Success Using Lean Principles
The Collision Center at Driver’s Village in Cicero, N.Y., was always meant to be a lean, mean, car-repairing machine. The shop had an unusual start: It was part of an auto mall that arose from a languishing strip mall. And it had a great location between two major highways near Syracuse. But the initial manager’s lack of finesse with people and processes proved to be a dead end on what should have been a speedy drive toward an impressive bottom line. The owner, a new manager and a renewed commitment to training and lean Green Belt principles are now re-routing this shop’s map to success.
Retail Roots, Great Location
When a strip mall dies, most people see a sad, vacant space waiting to be vandalized. That was very nearly the story of the Penn Can Mall in Cicero, N.Y., which lost its anchor stores in 1996 and languished—unused and, yes, vandalized—until 2000. That’s when Roger Burdick capitalized on the expansive 92-acre property and fantastic location to create Driver’s Village. The auto mall now has about 15 dealership franchises in a 450,000-square-foot area of the mall, and sells used cars as well. The auto mall has other tenants, too, including a gym, a couple of car rental places and, of course, the Collision Center at Driver’s Village.
The 35,000-square-foot shop has 25 employees. With three paint booths and three frame machines, the shop repairs about 60 cars a week.
Help From PPG
From the get-go, the Collision Center was conceived by the initial manager as a lean production shop. Several of the shop’s employees attended PPG’s MVP Green Belt Training program, which taught them to design and implement processes aimed at a simultaneous improvement of quality, speed and cost of operations. But that first manager’s style didn’t foster harmonious working relationships or efficient work flows. Employees stopped following the processes they had learned, and nobody followed up to get them back on track.
That led to a lot of inefficiencies and wasted effort. Cycle time for repairs was more than 6 days, and there were often more than 80 cars in process at a time. Sales were $275,000 per month, and 90 to 95 percent of those dollars came from the Driver’s Village dealerships, rather than direct repair or walk-ins. It was time for a new manager, one who would take advantage of the management tools and consulting help that PPG had to offer. It was time for someone to put the Green Belt process to work.
The Man for the Job
For 31 years, Dave Ryder worked for Sam Dell Dodge in nearby Syracuse, N.Y. His reputation had preceded him when auto mall owner Burdick hired him in August 2008. “I knew he was a loyal employee with a lot of experience,” Burdick says, “and his people skills and experience in the business made him a great choice.”
Burdick wanted Ryder to do two things: to get the employees working together better, and to get the shop running as efficiently as the PPG teachings on Green Belt principles would allow. Wisely, Burdick says, Ryder started by getting to know the employees, finding out what the problems were from the source and developing relationships with the people he would have to lead. Then he used the information he had learned from the employees to change some of the processes that were costing the shop time and business.
“He’s spent a lot of time looking for bottlenecks, constraints and ways to take production to a new level,” Burdick says. “But the reason what he’s doing is working is that he’s a good leader and he’s worked hard to improve morale and remove the ill will between some of the techs.”
Ryder knew he couldn’t stop there. He needed to understand completely the lean processes that the shop was supposed to be following. In November, he went to the four-day Green Belt training course offered by PPG. The course taught him how to apply lean Six Sigma principles to collision repair, and it showed him what was wrong—and what could be right—with the shop. So did Tim Fitzgerald, a consultant for PPG. “I followed up with some on-site consulting to support the information presented in Green Belt,” Fitzgerald says.
“Some employees were mad about the way the shop was being run, or they were mad at PPG, because they thought the Green Belt stuff wasn’t working,” Ryder says. “But it was actually because the tools weren’t being used.” So Ryder worked with Fitzgerald to bring the shop in line with those more efficient processes—primarily in pre-production.
—Dave Ryder, manager, Collision Center at Driver’s Village
“Dave has been leading his staff through improving all facets of the pre-production processes,” Fitzgerald says. “These are all the components of the PPG Repair Planning process that, when done correctly, can positively impact 80 percent of all production delays that directly impact cycle time and hours-per-day performance.”
Today, each department—metal, paint, detail—signs off on the car’s repairs before it moves to the next step of the repair. When a car comes in for an estimate, the disassembly team leader makes sure the car is totally disassembled before scheduling its repair, and no parts are ordered until it’s totally disassembled. That’s because Green Belt principles dictate complete disassembly in the damaged area, so that all repairs—not just the ones that are easy to spot—are included in the estimate. It keeps the car from going on the shop floor only to have to stop when a new needed repair is discovered and another part has to be ordered.
Ryder also got visual signals in place. Taped outlines on the floor now show where tools and equipment go, so that they can always be found. There are signs on the walls for handy reference when an employee isn’t sure about a procedure, such as prepping a vehicle or preparing its repair plan. Other signs, which hang from the ceiling, show where the car is in the repair process. Most importantly, every car has a parts cart that follows it around the shop so that parts stay with the car and are right at hand when they’re needed.
Ryder also decreed that there would be no more than 50 cars in process at any one time. For example, if the metal techs are producing more than the paint team can keep up with, they can’t keep starting new cars; they go do prep work to help loosen the bottleneck in the paint area. “Our goal is to have the car go all the way through the shop without stopping, and if the flow stops, somebody has to help out in another department to get it going again,” Ryder says.
Ryder also got rid of some of the paint techs and brought on new ones, then promoted the most senior tech to paint team leader. He also eliminated its two-team structure. Previously, one team had taken care of fast-lane jobs—those that took less than 10 hours—while another handled longer jobs. Because the two teams were paid differently, and paint techs could make more money handling the fast-lane jobs, there was considerable ill will between the two teams. Ryder made them all a part of the same team, and while he says he may change that in the future, for now, the tension over pay has dissolved.
Results (So Far)
When Ryder started making his changes, the average hours turned per day per tech was a mere 6.4. By the end of last year, that average had risen to 8.2, and this year it’s over 9. “That’s still not where we want it, but it’s moving in the right direction,” Ryder says.
The shop’s cycle time has also improved. Cars were spending about 10 days in the shop before Ryder started. They’re down to 7.1 days now, and Ryder’s goal is to get that to 5 or less. That’s still slower than some top shops, but Ryder is happier to know that sales and gross are up, and keeps in mind that the shop repairs a lot of vehicles that have been in major accidents.
Monthly sales are up from about $275,000 to $325,000, and the shop has increased its net sales by 3 percent. Ryder hopes to get that monthly number above $400,000. In part, that’s due to the increased efficiencies the shop has realized, but Ryder has also worked to bring more direct repair business to the shop. He’s added two direct-repair relationships since he started, and the proportion of business that comes from the Driver’s Village dealerships has dropped from 90 to 95 percent to between 70 and 75 percent.
Knowing that people can only take so many changes at a time, Ryder first made the improvements he felt would do the most good with the least amount of disruption. Now that the staff is getting comfortable with Green Belt and gaining confidence in Ryder, he and Burdick are working on a business plan to eliminate many more inefficiencies. New changes will be phased in between now and November. “We’re hoping to improve cycle time, raise sales and gross, and do it by focusing on the 20 percent of the process that includes 80 percent of the problems,” Ryder says.
The plan will use even more of the Green Belt principles Ryder learned in the PPG class, helping the shop to do more with less. But he won’t start implementing the plan until he and the shop are ready. “This is a big facility and making these changes is going to be very time-consuming,” Ryder says. “And in the meantime, we have to keep up our daily business.”