Matthew McDonnell knew the parts process at his shop had turned into a mess. Inventory was piling up. Parts were too easily damaged or lost. Plus, all those extra parts lying around were like money lining the shelves. To make matters worse, the shop’s policy on back orders had gone awry. If a back ordered part arrived for a customer to pick up, no one knew who was responsible for notifying the customer or even if the customer had been notified. “It was unorganized,” admits McDonnell, co-owner of Big Sky Collision Center in Billings, Mont., which earns $5 million in annual revenue.
McDonnell knew things needed to change, and soon. So this past spring, he began training his 35 employees to follow a standard operating procedure (SOP) to ensure the shop’s parts process flowed more consistently and efficiently. The SOP—the written document outlining specific steps for completing a task—was a great start. To make the SOP truly useful, employees had to understand the SOP and follow it to the letter, every time. McDonnell had his work cut out for him.
HOW TO CREATE AN SOP
According to Mike Anderson, owner of Wagonwork Collision Centers and Consulting in Alexandria, Va., there are four critical steps to educating your employees to use—and to retain—SOPs: develop, train, test and audit. McDonnell carefully adhered to these steps, and his efforts paid off. Here’s what he did:
Develop. McDonnell and his two parts employees met to talk about parts department problem areas and inefficiencies. “We figured out what was wrong and what areas caused the most trouble,” he says. With the trouble spots in mind, McDonnell worked with his staff to develop a SOP. He encouraged them to provide as much input as possible. “If you [make employees part] of the process, they take more ownership,” he says. The group documented the new agreed-upon procedure, which they outlined in this way:
Unit 1: Purpose
Unit 2: Initial Parts Processing
2.1: Preparing the Estimate and Parts Order
2.2: Ordering Parts
2.3: Parts Arrival
2.4: Parts Follow-Up —
Assigned Calendar Date
Unit 3: In-Shop Parts Processing
3.1: Vehicle Arrival
3.2: Vehicle Nears Delivery
Unit 4: After Delivery Parts Processing
4.1: Vehicle Delivered without a Minor Part
4.2: Customer Complaint
Involving Parts
Unit 5: Appendix
5.1: Vendor Contacts
Each step of the SOP was accompanied by detailed information and step-by-step compliance instructions. The SOP was kept accessible to everyone, in hard copy in a binder and in a computer file. All told, the document for the proper parts process was about 20 pages.
Train. After establishing the guidelines, McDonnell used the SOP to create a simple checklist for his parts employees to follow. Throughout the parts process, each employee is required to note when a particular action is taken. This keeps everyone on track with the new SOP and ensures they’re being properly trained. Results were quick. “I knew they were [following the checklist] because the process was more efficient,” McDonnell says. “The inventory wasn’t there anymore.”
Parts vendors were instructed to hold parts until needed, and only two days of inventory—instead of two weeks’ worth—was kept on the shelves. Customer back order cards no longer piled up. Once a back order arrived, the customer was notified right away. “We call them when it comes in and send a postcard,” McDonnell says. “If they don’t come in within 30 days, we mail the part to them.” The new SOP solved the parts problem and quickly became the official procedure to follow.
Test. Testing the staff on new SOPs is a good way to confirm compliance. A test can be a formal written quiz, or it can be an informal observation, watching your team at work on the task in question. McDonnell plans to wait a few months to check up on his team’s compliance with the parts SOP.
Audit. Though performing an audit is the final step, McDonnell says he’s already doing quick ones from time to time. “Weekly, I check to see how things are going,” he says. He encourages feedback from the parts team about the new SOP, and he ensures they’re still following the checklist. He also prompts his employees to self-audit. Open dialogue allows for any adjustments to be made to the new SOP, if needed, and helps keep the procedure finely tuned. McDonnell plans to spend more substantial time auditing after he creates a test for his parts employees.
MAKING SURE IT STICKS
Writing an SOP, making sure everyone understands it and seeing that it’s implemented properly are important steps in the process of creating and implementing new procedures. Making sure that employees don’t fall back into old habits is critical, too. McDonnell saw that laziness or carelessness crept in at times, which is not unusual. For example, a parts employee is required to be present when parts are ordered for a repair in order to avoid mistakes. Otherwise, a lot of time wasted. “If the parts guy isn’t there, and [we] order clips, and they’re supposed to be blue, and he orders orange, we have to return them,” McDonnell says. “It’s not efficient, and it’s not following
the SOP.”
To address this particular problem, McDonnell scheduled a team meeting to review the SOP and to emphasize the importance of following the SOP to the letter. He reinforces that with monthly meetings. “When you have a monthly meeting, you keep everyone in line,” he says. The key to making sure the SOP is being followed correctly every single time is to make employees aware of their own role as well as the roles of others. The meetings then provide an opportunity to openly discuss whether everyone is still on board and properly following procedure.
PATH TO SUCCESS
In addition to his parts SOP, McDonnell trained his employees to use them in other areas of the shop. Technicians now follow a set protocol for each repair, estimates are written more accurately and equipment is both used and stored properly.
The improvements have helped decrease the number of comebacks—a huge plus that has improved cycle time and productivity. “If you decrease comebacks by 10 percent, you will see at least a 10 to 20 percent increase in productivity,” McDonnell says. Do that, he says, and “you’ll be ahead of the competition.”
