Beyond Our Borders
No two shops are the same, and, as FenderBender learned in speaking with repair businesses from around the world, no two collision industries are either.
But while the differences in operations, competition, technology and insurance involvement can make a shop in the U.S. seem worlds apart from one operating in, say, the Kingdom of Bahrain—an island country in the Persian Gulf—one aspect of running a collision repair business is universal: All shops face obstacles, and those that find unique solutions to those problems, solutions that help differentiate them from competition, are the ones that succeed.
From the Middle East to the Netherlands, from Germany to Australia, FenderBender spoke with some of the world’s leading collision shops about the innovation, operational efficiency and strategic vision that has shaped their success.
Revolution in the Kingdom of Bahrain
Behbehani Brothers is setting the pace for the collision industry in the Middle East with rapidly changing technology and advanced repair techniques
Situated in the Kingdom of Bahrain, a small island country near the western shores of the Persian Gulf, Behbehani Brothers has grown its reputation as an importer and dealer for a number of luxury vehicle manufacturers. Founded in 1952, Behbehani Brothers is the sole importer for Audi, Alfa Romeo, Fiat, Porsche and Volkswagen in Bahrain, and the dealer for Chrysler, Dodge, Jeep and Ram.
With a population of 1.1 million (half of which are expatriates), a total vehicle park of only 250,000, and a manufacturer-led industry known for luxury vehicles, Bahraini body shops seeking to provide the best customer experience and reduced cycle time face stiff competition.
To maintain its perch as one of the top body shops in the country, Behbehani Brothers decided to embrace a completely new method of vehicle repair.
Maximizing Throughput Without Adding Space
As a dealership body shop, Behbehani Brothers benefits from the manufacturer-led industry in their country, says general manager Peter Green. On average, the shop retains repairs on the vehicles sold for at least two years, sometimes up to three.
Similar to the U.S., however, the Bahrain industry faces conflicts with insurance companies over price and customer demand for lower cycle. Behbehani Brothers underwent an expansion to 25,000 square feet in 2006 to meet the growing demands of the business, and increased its staff to 32 employees (productive and nonproductive). But, by 2011, the facility no longer sufficiently accommodated future requirements.
That’s when Green and commercial business manager David Williams decided to go outside the box.
“As in most body shops, we realized our primary constraint was our paint booths,” Green says. “These were currently dictating our throughputs per day, and without a solution to this, we would very soon have unacceptable lead times for our customers. Instead of looking for ways to expand the body shop in size and incorporate additional spray booths, we decided to look inwards at process and equipment to see if there was an alternative.”
The alternative they decided on was partnering with the U.K–based Byteback Group to implement robotic drying technology and Theory of Constraints methodology, which has allowed the shop to increase its weekly throughput from between 50–65 vehicles to nearly 100 without adding a single square foot of space.
To implement this new system, the shop underwent two changes: updating the shop’s technology and then creating a new complete process for vehicle repair. On the technology arm, the shop invested in a gas catalytic drying system, which generates drying though infrared energy created by a gas catalytic reaction. Typically, most traditional drying methods have a bake cycle of 30–40 minutes, Williams says, while the new system reduces this time to less than 10 minutes.
The shop now has two robot-enabled spray booths, which doubled their throughput from five cars a day to 10–12 cars a day. Besides replacing the need for the conventional drying process, the system has also produced an energy reduction of 70 percent in the shop.
“The net effect of our system is that it has allowed us to grow,” Williams says. “Rather than putting in another spray booth or area, we could maximize the opportunity without moving.”
Adopting a New Process
To ensure the shop could continue pulling cars to paint at the necessary speed, Behbahni Brothers also underwent a process change by moving away from the traditional departmentalized body shop operations.
“Process change was actually the key to our business requirements,” Green says. “Having implemented a drying technology that gave us the additional throughput capacity in our booths, this would only deliver improvement if we were able to produce a supply of vehicles that would keep them at optimum operation. Through training, we have been able to minimize the movement of the vehicle during the repair.“
Instead of moving through a number of departments, the vehicle remains in a single bay until the paint operation and returns to that bay immediately after paint. During the panel repair and preparation, a single technician carries out the repair and remains ready for the return from painting. To achieve this continuous workflow, the shop created more than 20 bays for its 18 technicians.
“Traditionally, you’ll see 20 cars in a shop and only five are started” says Williams. “The idea here is to provide the fastest possible repair time for every single repair, whether it be a simple blow-in on the fender to a full structure repair. We gain a huge individual efficiency on that job because the individual is with the job from start to finish. They don’t work any faster, they don’t work harder, they just work more consistently.”
The system has reduced cycle time to 7.5 days, an especially impressive number given the extended delivery time on parts to the country.
