Increasing vehicle complexity and OEM are increasing the cost of doing business involvement in the collision industry. Capital requirements are increasing. More training, more tooling, and more equipment is needed to compete in today’s environment. The result is lower margins.
Decreasing profitability is a trend that has been taking place for some time in the industry. Labor and material reimbursement rates have more or less stagnated. Yet the cost of labor and materials steadily increase. Compounding matters is a shortage of experienced technicians.
The cost of software and technology continues to march upwards. There is a proliferation of IT platforms designed to help collision repairers lower their costs and operate more efficiently. But with so many programs on the market they sometimes become more of a burden than a benefit.
What About Lean?
Further complicating measures is shifting consumer expectations. Insurance providers and vehicle owners have increasing expectations for excellent service, rapid repairs and low costs. The result is additional investments in process and procedures like lean, 6 sigma and kaizen.
But think five years back. Lean was just coming on to the stage. Ten years back almost no one in the industry was talking about Lean. But now most shops are actively practicing some form of lean process designed to increase throughput while managing costs.
