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Avoid rabbit holes by staying focused on what is actionable in your shop

Friday, March 1, 2019 - 09:00
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For almost everyone in business there is far too much to do and too much information to reasonably digest. Both suppliers and shops generate and receive an overwhelming amount of information daily. There is always the latest innovation, critical concern or alarming piece of information.

Avoiding rabbit holes can mean avoiding (from day-to-day operations) measures and information that are not actionable. Look for ways to move the needle, make improvements or maintain quality and consistency. Set yourself up to avoid rabbit holes. For Key Performance Indicators (KPI) focuses with staff, look for measures that people can relate to in their work space. Speaking with your paint department about a poor paint and materials (P&M) gross profit percentage may not be the best tool or method to help them relate and in turn move the needle. Having a conversation about what goes into the P&M costs as measured by hour is more relatable for production staff. Production staff is aware of the labor hours per job per repair order (RO) (you are providing these to staff, right?). More specifically, sharing cost per ounce of color, clear and surface prep is something very tangible for most production staff. Avoid the rabbit hole and discuss ounce and hours with paint staff.

I see this a lot with KPIs and similar business measures. These KPIs, or Critical Profit Variables (CPVs), are great and are valuable tools to help everyone better measure, and therefore better manage, their business. But all measures are not the same for all businesses. Financial measures and ratios such as Current Ratio, Breakeven, Cash Flow, ROI, RO, Return on Sales and more are wonderful measures, but are not always the best references with non-financial personnel. Other measures may not be the most suitable for all businesses. Two misunderstood measures that come to mind are sales per square foot and sales per employee. I’m not suggesting that these are not relevant or valuable measures; I’m suggesting that they are not as actionable as other measures. For these you can only increase sales or reduce employees (or even less likely, reduce square footage). So once these measures have been performed, they aren’t the best drivers of the day-to-day operations for body shops.

With KPIs, it is easy to go down a rabbit hole. Before spending too much time on any measure ask yourself: is it actionable? In the example above, you can discuss ounces used per refinish hour with your paint staff; they in turn can use that measure as a guide in their daily tasks. Avoid the rabbit hole.

Those sales per employee measures can be better used by jobbers, as this is a more suitable measure for this group, where staggered shifts and part-time employees can have a significant impact on staffing. Some jobbers will have part-time employees helping with order pulling and deliveries only during peak times, such as when they process and ship stock orders. With this group, we now have an actionable measure.

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