Running a lean paint shop

Dec. 10, 2014
Use lean material management principles to improve efficiency and reduce costs in your paint department.

What is lean material management in collision repair? Simply stated, it is the application of lean management principles to paint and material usage for body shops. With the advent of lean processes as applied to auto body repair, there seems to be one area left out of many, if not most, body shops’ lean initiatives or programs — paint and material management. 

With paint and materials (P&M) making up about 10 percent of the average repair order (R.O.) sale, the effective use of material, and therefore the P&M profitability, can have a significant affect on the bottom line. To be truly lean, every area of the business needs to be lean or working toward lean.

Let’s take a look at the six steps to lean material management

1.     Establish SOPs

2.     Less materials authorized list

3.     Ongoing management involvement.

4.     Training and input from all employees.

5.     Measure and share the results.

6.     Repeat as needed

Not all carts are created equal; neither is the house keeping of all employees.
There needs to be a well-organized and labeled stock area and work carts, not all carts are created equal the right cart will provide easily organized and ample storage for the task. This is an example of a non-structural repair cart.

Most of these steps may look familiar as those taken with other lean evaluations and implementations. For example, many shops have established standard operating procedures (SOPs) and involve employees in the process of continuous improvement. Let’s take a look at these steps in a little more detail.

Standard operating procedures
SOPs are more than just a method of doing repairs. They establish a set of rules that enable a shop to have a firm grasp on quality and costs. For example, when all work is finished with the same grit as it moves from body shop to paint shop, the paint shop can apply the appropriate amount of primer surfacer. Material usage becomes a more defined quantity (two coats vs. four coats). Establishing who is responsible for each procedure and quality control during the repair process helps to eliminate re-work. While every repair is slightly different, the significant steps in a repair can be standardized.  There are plenty of sources for SOPs for body shops that can easily be modified to suit each shop’s particular practices.  Many of these are free from jobbers and paint manufacturers.

Less materials
Using less materials starts with an authorized stock list. This is as simple as having a pre-printed order form. Employees, management and the jobber/supplier can create a list with the understanding that only the products needed on a regular, ongoing basis can be purchased and shipped by the jobber/supplier. Anything that is not on this list needs shop management approval. A simple write-in area on the form with a place for the manager to sign can keep this from becoming cumbersome.  

There needs to be a well organized and labeled stock area and work carts. Not all carts are created equal. All too often a shop is sold on a new super duper, money saving, more efficient, easy to use poly-razzmatazz or other comparable name. Many times these new so-called innovative products are better, and some even save the money or labor time they claim to. Sometimes it may not be a great benefit for the shop. Does this product fit into our established SOPs? Do we have a method to analyze and review its impact on quality and production?

Sometimes this analysis is a matter of perception and opinion, but we should make changes for the right reasons. If we have good measurement tools in place, we should be able to measure the impact of significant changes in material. If the claim is that this new product will reduce your per-RO material cost by $2, then you should be able to see those results after implementing the new product into the shop system.

Management involvement
All too often we find ourselves working with shops on lean material management (LMM) only to find the shop manager or production manager is too busy to be involved or make material management a priority. This process doesn't have to be an added burden for management on an ongoing basis. Yes, there will be an initial demand for added time and effort as the shop first embarks on its path to LMM, but this will become less over time.

Here is an example of a clean well organized stock area. Note the magnetically attached bar code labels for each product.  A Place for everything and everything in its place with an easy method to rearrange when the time comes.  

If all levels of shop management are not involved and committed to the ability to achieve a leaner material, processes will suffer. For example, as a manager walks through the shop, if they comment on or recognize a particular process or part number with employees, they reinforce the commitment to LMM. We have found that most employees want to win; they want the approval of their boss. This does not need to be difficult. A simple comment or question about material from a manager alerts the employee that it is still an important issue.

Training and input
This starts with the formation of SOPs and the Authorized Stock List.  Reinforcing that employees are part of the solution and not merely a part of the problem is a great start. Again, we have found that the employee training stops with a certain level of employees. Even tasks performed by entry-level employees can have a big impact on material usage and quality.  Let everyone have a voice and everyone can be part of the team.

Measure and share results
Again we are reminded of several implementations of LMM where the tools and reports we create to help with the process never make it out of the manager’s inbox. The employees are left in the dark as to results of their efforts; this is the quickest way to slow down LMM progress. 

Imagine going to a baseball game with no scoreboard. Many will be able to keep score in their head; but this is not so easy at a basketball game, or in the work environment with dozens of cars in production and hundreds of parts and materials involved. The point is people want to know the score. Withholding the score is one of the quickest ways to have employees lose focus, which derails progress.

So what do you need to measure material performance? Simply stated, you can't manage what you don't measure. Accessible, timely actionable reports are critical to both management and staff in order to best manage results and make corrections where needed. Several jobbers across the country have embraced LMM, either with internally created or third party reports. The advantage of third party reports is in comparative data — the sharing of ideas, results and methods can more comfortably be done with other shops that are not your direct competitors, but are your peers. 

Several body shop 20 Groups have added LMM to their reporting programs. A quick note on these reports: They need to contain actionable information, and it needs to be broken down so that both management and the technicians can understand and use the information to make improvements. While management may be content to look at a larger picture, technicians thrive on productivity and margins to get a more detailed view that relates to what they do or contribute, often down to the specific part number level.

Properly formatted reports can provide a snapshot or overview for management while still providing more specific details for the production leaders and technicians. This can be through multiple presentation or sorting options, or allowing viewers to drill down to the details of figures and information. Be sure work with a report format that provides actionable information to levels or staff. 

Some KPIs are great to look at but have little value to helping the technician make improvements. An example is clear usage — refinish hours per gallon of clear. This might be a benchmark that shop owners can compare and talk about, but it provides little in the way of actionable information for the technician. Turning this calculation around slightly and measuring ounces of clear per refinish hour provides a benchmark that the technician can use to make improvements.

Repeat as needed
This is an ongoing, evolving process, and as new materials move into the shop, we need to adjust SOPs and material needs. Change is hard; however, only through continuous repetition and adjustment can any improvement process succeed long term.

As for reports, they need to be simple. Graphs, tables and charts are great, but don’t get carried away with too many KPIs or calculations, especially when you first embark on the LMM quest. A good suggestion is to start with three to five calculations. For example, calculate total liquid material cost per refinish hour with total non-liquid costs per refinish hour. How does your total material cost compare to your material door rate, or better yet your actual material rate? Other breakdowns that can help with easily controllable costs lie in the non-liquid supply areas such as masking materials, comparing tape cost per hour vs. other masking products. 

When it comes to body technicians, the simplest calculation is total material cost per body tech divided by flagged hours for the same period. This takes a little setup to get started, with separate cabinets/stock for each tech, replenished separately and of course the taking of flagged hours for the same period. Many jobber systems can provide individual technician tracking as sub-accounts, while still providing good, simple overall statements and reports.

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