Changing How Work is Allocated
It seems to me that the global accident repair industry has become very excited about cutting cycle times to reduce costs as well as to increase customer satisfaction. High on the agenda is the belief that the repair times can be significantly reduced by placing work more intelligently, which will reduce the costs to the collision shop and the insurance carrier and logically result in happier customers.
This is a subject that’s close to my heart, simply because what Bodyshop Revolution does is all about speeding up the repair process and achieving a continuous workflow environment in order to increase touch time and reduce cycle. So the question we have to ask ourselves once we believe we can do the repair itself quite quickly is, “What is the root cause of extended lead time?” Well, if we break it down it’s clear there are a number of interlinked issues which mean vehicles take too long to start being repaired.
The first problem is that we have to know what type of repair is going to turn up at our door, because until we see a vehicle, we don’t understand the severity of the damage. Even when we have made a full assessment of the damage, we are actually only forecasting (roughly) the hours that we expect it to take to carry out the specific repair, with no real idea of how long it will be in our stop-start-stop-start departmental workflow model of today’s shop.
In essence, we can’t actually predict with any accuracy how long vehicles will be on our premises, and herein lies the problem. Many people are suggesting that Zip code allocation of this work is the problem, as already overloaded shops are having more work piled up at their door, and it would be better to route it to a shop that had a lower lead time to reduce overall cycle. This would make sense, except that even for many DRP programs, the insurance carrier’s ability to direct the customer to a specific shop is typically very low.
The U.S. market is very different from the market where I come from in the U.K., where about 90 percent of all work is directed by the insurer, so load-leveling is less of a challenge. Here, the customer has more choice, agents direct work and tow-trucks can also decide where to take damaged cars, so insurer DRP direction is probably in the 40 percent range at best.
The winners of load-leveling are of course MSOs and consolidators, because they can handle the claim centrally and balance work throughout their own organization locally—if the insurance carrier will allow them. In the recent heavy snowfall in Atlanta, one shop reported 250 vehicles turning up at their door over that weekend. No amount of clever placement of work will solve that one.
The landscape will only have a chance of changing if more control is acquired by the insurer in order to place work. Now I know that sends shivers down the spines of some shop owners, but it’s just a fact: if the lead time is to reduce, then more work needs to be directed, but not primarily by Zip code. We’ve seen this type of allocation in other parts of the world, and all you get is some repair shops with a huge queue in front of their door, hugging the work in case it disappears, while others
In an ideal world, if a body shop had a “glass top” that providers of work could look into and be able to place work by capacity, skill sets and ability to cycle it quickly through the shop, this would inevitably reduce lead times. The problem is that even if the aforementioned things were in place, because typically body shops are “chaotic” environments based upon false hours and unpredictability, even putting the right work in front of the door at the right time would not be sufficient to get the throughput and cycle metrics required.
When I listen, in particular to IT people and software houses that are working on a clever scheduling solution to apply to the current system that collision shops use to manage the production cycle, my view is it’s an impossible task—it’s like trying to herd frogs!
The trick to this, as I eluded to before, is to pull work through the shop using a continuous workflow model. In this model, the vehicle never stops, work-in-progress is kept to a minimum (ideally the same level as the number of technicians you have) and a stable and predictable system is created. That in itself enables you to schedule by the slowest part of the system (constraint) and to then lead upstream into that with a load-leveling system.
Jon Parker is managing director of the Byteback Group, a U.K.-based information technology and services company aimed at advancing the collision repair industry. Parker can be reached at firstname.lastname@example.org.