Implementing a Shop Management System
It should’ve been a simple task, completed in a matter of seconds: A past customer calls regarding warranty work, and Evan Harris needs to look up the customer’s repair history.
But at AutoWorks Collision Specialists circa 2011—the year Harris took over as production manager of his family’s Jackson, Miss., business—nothing ever felt simple.
“Just for something as little as that, I’d have to log into QuickBooks and search until I could identify their invoice,” he says. “Then, it was the paper trail; I had to dig for all the paperwork before I could find their information.”
There were other scenarios, too: identifying which techs worked on which jobs; evaluating the efficiency of that work; even just knowing whether or not the shop was hitting the mark in terms of overall production and profitability.
Every question at AutoWorks seemed to be answered by digging through piles and piles of paper.
In 2011, AutoWorks was one of many shops around the country operating without an electronic management system (EMS), something he says is still far too common today. Consider these numbers: Just 55 percent of respondents in FenderBender’s 2014 Tech+Tools Survey (page 35) said their shops operate with an EMS in place; only 33 percent of shops have key performance indicator (KPI) tracking software.
Harris says his family’s shop was losing the battle—and no one seemed to notice; no one had the processes in place to even be able to notice.
“There wasn’t anything to look at, nothing to track how we were doing,” he says. “You’d just wait to look at the bank account at the end of the month.
“It’s an old-school way of doing things that just doesn’t work anymore. There are a lot of people who just want to fix cars, and as long as they have money left over, they’re happy. Fine, but that’s a horrible way to run a business.”
The solution, though, is not as simple as purchasing an EMS and flipping a switch. It’s about full utilization, Harris says, and developing systems and processes that allow any shop to get the most out of their number-tracking capabilities. The EMS is simply the catalyst to working smarter, faster and more profitably.
And it would be the catalyst Harris would use to secure the shop’s future.
Harris began his career managing a service department at a grocery chain. Everything, he says, was based on numbers, carefully tracked to the smallest of details. There was no paper. Everything was done through a complex, yet easily accessible, computer system.
“When I went back to work for my dad and started to look at things, I thought I was going to pull my hair out,” Harris says with a laugh. “It was pretty much the opposite.”
Harris joined AutoWorks with the vision of growing the then three-person, $300,000-per-year “garage” into a modern repair facility. His father, Scott, still worked in the shop, and there “was no one really looking at the business side of things,” Harris says.
That was his new role, and in 2011, it needed to start with an injection of technology into the front office.
Like all shops, Harris says efficiency in information needed to be at the forefront of AutoWorks’ operations. The solution—adopting electronic management—was simple; implementing it and ingraining the new processes into the shop’s daily routine was more complex.
At the time, AutoWorks already used Mitchell’s estimating platform, and through that partnership, could begin adding aspects of its RepairCenter management system piece by piece, Harris says. With each added feature, the shop implemented new processes and systems to match the technology with a more sound operational philosophy.
STEP 1: QUICK START. Harris began the process with Mitchell’s “Quick Start” option that consists of a scheduling and workflow “whiteboard” feature. It showed which vehicles were in process, where they were in the process, and what jobs the shop had coming up.
With the help of the system, Harris revamped the shop’s scheduling process. Jobs were broken into three categories—small (0–15 labor hours), medium (15–30 labor hours), and large (30-plus labor hours)—and he began scheduling vehicle dropoffs based on the shop’s capacity for work each day; no more “drop it off Monday, try to get it out Friday,” Harris says.
Technicians could access the program in the back of the shop, as well, at a computer station setup for estimating and data searches. And Harris began using daily release meetings for the entire team to go over all in-process jobs and ensure each team member was on the same page.
STEP 2: LABOR AND PRODUCTION MONITORING. After roughly nine months of using the basic features, Harris added labor- and production-monitoring modules to the system. Among other things, this allowed technicians to clock in and out of jobs, which let the rest of the team know who is working on which vehicles, and when they move between departments. When a body tech, for instance, clocked out of a job, he moved it on to the prep department for the next step in the repair process.
With having the added step of techs physically clocking in and out of work, Harris added quality checkpoints at every transition. When a tech clocked into a job, they reviewed all work previously done.
STEP 3: CUSTOMER CONNECTION. Harris and his team then began using added features that allowed them to store customer information within the system. The added communication features, such as email and texting, put an emphasis on collecting more information from customers at the front counter. Harris, who was often stationed at the front desk, began asking customers their preferred means of contact, and that’s how they’d receive their updates. The shop also began ramping up its email marketing.
STEP 4: ANALYTICS. After nearly two years of slowly implementing the system, AutoWorks added additional KPI-tracking features that enable Harris and the rest of the team to quickly analyze key aspects of the business, such as gross profit on paint materials, or profit per hour on jobs from certain insurance carriers and fleet work.
The shop’s numbers became an open book to the entire staff as a means of helping everyone understand how each department affects another—and to stay on top of shop objectives.
AutoWorks now has a fully operating EMS through Mitchell, and the program is fully ingrained into the shop’s overall processes. Harris says there have been many clear—and some not so clear—results.
Statistical management is absolutely critical to a shop’s success—it’s the backbone of everything we teach. If you you don’t have strong key performance indicator (KPI) management, you’re just guessing.
There are a whole suite of KPIs that you need to be watching in a collision shop to make sure it’s profitable, and it goes far beyond what insurance companies are looking at. You have production numbers, sales numbers, redo numbers, straight profitability numbers, referral numbers, various margins to watch—there’s a whole pipeline of them.
You have to know your numbers, have to know what to watch, and, when you see them, you have to know what they mean and how to use them to strengthen your business. A management system can be the start—you need that means of tracking—but every shop, no matter what they use, needs to have this firm grasp of understanding.
The obvious ones: The shop was on pace to top $1 million in 2014 as of time of print, more than tripling revenue in less than three years. Efficiency has improved; despite not tracking closely, it rarely topped 100 percent prior to 2011. That number now stands at 164 percent for the entire team. Cycle time dropped, as well, to as low as five days (Harris tracks each insurer separately).
And, speaking of insurance carriers, Harris says the shop is now able to prioritize its relationships better based on the profitability of that relationship (e.g., the profit-per-hour metric).
There were other factors that contributed to the increased business, too. Around the same time, the team implemented a blueprinting policy, while the shop invested in equipment and added staff as sales rose.
Still, Harris says that there is “no way we’d be thriving without having made this change.”
Start slow, and finish fast. That’s Harris’ advice in business; carefully analyze options, implement in a precise way, and then, when everything’s in place, your business should be able to move quickly.
“It was a long process, and it’s still a work in progress; we’re always going to be making adjustments,” he says. “But everything’s so much simpler now. We’re not fighting ourselves every day to get things done.”
“We have a great feel for the business now,” he adds. “We didn’t know where we stood before. … Now, we know we’ll be here a long time.”