Refine Your Production Process to Increase Throughput
Back in 2004, when Keith Graham established Ron’s Automotive Collision Center, he went in with what he knew best.
“My dad was a recruiter for a while for the healthcare industry, and this was his perception of where the [body shop] industry was heading,” says his son, Tyler Scott Graham. “Back then, he understood the big picture of working with insurance companies, learning how they wanted their programs established. He decided to go that direction, versus being an independent non-DRP shop.”
Likewise, Graham came into his father’s shop from another industry: the manufacturing world. While his father understood insurance and relationships, Graham understood assembly lines. Organized inventory. Parts monitoring. Timeliness.
Even with that expertise in his back pocket, “timeliness” wasn’t exactly the shop’s mantra in the beginning. During his early days, if 24 cars came through the shop in a given week, Graham says estimates were ready for only four of them. But after years of fine tuning the blueprinting process, he cranked that up to eight cars, then 16 cars, to now all 24 cars being ready to jump right into the repair process the day they arrive.
“By Monday, we know all the labor hours, and it’s easy to lay out between four techs how to get things done in a five-day work week,” Graham says.
So while his father oversaw the evolution of the DRP, Graham oversaw the evolution of the shop’s production process, and now those two styles have coalesced at the $3.5 million shop. Graham’s father credits the shop’s 60 percent rise in sales over the past five years to his son’s rigorous pre-production process, which sets up the Ron’s team to push out between 80–100 cars each month. Here’s a breakdown of how Graham makes sure each vehicle is ready when it heads into the production cycle on Monday morning.
Write the estimate.
In the beginning, Graham has to admit: He was hurting the shop more than he was helping.
"It took 2–3 months to get used to it,” he says about his early days as the shop’s estimator. “I didn’t know what it meant to cut in parts.”
Because of his father’s great relationships with insurers at the time, a heavy amount of work came into the shop when Graham started in 2006. Yet, it wasn’t until Wednesday—when the more experienced estimator picked up Graham’s slack—that many of the scheduled vehicles would even receive an estimate. Then parts wouldn’t get in until Friday. Then supplements would hold up the job until the following week. Then customers would be unhappy, because a job that should get through the shop in 12–14 hours has now been at the shop for two weeks.
Graham was unhappy too—so he made some changes.
Now, in order to make sure parts are ready the following week when the car moves through the shop, Graham records estimates for each shop. Stressing the importance of punctuality, Graham always shows up five minutes early for scheduled estimates, and gets them written within a 30-minute window.
In that 30 minutes, Graham sets up a car rental for the following Monday and manages the customers’ expectations about the repair time frame.
Order the parts.
Then the teardown team will work the vehicle, take pictures and check on paint codes.
“No matter who it is, I'm always taking the car apart the day they drop it off, finding whatever additional damage there may be underneath, and getting parts ordered that same day,” he says.
Graham ensures that the shop already has a signed declaration to pay from all his customers, so for the jobs he plans on completing between Monday and Friday the following week, his prepper can cut in all sheet metal parts by the end of the week.
“So say the job I'm writing is a bumper, headliner, hood, fender, and some painting on some adjacent stuff,” he says. “By Monday morning, I can get that car into the shop by noon, have it ready to be painted by Tuesday morning, reassembled Wednesday. It easily becomes easily a 15–20 hour job.”
Because his shop is a sole vendor company with distributors, it has a good relationship with local parts vendors. Instead of price matching to find the best part, Graham is able to rely on his vendors for quality pricing and timeliness in any given situation.
“We rarely wait long for a part,” he says. “We get it the next morning 90 percent of the time, so supplements don’t slow us down.”
Adjust for insurers.
With the shop’s DRP-heavy approach, Graham has to constantly keep insurers’ expectations in mind to ensure every box has been checked before a job moves into his shop on Monday morning.
“Different insurance companies want different things,” he says. “State Farm doesn't want you locking your estimate until you actually have the car on your premises and are fixing it. And Allstate and Nationwide want a drive-in estimate written and sent to them so they can get rental numbers together.”
Part of the shop’s evolution with its DRP programs has been setting customer expectations. Because each insurance company has different expectations, the experience may be different from customer to customer. Because of that, Graham will outline a timeframe that coincides with each insurers’ agreement with the shop.