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Heavy duty shops adopt lean material management from body shops

Tuesday, March 18, 2014 - 07:00
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At first glance, the difference between the heavy duty repair and the typical body shop repair industry segments seems huge. Other than the fact that both segments are repairing motor vehicles, the shop’s size, tools and equipment needs are vastly different. The construction of the vehicles is also vastly different. The heavy duty vehicles are full frame, and a hefty frame at that. The availability of technical information is a bit scarce for the heavy duty shops, and there are fewer choices with estimating and management systems. Colors are often custom for each vehicle in the heavy duty segment, chosen by the vehicle or fleet owner. There are often less color information or color tools available, although we have seen some great improvements in recent years from the paint manufacturers’ color systems and tools.

Don’t think for a moment that the trucker or fleet operator is not just as particular with their very substantial investment as any upscale vehicle owner about quality and color match.  The insurer is just as conscientious about managing their costs.

While the actual repair work is different and the knowledge base even more diverse, the heavy duty repairers face challenges similar to the typical auto body repair shops — customer satisfaction, insurance relationships and the demand to stay on top of technological changes. The heavy duty segment often faces even more stringent environmental rules, notably with VOC content.  Add in the other key business similarities, such as making a profit, and the two segments do share some areas of concern and opportunity.

Managing our materials
When we look at material management across the segments, there is a difference — or is there? Many heavy duty repair shops have adopted similar material management techniques that have been in use by their brethren in the body shops for some time.

This pie chart shows a breakdown by category of the major P&M categories. This is from a typical DRP driven body shop.

Tracking and accounting for paint and materials (P&M) usage is an important task for the heavy duty repairer. Not only do they often deal with a much higher per vehicle P&M costs, due in no small part to the larger size of the vehicles, but they also contend with some vehicles having a cycle time often much longer than the repair of your typical passenger vehicle.

Results are what matter. Working effectively with P&M has a huge impact on quality and margins. Most of the heavy duty refinishing materials are similar to those used on typical auto body repairs. We have color, primers, sealers, fillers, abrasives, masking materials etc. The first job is proper accounting of the items that appear on a P&M bill. Separate the itemizations into two categories: P&M costs and all other costs. Within each of these categories, we can have several sub categories.

For instance, other costs may include shop supplies, booth maintenance, small tools and equipment, and will also have a separate cost of goods sold (CGS) category for line items. These line items, just like those in the typical body shop, may include those products that are not part of P&M sales, but are charged separately, such as seam sealers, adhesives, decals, clips and cavity wax, among others.

When we compare costs of color, one unifying measuring stick is the refinish hour. If we compare the total P&M cost per hour, we use the same standard, regardless of segment, geography or paint brands.

Drilling down a bit deeper, we can compare the ounces of ready to spray (RTS) materials, such as color per refinish hour.  As long as we are comparing similar type repairs, we should be able to establish some good benchmarks and find those areas where we have an opportunity for improvement. 

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