8 Keys to Improved Efficiency
Devin Fischer talks fast. He thinks fast, too, and is never short on ideas, theories or opinions.
Talk to Fischer for just a few short minutes and, well, that’s all he’ll need to explain it all to you—how he started in his father’s business, Fischer Body Shop, at 19, took over as manager the day after graduating college, and how he’s pushed (and pushed and pushed and pushed) against the status quo in helping to turn the once-humble Jefferson City, Mo., business into a production powerhouse, all in 10 years.
Give him the chance, and he’ll tell you all about it. You just better be able to keep up.
“Everything these days is fast paced; that’s what customers are used to,” Fischer, 32, says. “You have to keep that in mind, and while you’re pushing a lot of work through, it can appear hectic.”
That’s only in appearance, though, he says, not in practice. You see, most have thought about it all wrong. There is no method to the madness of running a high-performing business. Method—proper method, that is—alleviates madness.
Fischer gets it, and it’s that thinking—along with a slew of systematic business improvements—that allowed Fischer Body Shop to finish as the top-performing facility in FenderBender’s 2015 KPI survey.
Using our own survey data and a detailed evaluation process, the FenderBender team identified four of the country’s most efficient collision repair businesses, and asked them a very simple question: What are the keys to your success?
It’s not scientific, and it’s limited to those who responded to the survey. Still, as the numbers show, these are high-powered shops, performing in the 98th percentile of all collision repair businesses that participated in the survey. Their processes and systems are repeatable. Their lessons are relatable. Operational efficiency isn’t a mystery, they say. It’s a necessity.
1. One Team, One Mindset
[Devin Fischer, Fischer Body Shop]
“Shops are all about people,” Fischer says. “If you don’t have the right people in the right places, you’re just wasting your time. Your team is the foundation for performance. You have to start there.”
It’s easy to tell other operators to simply hire better, Fischer says. But, clearly, it’s far more complicated than that. As he implemented numerous changes into his family’s business upon taking over daily management (we’ll get to some of those changes later), Fischer lost people. He gained people, too, though, as well as some much needed perspective.
“What you need is for everyone to realize that, sure, my family’s name is on the sign, but this is their business, too,” he says. “That customer is their customer, my team’s customer.
“What it all comes down to is that you want people who want to work, who want to do what’s right by the customer. If they’re a little green, no problem; you train them. Bottom line: You have to have people who want to serve the customer in the same way you do. Do that, and everything else can fall into place.”
2. Better Pay (Plan), Better Techs
[Tom Davies, Yark Automotive Group]
There’s a thick, heavy, three-ring binder that Tom Davies has kept on his desk at Yark Body Shop for the past 10 or so years. Names and numbers—it’s filled with them; every single body and paint technician that’s worked for him at the Yark Automotive Group’s Toledo, Ohio, collision repair facility is accounted for in that book.
“You want to know someone’s monthly production numbers from three years ago? It’s right here,” Davies says. “We track it religiously, and that’s because we have to if we’re going to be efficient.”
Today, Davies is the dealer group’s fixed operations director, but he’s a “collision guy”; he’s quick to point it out. He’s approaching his 30th year at Yark, and he’s spent the majority of them fine-tuning an operational approach built on a shop culture of dedication—both to a quality end result and the processes in place.
So, getting back to that folder, it was created at a time when Davies completely overhauled his team’s pay plan, a move he says has led to year over year efficiency gains each year over the past decade.
Here’s how it works:
Base Pay. Davies starts each technician—paint and body—with a competitive base pay determined by skill level, training and years of experience. “It’s usually not the highest in the area, but it’s close,” he says.
Tracking Hours. Davies closely tracks efficiency and productivity numbers, but for the pay system, he keeps it simple for his team. It’s all done off book hours. (“That’s how you get to the other [metrics] anyway, so I just try to make it clear and obvious and easy to understand,” he explains.) He breaks down each tech’s performance into a weekly average of book hours performed. When a tech has been there long enough, this accumulates into a six-month average for book hours per week.