Looking to the Future
Green says that as the Behbehani Brothers vehicle park continues to grow, the shop is looking to add more technology, including automated estimating systems to streamline communication with insurance companies, additional robotic drying technology, and the necessary equipment to keep up with manufacturer requirements.
“There are no secrets to our success, but the biggest contributor is having an open mind to new ideas and the support of all our staff in implementing change within the business,” Green says.
Quality in Quantity
An inside look at Australia megashop QPLus Production, designed to churn out 150 hard-hit jobs per week with a 10-day cycle time
There’s always more than one way to solve a problem, Stephen Bell says. To improve a business and truly differentiate it from competition, all focus needs to be on finding unique solutions, ones that create new efficiencies by reimagining the status quo.
That was the starting point for QPlus Production—the behemoth, factory-style, collision repair facility founded in a joint partnership between Sydney, Australia, second-generation shop owner Daniel Zammit and the Suncorp Group, an Australian-based insurance and financial company.
“Daniel came to us with an idea to reinvent the way cars can move through a shop,” says Bell, senior advisor of corporate affairs for Suncorp.
Zammit saw an underutilized and, too often, underperforming segment of the repair industry—hard-hit repairs—and turned conventional thinking on its head: The plan, as Bell explains it, was to use quantity to generate quality. If the shop could develop factory-like production lines combined with rigid quality-control and customer-centric processes, it could utilize all the advantages large corporations have, namely bulk-ordering, brand recognition and confidence from insurance carriers.
Zammit had the concept, the systems, processes and the vision; Suncorp had the capital and connections. Put it together, and QPlus Production (“Q” as in “quality”) opened in April 2013 with more than 52,000 square feet of shop space and nearly 200 employees. Just a year into operation, Q-Plus is nearing capacity, which will allow it to push through 150 vehicles—exclusively hard-hit jobs—each week.
Despite being nearly 10,000 miles across the globe from the U.S., the operational setup of QPlus has universal advantages for every shop, and, as Bell says, it comes down to three key focus areas: positioning, process and people.
“[Zammit] built every little step, every little system; everything in the shop is intentional,” Bell says. “That’s why it works the way it does.”
Setting Up a Giant
In order to make the shop setup work for QPlus’s purposes, the company needed to have an “original design,” Bell says, a from-scratch shop layout unhindered by physical limitations.
Zammit found such a location in a former distribution warehouse for a Wal-Mart–style big box store. The wide-open space gave QPlus a blank canvas, and Zammit set up a linear repair model with departments laid out next to each other from one end of the shop to the other in order of the repair process.
Actually, there are two “lines,” one for each of the shop’s two repair teams. Part of the QPlus goal was to work on any and all hard-hit vehicles, but with a high level of expertise. So, Zammit equipped the facility with tooling that meet the standard certification requirements for 50 vehicle makes. He then divided the shop into two teams, blue and red—each with its own “line” of departments, equipment and tools, all color-coded based on the team.
The color-coding, which also carries over into the team’s uniforms, gives staff and managers visual cues and eliminates confusion over organization in the shop.
Creating Efficiency Through Execution
As any growing shop can attest, quality is hard to maintain as scale increases. Bottom line: Zammit’s goal was to eliminate mistakes that could back up his production cycle.
To do that, he assigned two managers to each department—one for each team, red and blue—who would perform a full quality control check before a vehicle was allowed to transition down the line. In the end, QPlus wound up with a nine-step repair process with five quality control checkpoints:
1. Vehicle check-in.
2. Initial estimate, assessment and approval
3. Blueprinting [Quality control check]
4. Body work [Quality control check]
5. Paint [Quality control check]
6. Assembly [Quality control check]
7. Detail—buff, wash and polish
8. Final quality check inspection and test drive
9. Vehicle delivery
Building a Team
The Australian collision market deals with many of the same issues its U.S. counterpart does, Bells says, and at the top of the list is finding qualified, trained technicians. Running a massive shop requires a massive amount of manpower, and instead of trying to recruit a hundred or so techs, Zammit decided to grow his own through apprenticeships.
With roughly 35–50 apprentices on staff (the number fluctuates as more move up and more are hired), QPlus is the largest employer of collision repair apprentices in all of Australia. The idea, Bell says, is to have fresh, moldable employees that can be trained “the right way” on the shop’s systems and processes. It’s a system that relies heavily on the team’s strong mentors (namely the managers and more experienced techs) and in-house and on-the-job training through TAFE, Australia’s official training organization.
Part of Suncorp’s investment in the business consists of supplying scholarships for outside training, and also funding the shop’s recruitment efforts.
