The collision repair industry landscape has changed in recent years, due to increasing competitive challenges. OEMs have chosen to satisfy customer needs by increasing product variation and complexity. This complexity is felt in the “re-manufacturing” process we know as collision repair. Combined with new insurance company requirements and – most importantly – evolving consumer expectations, a new standard for how collision shops operate is quickly taking over the industry. For a number of highly performing larger shops, it’s already here.
As we transition into 2019 there are radical changes reshaping the collision industry landscape, including consolidation of many markets. Modern consumers have grown accustomed to personalized, on-demand experiences. Insurance companies (customers) want to be treated individually. Insurance companies are introducing more new claims products more quickly, and are focusing their marketing on specialized products such as Allstate® QuickFoto Claim. Our industry is on the cusp of the information age, and these changes are ushering in new challenges for collision repairers.
What is our best approach to these challenges? We must become agile.
Agility is the ability to thrive and prosper in an environment of constant and unpredictable change — does this sound like our production floors? A shop that positions itself to adapt and adjust to the changing environment will not only navigate the challenges, it will thrive on new opportunities.
What does an agile shop look like? How does an agile shop operate?
Visual management
Facility design is a critical component of the agile shop. How we utilize and repurpose space within our collision centers will determine our level of productivity and profitability. A work environment can be structured in a way that makes it self-explaining, self-ordering, and self-improving and can be managed visually. An out-of-standard situation is immediately obvious and can be easily and quickly corrected.
In order to reduce waste and become a more agile facility we recommend redesigning the production floor for continuous flow. To accomplish this, we need to face the reality that we must serve customers within their expectations with perfect quality, on-time delivery, and at a lower cost. To approach these demands requires that the shop is already using some improved production methods such as Damage Analysis and Parts Correctness. This is a starting point. You can only build agility on a firm foundation. Only the innovative and agile companies will be positioned to make the most of these changes.
Damage analysis
Damage analysis and blueprinting is process to determine all the needs of the vehicle through complete disassembly and analysis. Components are analyzed carefully to determine need of repair or replacement. Instead of discovering additional operations halfway through the repair cycle, these requirements are identified in advance. The needs of the vehicle are documented within a repair order to ensure 100 percent accuracy. This work is done by a dedicated, experienced analyst: a Repair Process Manager (RPM), not a traditional estimator.
This is the opposite of the old “tear-down” process which inevitably results in unforeseen issues delaying completion. This traditional process does not allow shops the agility needed to survive and thrive; and forward-thinking shops have created a new environment in which they are able to adapt and adjust to the changing environment.
Damage analysis is a dedicated space in the future shop. Carefully disassembling and assessing vehicle damage is the only focus. It is driven by a deliberate process utilizing a mobile (agile) estimating database workstation at the vehicle, with a technician identifying and documenting each need of the vehicle in detail with an RPM. Capturing this data in the beginning of the repair cycle is ideal for ensuring accuracy, as the complexity of vehicles today call for extensive sectioning, scanning and manufacturer requirements.
Parts carts are equipped with a schematic outlining an exacting process for kits, designed to accommodate the repair and reassembly process. Damaged parts are placed on the parts cart, and new parts are mirror matched to the damaged parts as they are received. The mobile parts cart allows technicians access and flexibility to inventory on and off the production floor as needed. An agile shop does not cut corners on parts correctness. As new parts come in, they are unboxed and checked for correctness against the damaged part, and only added to the kit once verified as the correct part.
Agile remanufacturing
In an agile remanufacturing model, specific technicians are tasked with the parts of the repair process with special attention to efficiency. In modern large collision centers, it’s rare that a painter preps and paints his or her own work. Combo-technicians that do it all are even less common. In contrast, in an agile shop it is just as rare for a high skilled structural technician to disassemble a vehicle, preform minor repairs, and reassemble their own work.
Agile remanufacturing is a production trend moving away from the old ideas of large factories making huge quantities of standard products. Other industries will need a few more years before these changes begin to bite, but the collision industry has already been bitten. Only when everything is stable can a series of totally rigid standard operating procedures be successfully deployed. The collision repair industry is a low-volume, highly-variable environment not well suited to this standardized lean-type process. In fact, after 20 years of Lean in our industry, thousands of printed articles, presentations, and training events, all the colored belts in the world have not moved our industry as a whole. Collision repair is a $34 billion industry with 40,000 plus shops, and yet it still struggles to implement the “blocking and tackling” of Lean. Still, perfect quality and very high levels of service are expected and required of us every day. A major advantage of the agile model is that shops can identify any delays, stops or slowdowns in real time, adjust, and re-deploy labor where needed.
The average age of collision industry technicians is rising. Boomers are retiring. And, the number of qualified, skilled technicians is declining. In this environment, the model of handing eight vehicles to one technician and expecting them to efficiently execute every piece of the repair cycle is a dying model. It’s flawed from the beginning because it does not address skill set nor the agility to deploy labor based on the constant change on our production floors. The skill set required to take apart a damaged bumper, damaged fender or broken headlight is different than that of a frame and unibody technician. Agile remanufacturing aligns skill set to labor operations and the constantly changing labor demands.
The future is now
One of the strongest advantages of agile remanufacturing is greater productivity. The agile shop, with a well-implemented remanufacturing system, will achieve touch time approaching 100 percent, as someone is always on a vehicle producing labor that is needed, as opposed to one technician having to dance around several vehicles at a time and building a flag sheet. It simply makes more sense from a productivity standpoint to task lower skilled technicians with dismantling vehicles, higher skilled technicians with structural repair, and mid-tier technicians with reassembly; each supported by the guidance of a highly-skilled certified technician.
Agile is the future. It is inevitable that profitability and survivability are going to force us into a more flexible business model to thrive and prosper in an environment of constant and unpredictable change. Our production floors? The old model cannot sustain the evolving demands of our industry. Shops must acquire or develop the ability to effect change rapidly, adopt highly-flexible management structures, and comprehensive methods of introducing change and prospering from it.
These changes are taking place rapidly in our industry. The shops that will meet the challenges of the ever-changing collision marketplace of the twenty-first century are those that are able to become agile in every aspect of their business. Agility is not a "magic wand" to solve all ills. It is built upon the firm foundation of lean methods, coupled with an organization that is physically, technologically, and managerially built for swift and unpredictable change.
