How to Slash Your Small Shop’s Cycle Time
In a collision repair industry where workload is based on accidents and the unforeseen, consistency can seem like the antithesis of a shop owner’s typical day. Yet, as most shop owners know all too well, consistency is an increasingly critical factor in meeting consumer demand for quick repair turnarounds, as well as in meeting DRP cycle time standards—and, of course, adding black to the bottom line.
“Cycle time is the newest wrinkle challenging collision centers today,” notes Jim Berkey, business solutions director for PPG Industries.
In the past, an efficient system was one in which technicians were kept busy by always having additional cars in the shop to turn to if they could not continue working on a single car for one reason or another. But the industry’s growing focus on cycle time is challenging shops to move instead toward continual work on a single car—to push it continuously from evaluation and disassembly to production, paint booth, reassembly and detail.
What was once seen as efficiency, then, is now seen as a loosely structured repair strategy in which, says Berkey, “processes have not been reliable enough to allow us to start a car and work continuously until it is complete.”
Cycle time is essentially a mathematical relationship based on the output rate of the shop and the total number of cars in process at a given time, Berkey explains: “For a given shop output rate, every time you increase the number of cars in process, you increase the average cycle time.”
And it’s just a matter of time until consumers, themselves, take improved repair cycle times for granted, Berkey notes. “We’re an impatient society. We don’t want to wait on anything today,” he says. “Cycle time requirements have hit other industries; now they’re hitting this industry. And from what we’ve seen, once it hits, it doesn’t go back.”
Adds Tim Magee, co-owner of Mississippi’s Advanced Collision Service, which has used PPG’s Throughput Performance Solutions (TPS) Green Belt efficiency program—one of several paint-vendor “value added” services available for body shop owners—to cut cycle times at two of the company’s four shops: “I think the most important thing [shop owners] need to realize is that, first and foremost, you need to get control of your input. Everything with TPS is about getting control of the process.”
At approximately 8,000 square feet each, Advanced Collision Service centers in Hattiesburg, Gulfport, Bay St. Louis and Ocean Spring might not seem big enough to profit from a cutting-edge system based on Six Sigma and Lean Manufacturing concepts. But Magee not only thinks otherwise, he has proven it with cycle-time success—first at the Hattiesburg shop and most recently at the Gulfport store as well.
Magee had previously decided to try a new efficiency paradigm at his Gulfport shop after attending a basic seminar on TPS. But he quickly found that one brief seminar did not give him the necessary training to implement an entirely new system in an existing shop. So when PPG introduced its expanded TPS green-belt training program to help collision centers improve cycle time, Magee jumped at the chance. Not only did he get a lot more information from the five-day, skills-based training session, he decided that, this time, he would try it again at the new Advanced Collision Service center being built in Hattiesburg.
Guided by the TPS program, he carefully hired employees who were open to a new way of doing business, set up the shop in a lean framework and began training employees before any cars even came in. Still, Magee said, “It took about two months before they really got in the swing.” Even though the technicians were new to this shop and understood many of the changes, they’d come up under the industry’s past way of doing things, so they also had ingrained habits that had to be changed.
“If you always do it the same way, you’ll always get what you always got,” Magee notes. “We wanted them to look beyond that.”
And that meant focusing on what it takes to reduce cycle time—on one single car at a time: If six vehicles were coming in, then six vehicles also had to go out that day, and if the shop couldn’t manage six vehicles consistently, then it needed to drop back to five until it could. “The biggest key and the hardest thing to do is to not look at individual technician efficiency, but to look at units flowing through the shop,” Magee explains.
The paradigm change also meant operating in a lean physical space, and in Advanced Collision Service’s case, even the word, “lean” might be an understatement. The Hattiesburg shop is 7,800 square feet, for example, and, Magee says, “It is laid out to the point where there is no dead space. Certain pieces of equipment go in certain places.” Every wall has a door every two feet; there are no toolboxes against the walls; and the parking lot has space only for employees, cars waiting for slots, five totaled cars and four customers.
SETTING LIMITS FOR SMART GROWTH
By limiting the extra space, the shop forced efficiency on itself, Magee notes—an efficiency that will stay under control even as the shop grows. “We will build processes for [customers] to come in at different times,” Magee says, for example: If there are four cars to be delivered, they will be scheduled so that they are not all being brought in and dropped off at the same time. “Most body shops would never even look at that,” he adds. But such efficiencies not only maintain control and improve cycle time, they make it easier on the employees. “The receptionist doesn’t want to have 10 customers coming in at the same time on a Friday afternoon,” Magee says.
While Magee’s goal is to grow Hattiesburg to a $3 million-per-year shop, “I want to control the $3 million, not have it control me,” he said. “If I say I’m going to do five cars, I want it every day.” The shop is currently producing at $1.65 million, he said, and “we’re controlling that $1.6 very comfortably.”
