Running a Shop Operations Shop Production

No More False Starts

Order Reprints

Cycle time is important; we all know that, right? Everyone in this industry, whether you’re a DRP shop or a non-DRP shop, must focus on cycle time. It’s just good for business—it keeps you in good stand- ing with insurance partners, and it makes life easier from a cash flow perspective as you’ve probably paid out money for labor and parts on any job that’s sitting.

But everyone knows this, right? And we’re all tracking cycle time effectively, right? Well, not so much. We tend to look at cycle times as one basic, overall number and that’s keys to keys—total days from the time the vehicle is dropped off to when it’s picked up.

There’s more to it than that, though. There is also what I like to refer to as “micro cycle times,” and there are three of them: pre-repair cycle time, repair cycle time and post-repair cycle time. Pre-repair refers to the time between vehicle arrival and when you actually start work on the vehicle. Repair is from the time the job starts until it’s completed. And post-repair is from job completion to delivery.

I look at each of these whenever I go into a shop. (The vast majority of management systems allow you to track this, by the way; if you don’t do it or don’t know how, check with your provider.) For the most part, repair cycle time is pretty solid at shops. Technicians tend to work pretty quickly and get the job turned around. Where I see the biggest issue is in the pre-repair portion, and this is where every shop’s biggest opportunity for improvement often lies.

So, how does the typical shop perform in this area? Well, usually, they’re at about one day—a full day from the time the vehicle arrives on site to the time it is actually in process. And that’s just smaller jobs; mid- to large-sized jobs are at 1–3 days with some sitting as long as six days. My friends, that is not good, and, really, there’s no reason it has to be this way. If you start getting to one day, two days, three or more days, you know there’s a problem. The best-in-class shops take no more than two hours to get a job in process after the vehicle shows up at the shop. Two hours.

Now, obviously, we have to wait on insurance approvals and parts, but even with that, it should be less than 1–1.4 days. There are also re-inspection issues, but if you pull all of that out—the insurance approval and re-inspections—how long does that job still sit before you actually begin the repairs?

If you find that your pre-repair cycle time is more than 1–1.4 days, there are four areas to focus on in your business that can fix this:

1. Scheduling. As an industry, we still take too many cars in on a Monday with the goal of having them out by Friday. What happens is that a good portion of those jobs sit at your shop until Tuesday or Wednesday before anyone even touches it or looks at it.I do a lot of work with Frank LaViola of Enterprise Rent-A-Car, and his data shows that many shops will have upwards of 70 percent of their overall work volume dropped off on a Monday. How are you supposed to process 70 percent of your week long workload on the first day? We can’t do this, and whether you know it or not, your business can’t afford the cost of a vehicle sitting and the cash you have tied up into it. Work has to be scheduled out appropriately. (If any of you are saying, “Well, the insurance company makes me do this,” we can cover that solution in a future column.)

2. Repair Planning. Having a clear and thorough repair-planning process is so critical, not only to reducing supplements but also to give clear direction to your team on what is expected. There needs to be 100 percent disassembly, and then we have to research all the parts and the corresponding OEM repair procedures. There might be times when the estimating system is missing something the OEM procedures and graphics would show you. You can’t miss on this stuff, and it all has to be written accurately the first time. Start thinking of supplements as a comeback or redo on your estimate!

3. Parts Procurement. How many of you have multiple parts orders on each RO? Too many are nodding their heads right now, I’m sure. If Part 2 is properly done, we should be on our way to knowing exactly what parts we need for the vehicle. From there, we need to ensure that we’re working with the right vendor that is knowledgeable and has good inventory. And we need a process in place for when those parts arrive to make sure they are mirror-matched, checked for defects and staged properly. If you’re not already, it’s time to start utilizing electronic parts-ordering solutions. Use technology. It’s your friend.

4. Administrative Process, Responsibilities and Team Setup. The administrative process needs to be streamlined, and there’s quite a lot that goes into it. Start with this: Make sure you’re using your management system to its fullest extent. Are there features you’re ignoring? Do you even know? Set up a time with your provider and get fully trained on all its available features. It’ll make everything else that much easier. From there, it’s about responsibilities and team setup. A lot of shops aren’t staffed or organized correctly on the admin side, and that creates a huge bottleneck—and a lot of unnecessary stress.

Ideally, a shop would break down this way: one front-end estimator, who takes and writes all estimates for walk-in customers (this is a customer- facing position where people skills are essential); a customer service representative responsible for updating the customer throughout the repair process through the customer’s desired method of communication and keeping the paperwork balanced and current; a back-end estimator, who would serve as a team coordinator or repair planner, ensuring that items in Part 2 of this story are completed successfully to include quality control of the vehicle throughout the various stages of repair; and, finally, someone in charge of the parts procurement aspects in Part 3.

That setup can process roughly $250,000–$300,000 per month in sales from an admin perspective. Not all shops are that large and have the ability to staff like that, but you need to ensure that you’re staffed properly to handle each of those responsibilities.

Think of those four areas of your business as if your team was running a relay race—four separate pieces that all directly impact the final result. It all has to be there. No one part can fail. So, take a look at your team, its setup, and your micro cycle times. Don’t put your team in a position to fail before the repair has even started. 

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