Making Big Changes at One Time
When the Auburn Collision Center, located in the small community of Auburn, Calif., threw open the doors of their newly updated shop in 2007, signs of change were everywhere: The new digs more than tripled the old square footage, and the shiny new 26-stall operation boasted a host of green innovations.
But the biggest change required neither additional space nor equipment. That transformation was a move from a traditional Monday-through-Friday schedule to a six-day workweek. To give customers Saturday service, technicians were asked to work 10-hour shifts, four days a week. And as the announcement neared, shop manager Johnnie McGillivray braced for the worst.
“People said I was crazy to move to this schedule,” he says. “They said it would never work.” And there was a little bit of mutiny among techs at the beginning, McGillivray admits. But once dealership management explained an obvious upside—despite working the same number of hours, techs would feel as though they had an additional 52 “days off” each year—the tide began to turn. “Suddenly, when we put down on paper how the guys benefit from it, well, things changed,” he says. Now, he says, his workforce wouldn’t have it any other way. “They love it,” McGillivray says. “There’s no way they’d go work somewhere else where their schedule would be five days a week.”
—Tim Shepelak, business coach at The Growth Coach
The dramatic scheduling change was only one of the massive overhauls that Magnussen Toyota dealership owners put into effect. The new collision center is loaded with green innovations, from solar panels that supply 70 percent of their energy to a comprehensive water reclamation system. The shop went from 8,000 square feet to 30,000, and the returns on their investment—in both technology and people—were evident right away.
Adding another day in the workweek, plus splitting technicians into shifts, cut two days off the shop’s cycle time, and sales rose from $383,000 at the smaller shop to more than $500,000 a month in the new facility. Although the rise in sales was welcome, McGillivray says the expansion was largely to serve customers better and provide a means for future growth. Savings from the new, green technology contributed to profits, too. The solar panels alone save the shop nearly $7,000 a month on utility bills. But attaining these goals took forward thinking, and a spirit of cooperation from their workforce.
The decision to expand the dealership-owned operation was an easy one. “We opened the new shop for a simple reason: We had customer demand,” says McGillivray. “We were growing 20 to 30 percent per year when we made the decision.” McGillivray, who has managed the shop since 1999, had a lot of input, along with dealership owners, who paired ambitious goals with a fiscally responsible approach. “From the time we started talking about it to actually breaking ground and opening the doors, was probably about four years. The owners wanted to make sure they had enough volume to fill it and the potential for new growth before they invested the money.”
New for the crew. The first order of business was figuring out how to keep the shop open on Saturdays without driving away his workforce. “In order to be open six days a week, you need to find coverage so you’re not paying people overtime or burning people out,” he says. Four-day shifts just made sense. “A technician will waste a half hour in the morning before he starts work, and he’ll waste a half an hour at the end of the day cleaning up,” he explains. “You do that times 15 technicians, and suddenly you’re missing out on a lot of production time during that week.”
So McGillivray decided to stagger the shifts. One crew would work Monday through Thursday, another Wednesday through Saturday, with everyone working 7 a.m. to 6 p.m. “The tough part was that I had to decide who was going to get the first shift and who was going to work Wednesday through Saturday,” he says. But, it turned out, that puzzle solved itself. “We already had eight technicians here when we decided to expand,” he says. “So when we hired new technicians, we explained that the work schedule was Wednesday through Saturday, take it or leave it. If [a new hire] didn’t like it, he didn’t have to come to work here.”
Most of McGillivray’s bodymen tended to arrive at the shop early, he says, and none seemed to mind staying a little later in exchange for an extra day away from the shop each week. Fifty-two additional days of free time every year is powerful incentive, it turns out, even though employees actually work the same number of hours over the course of a year.
Benefits for the business. Tim Shepelak, a business coach at The Growth Coach in Cincinnati, isn’t surprised that McGillivray’s workforce was attracted to the new shifts. Flex time is seen as a high-value benefit—one that can give a company an edge. “As we all know, getting the right people into your company is getting more challenging because the workforce is aging,” he says. “So everyone is in competition for the best employees. One way to compete for those employees is to offer attractive working conditions such as flex time. If it’s between you and another place to work and the candidate likes the fact that you offer flex time, you might be the employer of choice.”