Month-Over-Month Improvement Bonus. Each technician sets his or her own benchmarks based on performance. Those six-month averages become the minimum. Each tech is expected to improve those numbers each month to receive a bonus, doled out in incremental increases to the base pay. It differs from one tech to another (based on position, experience, etc.), but each must hit a threshold of improvement (often a certain percentage increase in efficiency) to get, say, a $0.50-per-hour raise. Those bonuses are paid at the end of each month.
Year-Over-Year Improvement Bonus. Davies also gives out an annual bonus for techs that beat their six-month averages throughout the year. He tracks it June to June, and techs must be on staff the entire 12-month period to be eligible. “There are a lot of shops that will recruit away techs in busy seasons for a few extra bucks, and then let them go when it slows down,” he says. “This keeps our guys here and motivated all year.” The annual bonus also gives an incremental pay increase per hour flagged over the course of the year. Often, it’s roughly a $0.50 increase per hour. Davies says the majority of his techs get a bonus between $2,000 and $3,000. The results show in the shop’s efficiency numbers, Davies says, and are evident in the number of hours his team flags. For instance, when FenderBender spoke to Davies in April, he said his three-person paint team (he has since added two painters) flagged a total of 1,547 hours the previous month.
“I’m blessed to have an incredible team,” he says. “It’s all created this culture where everyone will go that extra step to get work completed. We have a great, great team in place.”
3. Small Jobs as Marketing, Efficiency Gains
[Bill Jobe, Greenwood Collision Center]
“When you think about marketing, wouldn’t it be easier if you could just bring customers into your shop and show them what you can do?” Bill Jobe asks rhetorically. “What if you could just show them your customer service process, show them the quality of work you do and the team you have. That’s the best marketing you can do, right?” Jobe’s answer: “Yes, 100 percent yes.”
And at Greenwood Collision Center in Youngstown, Ohio, he and his team have proved it.
When Jobe took over the dealer facility in 2013, he was tired of seeing too few retail and insurance jobs coming through the shop. He started with improved insurance relations, doing regular in-person visits to area agents to better explain his shop’s capabilities. The shop began participating in fundraiser walks and donating services to various area organizations. Jobe also started hosting informational sessions for customers at the facility.
But the largest change came in taking small-ticket jobs, which have become his shop’s biggest marketing tool. Just 30 months after first taking in those jobs, small-ticket items make up 13 percent of the shop’s work mix.
“The idea is that if they know you’re there for them and give that great service on a $150 job, where do you think they’ll go when they have a $4,500 crash?” Jobe says. Jobe utilizes an apprenticeship program in the shop, pairing a body and a refinish apprentice together to work on the small tickets. Each apprentice is supervised by one of the shop’s more senior technicians, who oversee the work. This way, Jobe says, it provides valuable learning and training opportunities, while also keeping margins in check.
Throwing in the smaller jobs has lowered cycle time by two days, and increased technician efficiency across the board. And, coupled with the other operational changes Jobe made, overall sales have doubled in the past 30 months.
“Looking outside the box is the only way to be successful and move forward,” he says.
4. WIP as a Starting Point
[Ryan Martin, Gerber Collision & Glass]
It’s simple math, Ryan Martin says. You have so many people on staff, so many hours available for them to work, and so many hours they can produce. So, why would you schedule work outside of those constraints?
“The amount of work in progress (WIP) has a direct impact on efficiency,” says Martin, general manager of a Gerber Collision & Glass facility in Grand Rapids, Mich. “When a shop has too many vehicles on-site, it reduces the amount of work that can be produced per vehicle with the available labor resources.” And with a shop cycle time below four days (average length of rental is 5.8 days) and a touch time approaching seven hours per day, Martin and his team know a thing or two about maximizing resources.
Scheduling is a difficult concept for many shops, Martin concedes, but it doesn’t need to be. He says there are three steps to doing it more efficiently:
Focus on book hours per day. Start with the total number of book hours your team can produce per vehicle each day. Martin’s shop comes in at an impressive 5.6, and that’s the foundation for the shop’s capacity. Use that number to build out a target for your WIP on a daily, weekly, etc., basis.
Break down your work mix. No two jobs are created equally. Categorize jobs based on book hours to complete, and use a “level scheduling” method to plot out how many of those can be taken in, worked on and completed each day based on your labor capacity.