“Every business needs to have strong mentorship to succeed, and needs to focus on improving its staff,” he says. “That’s regardless of size or scale. Everyone can do this on their own level.”
Adapting to a Changing Industry
After 104 years in business, Germany’s Karosserie Salzer has never stopped evolving
Stephan Salzer is no stranger to change. Since his great-grandfather founded Salzer Paint and Body (Karosserie- und Lackierfachbetrieb Salzer in German) in Metzingen, Germany, in 1910, the Salzer family has had a front-row seat to an ever-evolving industry—and they’ve done their part to remain ahead of the curve.
“It has always been a family-run business,” says Salzer, and while the business has passed through generations (Salzer’s great-grandfather, grandfather and father all ran the business before he stepped in), that continuity shouldn’t be confused with complacency.
“My great-grandfather really laid the groundwork from the beginning so that today, if you want a good quality repair, you go to Salzer,” Salzer says.
From a nationwide technician shortage to advanced vehicle technology, the Salzer family has met each challenge of the German collision repair industry head on, finding unique and effective ways to keep the business growing.
In some ways, Salzer admits that Germany has an advantage over collision repair industries in other countries; Germany has some of the highest labor rates and average repair costs of any European country, and insurance involvement remains relatively low.
However, Salzer says the industry is not without its own challenges. A shrinking market and a decline in the number of collision repair shops has meant an emphasis on processes and quicker repair times.
“We have to have an optimal process for all the departments and employees,” he says. “Otherwise, we are burning money from all corners.”
To speed up throughput and drive down cycle time, Salzer says the estimate is integral to a streamlined repair process.
“By us, the estimate is done days or weeks before the repair,” he says.
Rather than have the car in the shop for days, Salzer and his team will assess the damage, take a test drive, take pictures, create an estimate, and if the vehicle is still drivable, send the customer home.
After that, they will get to work ordering parts and creating a detailed schedule. When the customer returns, the replacement parts are guaranteed to have arrived.
“We order the parts days ahead of time so that they are in-house when the vehicle arrives,” he says. “That way, we can get started right away and finish the repair quickly.”
A Growing Technician Shortage
Perhaps the biggest challenge facing the industry in Germany is one that affects the country as a whole: a dramatic decline in students attending vocational schools.
The number of high school graduates opting for vocational training fell in 2013 for the sixth consecutive year, according to a recent education report released by the German government. Since 2008, vocational schools have seen their student population decline by nearly 14 percent, while the number of university students rose by almost a quarter. In addition, the number of young Germans starting an apprenticeship declined 4 percent in 2013 to 530,700, the lowest since German reunification in 1990.
“Everybody wants to go to university now,” he says. “But we still need positions in the service industries filled.”
To help combat the problem, Salzer says he has invested over the past two years in making his company attractive to potential job candidates.
“It’s not a secret but it’s very important: My business is my employees,” he says. “I have put a huge emphasis on making sure my employees are happy and comfortable.”
Salzer regularly sends his employees to manufacturer training, invests in new equipment and technology, and offers incentives, such as paying for every employee’s driver’s license (roughly 1,000 euros each).
Salzer and his staff have also become active in the industry. Salzer employs a number of apprentices, and also works with local trade schools, where his staff frequently goes in to speak to classes.
“We want to show students that it is fun to work with us and it’s a good industry to be in,” he says.
Battling the U.K. ‘Kitemark’
Since its inception in 2011, the PAS 125 standard and its accompanying Thatcham BSI Kitemark certification program has completely changed the collision repair industry in the United Kingdom. The set of standards were enacted to clean up an industry plagued by a dingy reputation; shops that achieved the Kitemark, in theory, are properly equipped, trained and organized to repair vehicles correctly.
Shops, though, have seen mixed results—and the jury is far from in on whether or not the new “Kitemark” standard will be anything but a boon for insurance carriers. Still, there are shops succeeding, finding their own, unique ways to increase margins and operate within a system that enforces large constraints. Two operators with vastly different businesses shared their respective approaches with FenderBender.
Blazing its own path
The first U.K. shop to use a fully ceramic, electric-powered spray booth. The first to dedicate an entire facility to aluminum repair. And then there’s the company’s deep ties to manufacturers. Simply put, Shorade Accident Repair Center is an innovating business.
But Steven Shore, managing director for Shorade, says that the shop stands out more for what it isn’t than what it is. And, what it isn’t is affected by the PAS 125 standard.
While others have struggled against the constraints of the insurance carriers in the country, Shore and his team have simply built a business model that circumvents them. The solution: “manufacturer approvals,” or, as their more commonly referred to in the States, OEM certification programs.
