Creating the Repair Plan Network
Hecky Heckendorf has spent nearly his entire life in the collision repair industry, first with his father’s paint distribution company and later as the owner of his own business, Colorado-based Painters Supply Company. Through it all, he’s seen firsthand the decline of independent shops.
“It was easy to see,” Heckendorf says. “There was an MSO [in our area], and there was a great [independent] shop two blocks away from that MSO, and you could see the work being taken.”
Heckendorf wanted to come up with a way for those small shops to compete with the up-and-coming large repair companies. So, working with 30-year bodyman Brad Fukui, Heckendorf set out to create a universal repair plan that would allow independent shops to repair vehicles with higher quality and efficiency, attracting more work from both insurance carriers and customers.
The result: Repair Plan Network (RPN), an organization formed in 2008 that today is made up of 16 Colorado body shops that have adopted uniform repair processes.
Two RPN shop operators—Tom Constant, general manager of McDonald Collision Center in Littleton, and Tony Perry, owner of Morse Evergreen Auto Body in Evergreen—spoke with FenderBender about a few of the plan’s key aspects, how they work, and the success they’ve produced.
Consistency is Key
RPN is essentially what its name suggests, a network—a group of shops using the same technology and procedures to repair vehicles.
To join, member shops contact RPN for an initial consultation. If both parties agree that the relationship would be a good fit, RPN overhauls the shop’s repair structure, with a focus on implementing more efficient processes. Once the overhaul is complete, the shop becomes a part of the network and works regularly with consultants to maintain efficient operations. Shops can participate on different levels depending on how much assistance is needed. Monthly membership fees range from $500 to $3,000 depending on the level of service, shop size and the number of employees.
The network aspect is what gives RPN shops an advantage. The organization has strong relationships with insurance carriers because of consistent standards for repair quality and performance. More simply, the RPN name carries weight, allowing member shops to compete with MSOs that carry similar clout across multiple locations.
What drives the high standards at RPN shops is the uniform operating system, a step-by-step plan that encompasses workflow, team building, compensation, and shop culture.
Loading the Slingshot
When Constant and Perry joined RPN in 2011, the first step for both shop owners was to concentrate on workflow. They started by implementing a thorough blueprinting process.
When a car comes into the shop, a complete teardown is done. An estimator monitors the whole process, writing an exhaustive breakdown of parts that need to be replaced to avoid any supplements.
When the parts come in, the new parts get mirror-matched with the old ones to ensure no mistakes were made and the car is completely ready to be repaired.
Then the vehicle moves through departments—first to the body department, where the repair is made; then to paint; and finally back to the blueprint department, where the vehicle is reassembled.
This shop flow, and more specifically the blueprinting process, sets up the entire repair, guaranteeing that all of the damage is documented and the right parts are ordered. So when a repair begins, it never has to stop because of an error.
“You’re basically loading these things up, having all the parts here,” Perry says. “It’s like loading up a slingshot—you let it go, and it doesn’t stop once it goes from there.”
Taking the time to load the metaphorical slingshot allows more cars to move through the shop without bottlenecks. Constant, for example, says McDonald Collision was doing anywhere from 150 to 170 repairs per month before implementing the process. Now the shop averages 210 repairs per month.
For the workflow model to function, a team system is used.
At Perry’s shop, for example, there is a body team consisting of four techs and one apprentice. He has a paint team made up of three painters. Then he has a front-office team, which is composed of two estimators and two detailers.
Each team is responsible for completing a specific aspect of the repair process. For example, Perry’s body team handles blueprinting, repairing and reassembling the vehicles. Perry rotates his techs between those segments every 60 to 90 days to promote versatility. So if blueprint is backed up, the techs in body repair can shift there to help get the work done.
The techs work together to find the most efficient method to complete the repairs they have lined up. This system stands in stark contrast to a traditional shop, in which a technician manages his or her own repairs from teardown through reassembly.
According to Perry, the team concept increases efficiency because his staff is working together, checking each other’s work and educating one another on faster ways to get repairs done.
“If they see someone struggling, they’re going to be right there,” Perry says. “In the past it was more of a dog-eat-dog world.”
Since Perry implemented teams, he has seen overall cycle time drop from 10.45 days to 7.3 days and touch time increase from 2.7 hours to 4 hours.
In order to convert to a team system, technicians, in particular, need a financial incentive.
Before the team setup, Constant paid technicians on a basic flat-rate commission system. But with a team, it becomes difficult to determine who is responsible for producing individual hours.
“How much of that percentage is each individual worth? There are various levels of skill,” Constant says. “There are various levels of efficiency. You have to quantify that, and you have to give everybody a real value.”
To determine that real value, Constant evaluated his shop’s numbers last year before joining RPN. He concluded that he paid 42.7 percent of all body labor sales during that year to his body techs. Then, he looked at each technician’s efficiency over that time, comparing his or her total hours billed with total hours on the clock. Once he had the numbers adjusted to represent a typical eight-hour workday, he was able to determine the percentage each technician had contributed to all of the hours billed over the last year. He used that percentage to figure their portion of the 42.7 percent.
For example, out of eight techs, his top-producing tech accounted for 16 percent of all body labor hours charged last year. In the new pay system, that technician takes home 16 percent of the entire 42.7 percent that is allocated to the body team. The team meets twice a year to reevaluate percentages
“At that meeting, any technician has the right to present their case for an increase,” Constant says.
Theoretically, the incentive is that the body technicians are able to push more work through the shop than they were ever able to on their own. So, as the body team’s billable hours increase, each technician’s pay increases accordingly.
“If this works, and we are more efficient and more profitable, you’re going to get that money over and above your averages,” Constant says.
Since using this system, developed through RPN coaching, the shop has seen consistent growth. In 2012, sales topped out at $4.5 million, an increase of nearly 26 percent from 2011.
More than Money
The incentive for employees is more than financial. Both Constant and Perry argue that a team system gives their employees a stronger voice within the company.
“You empower the people who are doing these repairs to manage these repairs, and then they manage each other,” Constant says. “They are now accountable to each other as part of the team.”
At first, Constant says employees had trouble understanding this. They were used to being told what to do, but he wanted them to feel empowered to speak their minds.
Not everyone made the cut as the company went through this transformation. Both owners lost employees.
“It really does weed itself out,” Perry says. “It really makes guys look at themselves and look at each other a lot more, and it makes them want to build a better team around themselves.”
But Perry and Constant believe that those who decided to stay found more financial and personal fulfillment.
“At the end of the day, hopefully they can walk away with a career or a technical application that is now more efficient, less stressful and more financially rewarding,” Constant says.
Though every RPN member is in Colorado at this point, Heckendorf is expanding the program nationwide. He is also working with repair professionals in the U.K. to eventually equip RPN shops with some of the latest technology, such as robotic drying equipment. The young program is still evolving, but Heckendorf thinks it is accomplishing what he set out to do.
“We can take [a] shop, and we can get them into a position where they are profitable, where it gives the owner some quality of life,” he says. “It allows them to work on their business as opposed to in their business. We can take any shop from the very basics to that.”