Unifying 32 Disorganized Shops
Admittedly, Darren Huggins is not your typical corporate executive. He’s straightforward—blunt even—with a strong disinterest in the politicking that sometimes plagues large conglomerate hierarchies.
“What I do know is collision shops,” Huggins says. “I know how they work—how they need to work.”
And that’s why, when he took over as national collision director of the Van Tuyl Auto Group in 2007, he didn’t mince words with what he saw in the 32 independently run dealership facilities the company had at the time.
It was a mess.
“I think collision had always been an afterthought [for the company],” he says. “We had shops that were large losers, six-figure-plus losers, every year. A lot of them were.”
The shops were disorganized, each acting on its own whims, mostly in line with basic, commonplace industry practices—of the 1980s.
Though it generated $90 million in total annual sales, the collision division was underperforming and unprofitable. Huggins’ task was direct: Turn the segment into a true moneymaker.
Cecil Van Tuyl started in the auto industry in 1955 with a single-location Chevrolet dealership in Kansas City, Mo. Over the next half century, The Van Tuyl Group expanded from a humble Midwestern family business into a multi-billion-dollar network of dealerships and collision repair facilities, and a full-on business consulting services firm.
Huggins signed on after exactly 20 years of service with Huffines Auto Group, most of that time spent as the Texas-based company’s collision director.
Huggins’ reputation for success preceded him upon arrival, says Jerry Peña, the director of the Van Tuyl Group’s collision location in Peoria, Ariz. Huggins had previously helped turn around a number of Huffines’ facilities, including one that became the area’s first million-dollar shop, shortly after generating just $40,000 in sales each month.
“The way we were operating, the way things were going, we knew there would be changes,” says Peña, who took on his current position in early 2007, after the Peoria location posted a six-figure loss for 2006.
For the majority of the company’s history, its collision facilities operated in a unique model, essentially acting as completely independent facilities under the same ownership.
A better way to put it might be that the 32 facilities were independently disorganized.
“It was just an old-fashioned way of doing business,” Peña says. “[In our shop], we were running from fire to fire with very little discipline. We were working hard. But we weren’t working smart.”
The company had little focus on key performance indicators, particularly cycle time and customer service index (CSI) scores. And there were no strict processes in place—at any shop—that would allow business to run efficiently.
In all, it was causing the facilities to lose customers, inexcusable for a company that sells so many vehicles, Huggins says.
“It was a mentality issue,” he says. “It was all about a lack of a culture that would allow these shops to win, and win together.”
With 71 dealerships across 10 states that linked to the 30-plus repair shops Huggins was now in charge of, the company had plenty of current customers; they just weren’t coming back for collision work.
Cycle times were too high (around 10 days) and CSI scores were far too low (around 92 percent). It was a customer-experience issue, Huggins says, and the company needed to change the way it offered value to customers.
Staying in a “losing position” was not acceptable, Huggins says. The only option was to start making changes—to everything.
It’s referred to as the VTAPS playbook, as in the Van Tuyl Advanced Production Systems playbook.
“It’s like a bible for a body shop,” Peña says. “It’s what we do; it’s what outlines everything. It’s how we can build discipline, organization, and, most importantly, our culture.”
Like any good guidebook to enlightenment, the VTAPS playbook starts with a fundamental idea: The role of a collision repair facility is to help people.
“It just so happens that we do it by fixing their cars,” Peña says.
Huggins wanted true, organic growth for the company, and to do that, he knew that each facility needed a renewed dedication to its customers. That is, everything was going to be about a better experience, focusing heavily on processes that lead to improved service and cycle time.
“The way I looked at it was that we needed to make small deposits that lead to big deposits,” he says. “We had to slowly show people how to win.”
And that started with organization. Every shop was going to follow this playbook that Huggins created, and every shop was going to operate in the same way using the same methods.
With regular meetings and more face time in shops, Huggins was there to guide the shops through these changes and more; communication was the key.
“We have a creed in the playbook that talks about leaders trusting and believing in employees and employees trusting and believing in leaders,” he says.
Slowly, the company shifted. One part of the playbook’s procedural elements was a new focus on lean production. Repair planning became key, with a thorough system of disassembly, estimating, blueprinting and constant communication.
Another VTAPS element was customer interaction. Peña says his shop communicates with customers daily throughout the process, using a mixture of text, email and phone calls.
Then, on delivery, customers are given an all-new experience: the “wow room.” Customers are brought into a room and given a parting gift, which can include car-care kits, coffee mugs, flashlights and other items.
“Then they get to meet the guys who fixed their car, and I get to meet [the customer],” Peña says. “We thank them for their business right there.
“Then the car is brought up to them, backed in, and we go over everything bumper to bumper. That’s one thing we do to make it a real personalized deal.”
Peña admits that it wasn’t an easy transition to the “new approach” that Huggins instilled. At first, there were some losses of personnel. Over the course of a couple years, though, once the outcome was starting to become clear, that ended.
With 36 total shops in 2012, the collision group generated roughly $180 million in total sales, a per-store average of nearly $5.1 million. CSI scores shot way up, and cycle time was cut by a third. And Peña’s shop is the perfect example. After years of struggling with customer retention and perception, the facility now has a 98.8 percent CSI score (up from 92 percent). His overall cycle time, which used to be in double digits, is currently 6.5 days.
“And that’s a testament to how great of a leader [Peña] is, and how having a plan can make the difference,” Huggins says.
The company is pushing forward, as well. Huggins emphasizes continual improvement and a focus on education and training. The company has two major meetings a year to go over results, goals and planning. It also held a trade show in February, which featured 55 vendors and more than 3,200 attendees. There were two days of business training sessions.
“It’s a work hard, play hard sort of thing,” Huggins says. “It’s one of the ways we come together and have that focus on winning as a team.”
The goal now, Huggins says, is for the company to double sales again within five years.
“We’re not growing by acquisitions,” he says. “This is real, organic growth. We doubled our sales in the last five years with only adding four stores. With the culture we have in place, we should be able to continue that.”
And that’s the big idea, Huggins says: This group of 36 independently operated shops is now a unified team.
“This industry is tough; I mean, it’s really hard,” he says. “The industry is changing, and it’s going to keep changing. We have to change with it; everyone does. We’re striving to train our people to become better, and we’re challenging each other to change and improve.”