If a shop is having trouble controlling consistency and improving cycle time, it needs to ask itself a couple of basic questions, Berkey says: “What is keeping me from working on this car continuously?” and “What has to change in order for me to work on it continuously?”
A number of things have been proven to affect a shop’s ability to work continuously on a single car, he notes, with the leading contributor being the inability to identify all damage, and order and procure all of the right parts so technicians have everything needed to start and finish the repair. Required process changes become obvious, since the principles behind continuous flow are not complicated. The most significant change is the leader’s ability to create and maintain change in the organization and its processes, Berkey says.
At the same time, in the collision repair industry, Berkey says, “there is no way of getting around the fact that there is a high degree of variation. So we need to control those portions that we can, and make our system flexible enough to handle variation that we cannot change.”
Putting that into practice at Advanced Collision Service’s Hattiesburg shop, meanwhile, has been a long, steady, daily process. The shop has now been open for a year, and “for the first time last week,” Magee says, “I turned it over to a manager.”
ONE DOWN, THREE TO GO
With cycle time success in hand in Hattiesburg, Magee has turned his sights back to the Gulfport shop, and, after only six weeks on the new system, that shop is already showing improvement in revenue, customer satisfaction ratings, on-time delivery, return rate and overall quality—improvements well beyond even Magee’s expectations. “The things I thought we would suffer in, we haven’t,” he says. He would have expected, for example, that quality would slow down at first and that his Customer Service Index (CSI) rating would drop as well. But quality actually improved from 97.1 percent to an almost perfect 99.2 percent, and every CSI showed gains.
Magee is still anticipating that there might be some drops as the system continues stabilize in Gulfport, but, he adds, “I also might be astonished to continue to see it go up.” Because this time, he said, “We’re taking the time to do it right.”
For other shops thinking about implementing cycle-time improvement systems, meanwhile, Berkey’s advice is simple: Get some help from experts and get going! “We see the industry getting more and more oriented around performance. It can be a considerable opportunity for those who get started and a considerable threat if you don’t,” he says. “And, given the fact that the changes improve efficiency, there really is no reason not to get started.”
The Hattiesburg Payoff
- Six lessons learned from a new efficiency paradigm
Measure your success
Problem: When Magee implemented the shop’s new program in Gulfport, he says, “We had no way of scoring where we were or where we wanted to be.”
Solution: After an in-depth green-belt training program, Magee had a clearer understanding of measurement and the importance of maintaining a consistent system to track how well the shop is doing, what areas still need improvement and whether or not the system is even succeeding. Shops will often see significant results in three to six months, says Berkey.
Give it time
Problem: In Magee’s first attempt at his Gulfport shop, he tried the system for about six months, then gave up. Later, Magee was told that there is no absolute on how long implementation will take, and was instead asked to ponder shop-environment changes.
Solution: In Hattiesburg, Magee said, “I took on an outlook as an owner that it wasn’t going to happen overnight.” Magee’s eventual goal for the shop is $3 million in revenue: “I don’t have a time limit, but when I reach that goal, I’ll be doing it consistently.”
Maintain consistency—every day
Problem: Too often, employees are tasked with schedules that they just cannot maintain. Although it is managers who do the scheduling, Magee said, “Technicians take the brunt of us overscheduling.”
Solution: When a technician comes in to work at Hattiesburg or Gulfport each day, he knows that he will be responsible for getting six cars out the door, Magee explains. The tech’s day is load-leveled, so he doesn’t have the stress of not knowing what each day will hold—all part of a new focus on shop output, rather than individual efficiency.
Create a culture of teamwork
Problem: Much of the industry is still focused on the productivity of the individual technician rather than the cycle time of the vehicle, and redirecting this focus requires a complete cultural change within the organization.
Solution: Because Hattiesburg was a new shop, Magee was able to hire for TPS from the start and train technicians on the process of continuous work on a single car. “We built a culture of people who are concerned about workload,” Magee says. The same can be done in an existing shop, too, as long as the process is part of it.
Keep it lean—inside and out
Problem: Shop and process organization are not deeply ingrained yet throughout the industry, but that kind of organization is a basic requirement for successful implementation of a new efficiency system.
Solution: As part of setting the stage for a new paradigm, not only does every piece of equipment have a specific place in Magee’s Hattiesburg shop, with every inch dedicated to a specific item or process, the store’s parking lot is just as lean. A lean emphasis forces the store to maintain consistency and keep cars moving through.
Try, try again
Problem: The first go-round at Gulfport was unsuccessful, gradually regressing to its former stagnation.
Solution: On his second try, Magee came in with a strong foundation for improvement; he had learned many lessons at the Hattiesburg shop; and he was now willing to give it the time it would need at a second, existing location. Only six weeks into the Gulfport makeover, the shop has increased monthly revenue from $235,000 to $300,000, one of many performance improvements.