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Reducing WIP to Make Profits

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There’s a reason why the company-wide vision statement of LaMettry’s Collision is, “Leading the automotive repair industry with commitment to the finest workmanship and treating all people and vehicles with the utmost respect.”

Even before the creation of that vision statement, the sentiment was already a guiding principle of the family-owned, nine-location operation in Minnesota.

It’s evident in the way CEO JoAnne LaMettry, the entire LaMettry family, and president of operations Darrell Amberson have helped grow the business and diversify along the way.

It’s evident when you consider the OEM certifications, the involvement in the industry, the early adoption of advanced paint-drying equipment, the emphasis on training and the standardized processes that LaMettry’s has championed.

Continuous improvement is simply ingrained in the very fiber of the company, and it’s helped the operation remain one of the most progressive in the industry.

That pursuit of improvement is exactly why work in process, or WIP, has become so important to the shops in recent years. Defined as any vehicle that’s in the shop or a repair order that has parts on it, WIP is instrumental in reducing unnecessary inventory, increasing touch time, raising efficiency, and decreasing cycle time.

Building out the target WIP for the shops—by looking at the total number of book hours the team could produce per vehicle per day and using that as the foundation to determine capacity—illuminated to LaMettry’s the importance of properly scheduling vehicles, and the balance between under and overscheduling.

By making changes to their processes, KPIs were improved across all facilities. And at the Eden Prairie location, roughly 20 minutes from downtown Minneapolis, Eric Johnson serves as general manager of a facility that now fixes 80–100 cars per week.

 

The Backstory

Johnson started at the Eden Prairie location of LaMettry’s Collision 26 years ago. As general manager for that location over the last decade, he has helped tweaked repair processes and maintained the shop’s services before eventually becoming general manager for five of LaMettry’s nine location in the southwest region of the Twin Cities.

Johnson says the high-volume location, which has a 17,000-square-foot building with 35–40 employees, has always worked to improve upon making the overall collision repair experience a convenient one for the customer.

 

The Problem

As outlined, the shop has always succeeded in high customer satisfaction and high volume. But to ensure those remained consistent, Johnson says there was one area of the process that the LaMettry’s noticed was holding repairs back from being finished quickly and preventing an even larger goal—no supplements. The management team wanted to reach a point where the team only submitted one parts order throughout the repair.  To do that required a smooth disassembly and complete teardown process.

As LaMettry’s tweaked the repair process to achieve the goal of one parts order, they realized that WIP could be better managed at the Eden Prairie location, particularly as a means to reduce cycle time. That would help address a common issue in the industry, which is cars sitting on the lot waiting for repairs.

“The amount of work you have on the lot can really make a difference in productivity,” Johnson says.

In turn, poor productivity can affect overall sales. The shop noticed that during times when the light- and hard-hit repairs were not balanced correctly, rental costs increased.

The LaMettry’s team realized that if it started a more thorough disassembly process in the shop and made sure every car was being taken apart “down to the nuts and bolts,” then not only would it shave time off the cycle time by avoiding delays or stops in the repair, it would also, by default, guarantee only one parts order.

 

The Solution

LaMettry’s first introduced a new process focused on blueprinting and disassembly to the team at the 15-technician Eden Prairie location. Changes to the old process included a blueprint for the final bill; taking photographs of parts that needed to be replaced; bringing in parts carts for parts to be sorted by damage or replace and stacked; and focusing on spending more time in disassembling the car when it first comes into the shop.

The teardown process now includes the following steps:

  • Get permission from insurance company or customer.

  • During teardown process, add a parts carts and a table with the parts laid out and all labeled.

  • Designate a repair plan manager who is responsible for the blueprint. This person photographs everything and works with the technician for the blueprinting process. The repair plan manager also will update the insurance company.

To improve WIP, LaMettry’s also decided to designate one manager for scheduling. One year ago, Johnson assigned the former production manager to act as schedule manager in order to better nail the balance of scheduling work in the shop, he says.

The manager now follows a day-by-day process and adjusts the amount of small bumper jobs compared to bigger hits each day, depending on how many cars are in the lot.

Johnson and his manager have learned over the past year that if scheduling is not looked at on a continuous basis, it can cause problems and cause cars to sit in the lot for a longer period of time.

The scheduling manager looks at the number of vehicles scheduled, hours on each job, and the number of potential hours a job will have after the blueprint. Those areas are weighed against what is currently in production.

Vehicles are prioritized if they are not production ready and if the vehicles have not been blueprinted, do not have approval or parts ordered.

 

The Aftermath    

LaMettry’s implemented the addition of a designated scheduling manager first at the Eden Prairie location because it was a high-producing shop. The rest of the LaMettry’s locations could also implement a similar process.

With one person scheduling all the jobs coming in, the team learned that change can be difficult and that they definitely need a faster response time when giving customers the scheduling options.

Today, the shop has an average weekly car count of 80–100 vehicles. The shop’s cycle time is typical of the industry.

 

The Takeaway

In order to handle the difficulties, Johnson says all team members need to be diligent and use good communication. An important part of the process, he says, is communicating how the scheduling works with the customer and within the team. Johnson and his team explain to customers what a blueprint is, what it means if the car is in disassembly, paint or body.

For communicating as a team, it’s important that everyone knows what cars are in production.

For better communication, the team focuses now on auditing and scheduling two meetings each day with the staff. In the daily meetings, the managers make sure customers have been contacted, the team knows which vehicles are scheduled to be delivered that day and the following day, and which files need more attention than others.

 

SHOP STATS: LaMettry's Collision  Location: Eden Prairie, Minn.  Operator: The LaMettry family  Average Monthly Car Count: between 80-100 cars at Eden Prairie Minn. location Staff Size: 35-40 (15 technicians, 6 estimators, 2 parts manager, 1 assistant manager and 1 manager, 5 office staff, 2 detailers, 2 in shop support, and floating positions include maintenance worker, customer shuttle drivers, booth cleanup and shop cleanup employees and a couple dealer representatives)  Shop Size: 17,000 sq ft;  

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