The true cost of collision repair supplements

Some shops never have more than one supplement on repairs while others have three, four, five or more. Supplements are costly to production, add workload to accounting, absorb damage appraisers’ time and reduce confidence of bill payers — the biggest concern is that supplements are preventable.

Consider these factors:

1. A discussion arose about supplements during my SCRS Repairer Driven Education presentation at SEMA on Damage Assessment Documentation when an attendee that is a claims processor shared that when more than three supplements were submitted on a repair their trust in the shop was reduced.

2. Supplements are costly to production because, commonly, when a supplement is submitted, work on the vehicle stops, it is pushed outside, and the technician is given another repair to keep him busy. This creates work-in process that is not moving forward. Technicians want to get paid for what they have accomplished and the bill for the pre-ordered parts is coming due. These actions also detract from positive touch-time and cycle-time metrics, which undermines relationships that shops rely on for workflow.

3. Each invoice to be processed adds time to the accounting department tasks: each invoice needs to be matched to the repair, validated against accounts payable and a check must be processed for payment. 

4. Every damage appraiser I talk to tells me they have too much to do; I believe it when I see their supplement workload. On average, a supplement takes 30 – 45 minutes to create and finalize. If a repair has three supplements it can absorb 1.5 to 2.5 hours of a damage appraiser’s time, pulling them away from important things like customer service.

5. Prevention is simple in theory: write your damage assessment after the vehicle is disassembled to the point where no additional damage is found.  It’s no secret that usually the last damaged part you find is the first part you need to reassemble the vehicle. It doesn’t matter how many parts you pre-ordered, the repair is not progressing until that last part is on-hand. However, many shops are anxious to get an initial appraisal keyed into their estimating system and move the repair to production; the number of shops that perform complete disassembly’s are the minority.

The best practice would be to educate the vehicle owner on the repair methods upfront, get a signed repair authorization from the vehicle owner, disassemble the vehicle and write one damage assessment documenting the steps needed to complete the repair: one repair, one assessment, zero supplements, one parts order permitting the repair to go through production without stoppage.  Use the claim information on the initial appraisal to assist the vehicle owner process your damage assessment to their insurer. The customer generally just wants their vehicle fixed in the shortest time possible with the least amount of aggravation.

Can you fix your supplement issue tomorrow? No, but you can put the wheels in motion by choosing a repair to test the disassembly process. It might be one insured by a company you have a direct repair program with, one you have a good relationship with or a customer-pay repair.  Discuss the disassembly process with one of your technicians and a damage appraiser explaining your goal. There is a good chance you will get some pushback, but this is your opportunity to sell your idea as you coach them through the procedure. Once they get a couple repairs in play using the disassembly process, see how well things move forward and you can repair a vehicle from start to finish without interruption. You will see their thought process change.

Your next step will be to use those repairs to show the benefits to the rest of your team. Ask your test team to help you explain the results. It’s always better when teammates can hear about successes from their peers and it helps gain buy-in. As you reflect back you will see that reducing your supplement load is the best thing you can do for your business.