and begin learning how to build a new framework and belief system geared around an even higher level of performance.
Often, I have found that many of the bells and whistles found in some journey shops are put in place to manage an excessive amount of work-in-process that, if dealt with correctly, would eliminate the need for all the fancy stuff. Simplicity is always the best course.
Next Level Shop
The third kind of shop is a rare, but growing breed. “Next level” shops are all over the globe producing high-quality repairs in 2-4 days and often making profits in excess of 20%. Many of these world-class operators can produce 40-50 cars a week out of 8,000 SF shops and 90-100 cars a week out of 12,000. Yes, these guys and gals are facing all the same industry challenges as everyone else, but they refuse to “think” like everyone else, instead choosing to remove limiting beliefs and build greater businesses. Yes, they are willing to give up the “good” in order to get to “great!” This is a different kind of journey that takes courage and willingness to give up comfort and complacency to achieve the greatness.
A few of the key beliefs of next level shops include:
- People are motivated by more things than money alone.
- Teamwork is a must.
- Continuous workflow can be achieved.
- Techs don’t need more than one car at a time to work on.
- Scheduling and work-in-process mastery is critical.
- Accurate repair planning is critical to continuous workflow.
- Growing and training people in-house is the best way to a sustainable future.
Clearly, this is just a small sample of the empowering beliefs necessary to reach the next level of performance. I would venture to say that many of you reading this probably agree with some of these beliefs, but still struggle overcoming other competing beliefs and are therefore unable to properly implement the necessary actions. A few of these limiting beliefs include:
- The insurance company won’t let me do that.
- If I take my employees off flat rate they will quit or no longer be motivated.
- Techs need more than one car at a time to work on because fillers and primers take time to dry.
- It is impossible to write accurate repair plans on every car.
- I don’t have enough money to make these kinds of changes.
- I can’t find good people to work for me.
As you have heard me say before – “right now is the greatest time in history to be in the collision repair business, but only for those with the right mindset!” The future will reward those of you that, despite having had success with old methods, are still willing to change and try different modern approaches. I know this to be true because I spend time with shops all over the world and have seen the results first-hand. What is exciting is that any of you that are willing to challenge your beliefs are capable of becoming a world-class operator. It will not be easy, I can promise… but nothing truly worthwhile is.
If you would like to build a “next level” world-class body shop. We are here to help!
Originally posted at https://elitebodyshopsolutions.com/process/body-shop-journey/