Having two shifts working during the week does pose potential problems, McGillivray says. The logistics require smart leadership on the floor. “Let’s say a $5,000 job rolls in on Wednesday afternoon,” he posits. “You sure don’t want to give it to the A crew, who’s getting ready to leave for a three-day weekend, because then that car will be torn down and it won’t be able to start work until that following Monday.” Organizing his men in intelligent ways has also sped up the shop’s cycle time by two days, which allows them to bring more cars through and increase profits “We all know how important cycle time is in today’s world,” he says.
Although the shift was a dramatic change for the staff at the collision center, dealership vice president and general manager Tony Toohey says it was really a no-brainer. “The simple truth of the matter is that the new schedule is much better for everybody. We started it in the body shop when we opened up the new facility, but we’ve been doing [six-day operations] in the service department for 15 years.” Toohey wasn’t willing to invest in a new shop without a six-day-a-week schedule. “I gave them two years of warning on the deal,” he says. “By the time it happened, it was a fait accompli, and the guys knew that it would work because they’d seen the service guys doing it.
“And,” he adds, “they have an incredible amount of time off.”
Customers are obviously pleased with the arrangement, giving the shop CSI scores that hover between 97.2 and 98.1. “We’re very happy with those,” says McGillivray. “They’ve improved with the new hours, most definitely.”
Once the issue of staffing was settled, Auburn’s owners—Bernie Magnussen and Toohey—focused on a move to green technology. Although many of the innovations they installed in the collision center required up-front investment, the owners knew they’d eventually reap profits by thinking long-term (see the “Footing the Bill” sidebar for more on the shop’s long-term financial planning). They contacted Pacific Gas and Electric, the natural gas and electric utility for central and northern California, for guidance. “We put our heads together to come up with a plan,” says McGillivray. “We knew if we did smart planning at the beginning, it would pay off down the road.”
Reach for the sun. Solar panels were the first order of business. “At the time, our utility bill at the dealership was $10,000 a month,” says McGillivray. Installing solar energy sources cut costs by more than 70 percent, a figure that will continue to grow as the dealership pays off the investment costs. “In 2007, when they did the solar stuff, they were getting all kinds of rebates and funding from the federal government and the state,” he explains. “That’s money going back into the business.” Although the panels aren’t paid off yet, McGillivray says their current utility bills are already slashed, currently running about $3,000 a month.
Light it up. To further cut costs and save energy, a smart lighting system was installed, using a 440 current that uses less electricity than standard 220 or 110 setups. “It takes a little bit of power to kick these lights on—it can be up to five minutes for them to hit their stride—but once they’re lit, they run on very, very low voltage,” he says. The building also boasts state-of-the-art insulation and efficient heating and cooling systems.
Paint it right. Energy wasn’t the only arena where the shop, which services 300 cars a month, got a green makeover. Waterborne paint systems were installed, and water conservation became a priority, with low-water landscaping—think cactus and other succulents—planted around the facility. An in-house water reclaiming system recycles water and siphons it into the sewer system instead of channeling it down the storm drains, preventing tainted water from reaching pristine waterways. “Once it goes into our reclaiming system, it gets recycled, separating the oils and the dirt, and then we reuse it to wash cars,” McGillivray explains.
Though the green technology was installed largely because it made sound business sense, “It feels good,” McGillivray admits. “We all know what a facility looks like when you’re washing cars and the residue goes down the drain.” And in the end, it all comes back to the customers. “We’re in a rural area, and a lot of the locals are very environmentally aware. They care about the community and the land.” It only made sense for the shop to follow suit.
For the management at Magnussen Toyota, the trick has been to find ways to make employees and customers happy while paying attention to the bottom line. So far, their strategies are working: Unconventional scheduling and green initiatives are paying off for everyone.