Repairing complex vehicles continues to be daunting sometimes and challenging at best. Though vehicles may be similar in make and model, they differ widely with the damage caused by each collision. A vehicle, which must be restored to its pre-accident condition, needs to be the same visually and have the same crash-worthiness as it did before the collision. Rust resistance also must be restored (some processes needed to repair the vehicle may cause hot spots).
To complicate matters more, a collision repair center has multiple customers to satisfy. With a vehicle owner as the primary customer and an insurer as the secondary customer, the repairer must make vehicle-specific repair decisions to meet their needs regarding cost, cycle time, safety and quality – all must be considered. Because each project is different, general repair procedures and cost per labor hour might not be accurate.
To accomplish these objectives, a manager must be knowledgeable about many repair operations and processes. Additionally, if you were to ask 100 collision repair managers what their main concern is when managing a collision repair shop, you'd probably receive 100 different answers.
So how should an effective manager prioritize? Though well-run shops will have standard operations procedures for different types of repairs, each vehicle will need to be considered individually, and those procedures modified to meet those vehicles' needs. Because of each repair's individuality, billing must be individual, too. It's safe to say the goal of making a reasonable profit in the paint department is near the top of all managers' lists. If a manager is to produce 35 percent to 38 percent of the total labor sales from the refinish department, he can't afford to not get paid fully for what is done.
For a shop to maintain a high-profit level, many areas must be managed properly. One of the most important areas to manage occurs when the estimate is produced. Other concerns are areas such as production management, changing equipment and its maintenance, production tracking and assessment, and attracting and keeping a satisfied customer base.
With these challenges, one constant is always changing. Each model year, new vehicles and repair procedures change. Keeping current with these changes is a constant challenge. Repair procedures and billing also must be modified according to the new vehicle changes. A shop manager must be aware of these changes and how they affect the business and profits.
Five areas must be monitored constantly and potentially modified to remain profitable. While these aren't the only ones to monitor, they're the most important:
1. Estimate. If not written properly, repair and profits will suffer.
2. Standard operating procedures. Although each vehicle must be repaired according to its specific needs, procedures can help the repairer and personnel responsible for billing to include all the necessary areas to restore each vehicle to pre-accident condition.
3. Shop efficiency. With flat-rate tables sometimes restricting the time allowed to repair a vehicle, a shop's efficiency and the technician's ability to repair a vehicle correctly in the quickest time might be among the most important elements of a profitable repair.
4. Equipment changes. Keep up with all industry changes that affect costs and profits to adjust processes.
5. Shop integrity or honesty. A reputation is difficult to build and even more difficult to repair once damaged.
The estimate
Consider a few examples: If an estimate is written to blend into the adjacent door panel and the blending procedure doesn't have detrimming as an included item in the procedure, it should be added separately. If the procedure for the shop is to make a spray-out panel for each refinish repair, that procedure should be specifically listed. If a used part is received, the cleaning and preparation needed for its use should be listed, too.
Many items, such as the replacement of plastic clips (Fig 5) might break when removing moldings (these must be replaced when the molding is reassembled), that are easy to overlook. Let's say the clips cost $5, which isn't enough to make or break the reasonable profit of a business. But when multiplied by the number of vehicle repairs completed in a week or a month, it can add up to a significant amount of profit lost. Consider moldings, which are removed when the vehicle is detrimmed for painting. The P-Pages may pay for the amount of labor to remove and replace the molding, but it might not pay for the adhesive tape (Fig 6) required for replacement. If it doesn't, the estimate should have a line that reflects the cost of that tape.
SOPs
To write a thorough estimate, estimators must know each repair procedure, and the techs should perform each one the same way. It should have written standard operations procedures (SOPs), which help ensure each repair will be performed the same and quicken cycle time by avoiding the dreaded 20-minute questions that result when a technician isn't sure what to do next and feels he must stop working and seek the supervisor. The technician leaves his work to find the supervisor, who's invariably on the phone or with a customer at that moment. So, the technician patiently waits for the supervisor to be free, then he asks for guidance. After receiving the directions, he returns to work, but 20 minutes or more have elapsed. While it might seem 20 minutes isn't a long time, when this happens several times a week, hours or even days of production might be lost by month's end. By using SOPs and training technicians in core values, many 20-minute questions often can be eliminated.
SOPs aren't rigid documents but should be viewed as a checklist for repairs. Each vehicle should have the standard procedures applied as the repair requires. Supplies needed for a repair can be ready and available as the work progresses through the shop and for technicians so vehicle tracking can be more precise. The estimator can follow the vehicle through the shop and keep the customer informed.
Shop efficiency
One of the best ways to increase a shop's profit is to increase efficiency. Along with ongoing training of repair technicians, the adoption of more efficient repair processes should be ongoing. In successful shops, ways to improve a process and make it more profitable are always considered. Some of these processes have a learning curve and may need to be considered carefully. Technicians should be trained before a process is rejected. For example, using UV priming (Fig 7) will require new equipment and training but can lead to fast small-area repairs and result in more profit.
Painting parts off the vehicle, then installing them after is another frequent complaint of body technicians because it's new and they believe it costs them time when installing. But the time saved by just reducing the number of times paint needs to be prepared and the reduction of material costs compensate for the time spent learning the new process.
Equipment changes
New and improved tools, materials and equipment are being produced and marketed constantly, and it seems as though it's a continuing struggle to evaluate their usefulness to each shop's needs. Not all should be adopted, but keep an open mind and evaluate procedures and processes constantly, if the paint department is to remain productive and profitable.
Managers need to develop a cost vs. benefit analysis system to evaluate new equipment and procedures. Careful selection of the best technician to try the new procedure or equipment and the new process should be evaluated objectively.
Honesty
Honesty, one of the most important core values of a business, goes a long way toward ensuring a reasonable profit is made. Values, such as service, honesty, quality, efficiency, appearance and profit, will help customers' respectability. They must know if a shop writes to sand and buff a vehicle and that procedure isn't needed, it'll be removed from the bill. Customers should know that when a vehicle is detrimmed, it's detrimmed every time. A business' integrity is lost easily, and it's difficult, if not impossible, to regain once it's lost. Though it doesn't directly affect how a shop is paid every time, honesty impacts how a shop is paid throughout the long term.
Making a reasonable profit must be a goal at all times through a vehicle's repair; each area of repair should be profitable, or a shop won't remain in business. As each business improves with the market, managers must look for processes that allow the business to realize reasonable profit.
