Adding An Express Lane
Efficiency continues to be the name of the game in the collision repair industry today.
FenderBender sat down with Tom Hoerner, strategic initiatives manager for BASF, to talk about the value that exists for shop owners when an express lane is implemented in their facility.
Express lanes help shop operators segment their business by putting smaller claims into one area of the shop and delivering one-day repairs. The whole idea is to move manageable repairs out the door as quickly as possible.
Express lane repairs are typically smaller jobs. They should require no more than 10 to 15 hours of labor and don’t require any structural repair. The job should be fully blueprinted. Parts should be on the premises.
You will want to have about 30 percent of your work qualify for this type of repair for an express lane to make sense. An express lane may not be right for you if you have a shop that is mainly set up to do heavy hits. Typically, about 30 to 45 percent of a shop’s work would fit into an express lane.
Having an express lane is a selling point that will allow you to get more work. The industry average cycle time on repairs today is 12.3 days per vehicle. If you want to compete for business from insurance companies, you better be doing something to become more efficient.
If you’re able to regularly do a few repairs in only one day, your cycle time drops drastically. Let’s say you repair 20 vehicles in a given month with on average a 12-day cycle time. If six of those jobs are one-day express repairs your average cycle time drops to 8.7 days.
Insurance companies are going to do business with shops that can cut their cycle time down. There’s a direct connection between the amount of money insurers pay to claimants and the number of days the claim is open. That means insurers save big every time they reduce cycle time. Implementing an express lane is the quickest way to cut cycle time.
There are a few other benefits that accompany express lanes, too. As cycle time drops and efficiencies increase, gross profit per tech hour will also increase. Every time shop operators make an improvement to their shop, the payoff shows up in their gross profit per tech hour. That’s a great number to know in order to understand how much the process improvement has paid off. In addition, there’s a huge difference in customer service indexing scores if shops are able to deliver vehicles in one day versus three, five or more.
Express lanes help shops get cars out their door quicker. In turn, this allows them to get paid quicker for their work. I can’t imagine why somebody wouldn’t want to implement an express lane. The winning shops out there are doing just that.