Learning through Frustration

To me frustration is evil, it affects the way we think, it alters our attitude and the end result is not usually positive, however I see people in shops live through it everyday rather than learn through it.  When I was in a shop I had frustrating days, more than I want to count but the way I moved forward was by learning from the things that frustrated me.  Was it the customer that came back five times to get their car right?  What about instituting a quality control program that inspects the repair through each phase eliminated comebacks.  Then there was the repair that needed a different part everyday, developing a blueprint process resolved that frustration.  Of course while you are dealing with the customer that returned for the fifth time and the tech that found the another part need the painter was coming towards you telling you that pearl white tri-coat on the Lexus bumper he painted yesterday wasn't even close.  As you walk back towards the paint shop and ask the painter to gather up his spray out cards so you can see where the problem is he gives you the deer in the headlights look and says "They only had one color position so I just used it."  Time to take the painter back to basics and review the paint process with him to eliminate this frustration.  The key to eliminating frustration is identifying the source, educate the people involved in the right process and develop a review system to verify what the process defines.  More of a check what you expect activity than a fire-fighting action.

Over Capacity

I think quite a few of us have been struggling with the "over capacity" statements about the collision industry.  I have been in many discussions about this topic but I never found a logical comparison to create a visualization of the over capacity issue.  I watched Greg Horn's Mitchell Industry Trends Webinar and found a good visual on page six.

It was created by Frost & Sullivan for Mitchell and the comparison between Tire Dealers 12.1% of the Automotive Service Providers and 13.3% Collision Repair Facilities.  To me that was eye opening and shows that there is a definite over capacity of collision repair centers.  What is more disturbing this is after CollisionWeek shows we dropped from 36,529 shops in 2005 to 34,143 in 2009.  What did that percentage look like in 2005?

The reason this picture is so vivid for me is in most instances cars need tires a lot more than they need collision repair.   It is said that a vehicle owner needs collision repair every seven years, I also have heard that average is moving closer to ten years.  Most tires have a 45,000 to 60,000 mile rating on them so if a drive maintained the national average of 15,000 miles per year they would need tires every three to four years. 

Seems there would be a lot more demand for tire stores than collision repair centers.  If this ratio was more aligned I would suspect that the numbers should be reversed at a minimum. 

This shows me that in order for a collision repair center to stay in business they have to be at the top of their game.  I have several articles in ABRN relating to this such as How to Prosper in a Down Economy and Creating Profit Centers to Develop Upsells.

I encourage you to look at these articles and do what it takes to move your business forward.  A reduction in collision centers is inevitable, I just do not want it to be you!

Collision Blast Contest

Donnie Smith asked me to help spread the word on the Collision Blasts Back to School Contest This giveaway is going to give several collision repair students and/or instructor and school, the chance to win tools.  Motor Guard, CP Tools, 3M, Sears, and Collision Blast have partnered together to provide contest prizes for our technicians of tomorrow.  

Pay Plan Webinar

Bill Park from mpoweru is presenting a webinar on How to Set Up a Varible Pay Plan for Technicians that you should not miss.  It is August 23rd at 10:00 PST.

With all the changes in vehicle manufacturing, environmental concerns, and overall economic stress, it is critical to have flexibliity in your comprensation plans. You just can't bucket all repairs into the same basket, and you can't expect the same tech to fix all repairs.

During this webinar we will be covering the following:

1) What the future looks like for the repairer

2) A brief chat about skill level requirements

3) How to analyze the benefit of changing your pay plans

4) Pay plan options

5) Implimentation strategies

6) Q&A

Sign up now, before you forget.

DEG Works

Yes I am beating on the DEG drum again and that is because it works!  While I was coaching at Casey Collision Center earlier this week we submitted some things to DEG that showed up as included labor in CCC that just did not pass the common sense test.  Things like the rear bumper reinforcement showing as included labor in the bumper overhaul, we asked how, the bumper is on a stand and the reinforcement is still attached to the vehicle.  That error will be corrected in the September update.  We also found some parts misidentified on a 2011 BMW X5, those will be corrected in the October update.  When the estimating system shows something as included and it just does not make sense first review the P-pages.  If the P-pages do not add any clarification submit the inquiry to DEG.  Estimating software providers do the best they can with the information they receive, it takes the efforts of those in the field to keep things in check, do your part and submit errors.  In one day we were two for two, what is your ratio?

