Sherwin-Williams Conference: Make Pivotal Pivots Through 'Impact Assessments'
THE WOODLANDS, Texas, Dec. 10, 2015—If you’re smart, said Lee Rush, you won’t wait until you’re chronically ill to visit the doctor or the dentist. You schedule regular, yearly appointments to assess your health and get ahead of any potential issues.
And when it comes to collision repair shops, there isn't a difference, Rush said Thursday during the Sherwin-Williams Vision Group Conference outside of Houston. That’s why he performs regularly scheduled “impact assessments” with shops.
“It’s like a physical,” says Rush, manager of business consulting services at Sherwin-Williams Automotive Finishes. “You get one every couple of years to see what you’re not doing, or what you are doing that you should be doing a lot more effectively.”
Rush sat down with FenderBender during a break in the conference on Thursday to discuss how regular impact assessments aren’t necessarily just for down-on-their-luck shops looking to completely revamp processes. Even the most successful shops can make tiny pivots that make huge differences.
Why are regular impact assessments so important?
For some reason, in the collision industry, unless it’s broken, owners don’t fix it. So an impact assessment is where an expert would go into an operation and they would assess current processes and procedures, your current operating model, how you conduct business every day, how you process a vehicle through the repair center. We follow management, estimates, the physical vehicle, parts, the labor, the entire process of that repair cycle. We track P&L statements and KPIs. All the things we would look at to determine if it’s a healthy business.
Does every business really need regular assessments?
Even if it’s a premium account that’s run very well, you can always improve upon where you are today. So the observations may be smaller or more minor, but there are still opportunities.
Nine times out of 10, you go to see your doctor and you’re running a healthy business. However, the doctor might say, “I want you to lay off the ... and try to to do more of … .” It’s the same thing with collision repair shops. It’s not like we’re going in and saying, “Ah-ha! I’ve found what’s broken.” It’s an assessment. And we put together that assessment in the format of an executive summary where we identify our observations.
How does the assessment work?
We spend four or five days on production, and we’re going to see and discover things you might not see and discover in just a walkthrough. Someone is coming from the outside with a completely different perspective. An owner who’s in the business every day, all day long, does not see these things, these minor things. So we state those observations in a record format, and then we make recommendations, because often in business there are options. Because we work with so many shops, we can make recommendations for best industry practices; what the premium operators in our industry currently doing within that process.
And then the end of the executive summary we have an action plan to implement. We can say, “This is what we’ve observed, this is what we recommend, and this is the action plan to implement those process improvements.”
What are common areas that even the top shops need improvement in?
It’s all about productivity and labor. Everybody can improve on those areas. Within each of the of the problems we see, labor touches everything. That’s the one cost in particular. And when it comes to paint costs and materials costs, there’s a lean process we can implement across the board that’s going to cut down on waste, which increases productivity, which in turn increases your profitability. We see 5 percent to 20 percent decreases just by equipping guys with parts and better inventorying parts.
We had a shop we consulted two years ago in Fort Myers, Fla. Within two months, their profitability was up 22 percent, simply because of some very basic things. These were non-paint costs. They went from getting 22 cars per week to getting 28 cars out per week. Same manpower, same physical structure. When you can start to do that with things that are already within your footprint, it’s a very limited cost to get that process down.