Stick to the schedule and don’t break the rules. Never exceed your WIP target, Martin says. That’s a firm rule. And keep that level scheduling approach, even when the available work increases. And if you desperately want to bring that extra work into the shop? Well, Martin has another simple solution: Improve efficiency, which in turn increases capacity.
5. A Better Estimating Process
[Fischer, Fischer Body Shop]
The physical space of your shop isn’t as important as the process itself, Fischer says. And the physical space is pretty impressive.
At Fischer Body Shop, the drive-through estimating bay is 18 feet wide and can fit three vehicles comfortably at one time. It has all the tools needed for a complete teardown in one convenient place.
But that space would be worthless, Fischer says, if not for the process that goes with it.
For the first phase of the estimate process, the customer’s vehicle is brought into the estimating bay for  a teardown and full inspection; that’s the starting point. The initial estimate is created, and then  the shop’s estimator goes over it line by line with the customer. Then,  the estimator and customer do a full walk-through of the vehicle and pictures are taken of damaged areas (prior damage included). Everything is documented, and  one “final” estimate is then created for the customer.
The process never changes, Fischer says, even with DRP jobs.
“Could we save time by not being as thorough at this stage? Yes, of course—initially,” Fischer says. “But, by taking time upfront, you’re eliminating a lot of the delays and issues that come later. You take your time to save time.”
The proof: Try comparing the shop’s miniscule 8 percent supplement ratio to the industry average that regularly tops 30 percent in Mitchell International’s Industry Trends Reports.
6. Streamline Supplements
[Fischer, Fischer Body Shop]
No matter how high-performing your shop is, supplements are inevitable, Fischer says. But that doesn’t mean they need to be a major deterrent to efficiency. Fischer streamlined his shop’s supplement-ordering process with one pink piece of paper.
“We haven’t gone the paperless route yet, and all of our repair orders are on white paper,” he explains. “So, what I did was create a supplement sheet that we print on bright, pink paper.
“When we have a supplement, they take out a supplement sheet, write it on there; it’ll have the tech’s name, the job number, two columns for repair versus replace and a description. And they take that and bring it to the estimator, who takes it from there, adding it to the estimate.”
The pink color is meant to help the supplement stand out on an estimator’s desk, Fischer says, signaling that it’s a new priority. They should be handled immediately, but since Fischer, as the day-to-day manager, personally handles the parts ordering, he does a daily check-in with estimators around 2:30 p.m. (about an hour before his parts-ordering cutoff) to make sure there aren’t any new or lingering supplements to be ordered before the day ends.
7. A Focus on Material Savings
[Jobe, Greenwood Collision Center]
Efficiency isn’t only measured in cycle time and hours a tech spends on a job, Jobe points out. At Greenwood Collision, he says his team has a newfound focus on eliminating waste, particularly with body and refinish materials. The shop has slashed its materials costs by 25 percent in the last year due to one major change: installing individual material cabinets for each technician. The cabinets, which were a collaborative project with Jobe and the shop’s vendors, have a week’s worth of materials for each tech, distributed based on work type, workload and overall production.
The key, Jobe says, is that it allows him to track every materials dollar daily (the cabinets are audited at the end of each day).
“The problem with most KPI trackers with material costs is that you’re getting info 60 days after the fact,” he says. “If you’re starting to lose money and time in these areas, you can’t correct it right away.”
When researching this project, Jobe found that he had techs using as much as $4.13 in materials per hour, more than double the $2-per-hour benchmark given to him by vendors. The “sweet spot,” he says, is to be around the $1.80-per-hour mark, and that’s right where his staff is today; no tech averages higher than $1.90 per hour.
8. Skimping Never Pays
[Davies, Yark Automotive Group]
What do you need to do your job right?
That question is at the basis of all decisions Davies makes at Yark Body Shop. That goes for equipment, technology, training, continued education—all of it.
“Bottom line is that in a body shop, to be successful, you can’t skimp on things,” he says. “You need to pay technicians properly, you need the right equipment, you need the proper training. Without that, you can’t succeed. You get a return when you have the right people in the right places, and you give them the right tools to succeed. It’s really that simple.”