Organization

When I was presenting The 5s Philosophy to the Hampton Roads Autobody Assn we talked about organization (Set in Order) and how sometimes applying the 5's to an entire shop at one time could be overwhelming.  In minute with Maxwell this morning John Maxwell talked about organization http://johnmaxwellteam.com/organization/ and drove the point home.  When working towards your 5s goals start small, maybe in your mixing room, paint shop or parts room.  Once you begin others will see the value, you will be like Lucy in John's message and it will all come together.

Teardown, or not!

I got a call the other day from a former student of JSE Damage Appraisal Training and she asked a great question.  "If I think a car is going to total should I have it torn down to find all the damage?"  My answer to her was no.  The vehicle in question was a 2000 year vehicle hit in the left rear; the quarter needed to be replaced, needed a rear bumper and trunk lid.  I told her the first step was to identify the major assemblies that needed replacement, locate LKQ prices and determine the value of the vehicle from http://www.nadaguides.com/Cars .  If the prices of the LKQ parts and labor exceeded the value of the vehicle then there would not be any need to have the vehicle torn down.  Itemize the major assemblies on the estimate, create an estimate note that the major assemblies exceeded the value of the vehicle, copy and paste the valuation sheet from NADA to the note, and note that this is not a complete estimate.  Identifying the major assemblies took less than five minutes and in less than ten minutes the entire appraisal was complete.  The insurance company got the answer they needed quickly and she was able to move on to a job that was going to generate dollars.

Wasting your technicians time to tear down a vehicle that would more than likely be a total loss is a real morale killer.  Even if they received the generous donation of 3.0 hrs from the insurance company for the tear down they would still feel they were spinning their wheels.  Additionally the insurance company would applaud the decision not to tear down a vehicle that was a potential total loss.

In a similar situation there was a vehicle that looked like it could have been a total but the major assemblies were less than the value of the vehicle and a simple tear down proved the vehicle to be reparable. 

How to Prosper in a Down Economy

What you do in your business today will make a difference on how your business operates tomorrow, and that will be true for the next day and the day after that. The collision industry is changing daily, the recession has disrupted our comfort zone and the demands on our industry have grown.

Nobody has escaped from the impact of the recession, but there are those who have excelled. They are the ones who paid attention to their business and not the direction the economy is moving.

It is easy to lose your focus when you are faced with a downturn in the economy, but in actuality now is the time to stay focused and look at your business plan. Are you reaching your goals? What is stopping you? What are you doing to energize your business to move you forward? Confront this downturn head-on and take advantage of it. Maintain your vision on where you want to go and don't let panic change that focus. Base all your decisions on fact not on the panic or fear that is generated through emotions.

Important Websites

Through research and training individuals to create complete damage appraisals I have collected quite a few websites to assist in the process.
The first is http://scrs.com/ if you go to this website you will find the "Guide to Complete Repair Planning" and it is indeed complete.  I recommend saving this to your desktop so you can review before you go to write any damage.  Print out the page(s) that reference the area of damage and you now have a checklist.
Another favorite is http://ciclink.com/ on this website you will find  "Best Practices for Digital Imaging", it gives the best process I have found for taking photos and documenting damage.
You should not begin writing a damage appraisal without referring to several of I-CAR's website links, the first is a link that takes you to Vehicle Makers Technical Information were they are all categorized for quick access. http://www.i-car.com/html_pages/technical_information/technical_info.shtml the second and probably my favorite is the Partial Replacement Guide http://fms.i-car.com/vehicle_technical_information/fmpro?-db=vehicle_section.fp5&-lay=vehicle_specific_sectioning&-format=index.html&-view in most cases it will take you to the manufacturers site and it shows you when and where you can properly section a panel.  The most important is the Air Bag Replacement Recommendation link http://fms.i-car.com/airbag_matrix/fmpro?-db=matrixmd.fp5&-lay=vehicle_charts&-format=index.html&-view all the information you need to make a vehicle safe again after air bag deployment is there.  If you need the documentation for your appraisal, copy and paste it to your appraisal notes for later reference.  The last I-CAR link but definitely not the least is UPCR http://www.i-car.com/html_pages/technical_information/upcr.shtml  which gives you uniform repair procedures for just about any collision repair.
The next one is http://degweb.org/About_the_DEG.html which takes you to the Database Enhancement Gateway so you can validate all those "incl's" that pop up in your estimating system.  It also will help you identify raw bumper prep and you can search by the vehicle you are writing and find out what inquiries have been made and their status.
The last one is NADA http://nadaguides.com/Cars which helps you determine the true value of the vehicle you are appraising the damage on.

