It doesn't appear the insurance companies are going to eliminate any of the shops' paperwork anytime soon, so the best thing to do is find a way to handle it without creating hardship, havoc and added expense. The best way to do that is identify what needs to be done, what's being done and who's doing it.
As a management analyst in the U.S. Air Force, I visited many vehicle maintenance facilities. When I found a problem, it generally was because processes weren't being followed and several people were performing pieces of the same operation, but nobody was doing all of it. So, tasks were left incomplete, which created a problem that took more people to fix.
To find the answers to the three aforementioned questions, I'd give everybody a tablet and ask them to write everything they did from the time they walked in the door until it was time to leave. Then I took the tablets, identified all the individual tasks they said they were doing, and compared it to what needed to be done. After my review, I always found several people were doing the same task, but not all of the tasks were covered. To alleviate the problem, I'd outline the operation in a standard operating procedure (SOP), and, in most cases, I found once I had the people trained, it would take less time and fewer people to perform the operation.
Defining your operation processes through SOPs is an important step in controlling your administrative costs. SOPs identify each task in the operation, when it's to be done and who is supposed to do it. When you develop an SOP, you get rid of the waste – steps that add work but don't present value.
Walk through each step and evaluate each one's purpose. Determine if the step is needed to meet the objective. If not, get rid of it. Map the process using the minimum number of steps. If an SOP is too defining, it'll be confining and less likely to be followed. If they're not followed, you're right back to hardship, havoc and added expense.
I heard a conversation in which two executives of a national used-car chain stated they had the best processes. During the same conversation, they talked about one of their competitors and said the only real difference between them and their competitor is their competitor actually follows their processes. Don't end up like that used car company.
The best way to ensure an SOP is followed is to create accountability, getting buy-in from the people you made accountable and giving them ownership. You'll be surprised to see how effective people are when they "own" the process. When they realize it's their process, they become more creative, more efficient and are generally happier. When they're creative, they'll continue to refine the process, increasing their efficiency. As they become more efficient, more will be accomplished in the same time period, thereby reducing your administrative costs. Having them happy is a bonus, but I believe if you want happy customers, you have to have happy employees.
Without SOPs, any other tool or system will be worthless. A good shop management system can augment your SOPs by helping reduce administrative costs by automating time-consuming routine tasks. Several management systems will communicate with rental car companies, marketing software, insurance companies, your parts vendors and even your customer. This eliminates the need to make multiple phone calls to update repair status, order parts or signal your marketing software to create a thank you letter.
I've talked to several shop owners who had shied away from management systems, but after a quick demonstration, they found they're very cost effective. When used properly, they are valuable assets. And one other thing that's good about management systems is that they never call in sick or need a vacation.
In most cases, implementation of well thought out SOPs and the effective use of a shop management system will reduce your administrative tasks to the level where you'll find you have extra people. Eliminating a position in today's economy would be a plus to anybody's bottom line.