Now you have some of the same information I give to those that I train through my Damage Appraisal Training classes, put it to use and you will be rewarded with more complete appraisals.

Future of the Collision Industry

Bill Park at mpoweru has created an outstanding take of the collision industry and presented it very well in this white paper http://mpoweru.co/media/3941/Design%20your%20future.pdf  Take the time to give it a thorough read, it will be well worth it.

Education Changes

There appears to be some relief coming in the No Child Left Behind Act that has paralized some technical training schools because of the SOL demands.  There are several reports about this on-line, you can google No Child Left Behind Waivers or follow this link to my local papers report http://articles.dailypress.com/2011-08-08/news/dp-nws-wire-no-child-left-behind-2-20110808_1_nclb-education-arne-duncan-education-reform My focus is on a key sentence "The administration proposes to reform NCLB by a more flexible and targeted accountability system based on measuring annual student growth on college- and career-ready standards, focusing on data and quality of teachers and principals."  I further my focus on "career-ready standards" as I believe this will help those students that do not do well in math or reading but have great capabilities with their hands.  Right now students are being pulled away from technical classes that they excel in and are put into remedial classes to pass the test.  This action has hurt the trade schools as well as the collision industry because the students are being pushed to a college ready standard versus a career ready standard.  I encourage all to once again become involved in the trade schools in your area as I believe these waivers will provide great opportunities for students that prefer to be career ready.

Managing Roadblocks

I listened to John Maxwell talk about Roadblocks http://johnmaxwellteam.com/roadblocks/ today.  In the collision industry we come up on roadblocks (constraints) everyday, how we handle them is what makes us better than the shop down the street.  In John Maxwell's short discussion on roadblocks he talks about looking and listening or maybe reading, those are the same things you can do in your shop to eliminate a constraint.  Look at why it happened, listen to those involved to develop a solution and then write it down in a book as a process to prevent the reoccurrence.

Reviewing Estimates

Before I begin any Damage Appraisal training I do my homework for those I am training.  I review ten of their appraisals and provide an audit.  This identifies the weak areas and helps focus the training efforts.  When was the last time you looked at one of your appraisers estimates?  It is a simple process, you can even use peers to review them, just don't let them go unreviewed, check what you expect and keep the playing field level.

Creative Invoicing

Same story different shop. Question - I cannot keep consistent profits in materials or labor and I am not sure why?  The answer - CREATIVE INVOICING!  What is creative invoicing, that is my term for moving $$$ around to make an invoice balance.  Management systems are helping a lot with this issue because you cannot juggle the numbers if you invoice through the management system.  But if you have an independent invoicing system sometimes matching the invoice to the estimate can be challenging and that is where creative invoicing comes in.  You take a little from paint materials or labor to pay for that part the tech put on the car that you did not know about.  It happens, you need the "LT" to go after Trailblazer and it wasn't on the estimate.  You order it, it is not enough to supplement so what do you do?  I suggest establishing an internal parts charge line to expense that part rather than deducting it from another area.  Once you start borrowing from different areas it becomes easy and it makes all your profit reports worthless.  If it is a dead expense make it appear as a dead expense and it will show up in net, where it should be, but don't steal from other entities.

Importance of Defining a Job

I have been in a shop the last couple of days helping resolve some administrative issues.  The biggest issue I found was that their individual jobs were not defined, no separation between each individuals tasks and that they mostly worked to keep the fires to a smolder.  When I presented the Customer Service Representative with a job description and the related tasks that went with the description she was elated.  She was elated because she now knew where to focus her attention, she knew when something wasn't within her control and she knew what was required of her.  I also sensed a bit of relief because previously she was working through whatever was handed to her and never felt she had completed anything.  Job descriptions are not difficult to create but make a world of difference to the employee.  When you combine a job descriptions with a task process list the employee becomes employed not just hired. 

Make sure you are employing people and not just hiring them, there is a world of difference to them and your business.

Back to Basics

I was reading Alan Weiss' http://summitconsulting.com/ Monday Morning Perspective this morning and the quote he offered fit the thoughts I was working on getting ready for my day.  The quote is from Philosopher George Santayana and in the quote he defines a fanatic as "Someone who redoubles his efforts when he's forgotten his aim".  How often are you finding yourself spinning your wheels trying to reach your goals?  If you find yourself doing that often maybe it is time to go Back to Basics.  Redefine your goals using the processes you have gotten away from because you have been too busy spinning your wheels.  By sharpening your aim, applying your processes you will get out of fanatic mode and be more productive.