“Shorade is unique for its size in that it is independently owned and is a manufacturer-approved shop; we don’t have insurance approvals,” he says. “This enables us to command better rates and retain higher profit margins on the jobs due to expertise and knowledge of each make, allowing us to invest in technology and training.”
Shorade has 11 separate manufacturer approvals, including heavy-hitters like Lamborghini, Porsche, McLaren, Mercedes-Benz and Audi. The shop receives referrals from the automakers, and completes repairs—and charges—according to the manufacturers’ respective requirements, not the insurance carriers’ wishes.
The business model has allowed Shorade to maintain a high level of profitability. While many U.K. shops struggle to turn any net under the Kitemark, Shorade exceeds many benchmarks commonly set for shops here in the U.S. It’s allowed them to invest back into the business in terms of tooling, equipment, and an impressive “customer experience center” in its lobby.
“The perception of the U.S. market in the U.K. is that it has always been10 years behind us in technology, processes and methods and quality,” Shore says. “Customer expectations in the U.K. are very high and therefore the manufacturers expect the same brand experience through every touch point with the customer.”
Finding Hidden Efficiencies
One of the over-arching goals of the PAS 125 set of standards was to create a more level playing field for shops across the region. All businesses must follow the standards to receive work from insurance carriers; no exceptions.
This has created a flat market: similar shops working on similar vehicles with similar tools, equipment and processes.
That level of parity brought the heads of Motofix Accident Repair Centers to a critical turning point: Under these restraints, what could the six-shop giant do to truly stand out to customers? What could the company turn to as its key differentiator?
The answer was simple: its people.
“Historically, we have relied on our internal systems and processes to differentiate us from body shop groups of a similar size, and smaller organizations within our territory,” says Kate Goodwin, brand manager for Motofix. “More recently however, we have developed a program that is focused on investing in our employees and their core knowledge base rather than just their role-specific knowledge.”
This started from the top down, Goodwin says. The company focused on building a strong senior leadership team that reinforced the company’s overall operational standards—from the way customers were greeted to the way vehicles moved throughout the shop. Leaders were tasked with developing more “brand awareness” inside each facility, ensuring that the culture carried over. They created a new IT platform that allowed managers and senior leadership to compare repair data—from cycle time to touch time to CSI—across shops.
In the end, the goal was to eliminate inefficiencies by allowing the team to focus on their talents and their roles. And, Goodwin says, that’s what the company has done. After achieving the Kitemark status, the shop has seen increased workflow and has been able to maintain its profitability.
“[Shops] need to define a strategy that works for [them] and stick with it,” Goodwin says. “We used the opportunity [of PAS 125] to make it central to everything we do and not just a box-ticking exercise. In this way, it has helped us to standardize and improve processes. And, now, we have a stronger, more manageable business platform.”
Need for Speed
Netherlands-based GO! Repair Center wants to revolutionize the way shops do quick jobs through an add-on profit center model that will increase overall revenue
All across Europe, Peter de Roo has seen the same thing over and over again. The Netherlands, Germany, Italy, Spain—name a country, and Roo will point to a slew of successful shops missing out on nearly a third of their market’s potential.
Roo is the business development manager for EMM Holdings, a Netherlands-based company that controls a number of brands that supply, manufacture and distribute collision repair products and equipment. Roo’s role is focused on improving the businesses of the company’s clients.
And it doesn’t matter where the shop is, what types of makes or models it focuses on, or its client demographics; Roo says all shops share the same problem: They allow collision repair to be a “reactive” business.
“Twenty-five to 30 percent of all collisions are small, cosmetic repairs, and these are collisions that aren’t utilized by [shops]; they’re not approached actively,” he says. “For a number of reasons, shops ignore them.”
Margins are bad on short jobs, operations get bogged down by small tickets, and shop resources are already scarce.
At least those are the excuses Roo hears.
“But what if you could get that two-hour job done in under two hours, every single time?” he asks. “What if you could automatically add on this [profit center] without it affecting the rest of the shop?”
Roo and EMM believe they have the solution: GO! Repair Center, a franchise-based, turn-key solution Roo and his team are working to implement in shops around the world. Its first trial shop, located in Spain, saw a 15 percent revenue boost within two months of working in the program.
“Instead of being reactive, this is getting shops to actively bring in business,” Roo says. “It’s a whole different mindset.”
Book time for a repair is measured in hours, yet cycle time is measured in days. Roo says there’s an important gap there.
“Talk to a body shop and ask how many jobs came in and were actually ready within the time it takes to repair them,” he says. “It’s amazing the amount of time a car spends in the shop—two hour jobs are really 24 or 48 hours for the shop. If it’s sitting there like that, you’re losing money on it.”
These short jobs are part of that 25–30 percent, Roos says. Being able to market to them and then cycle them quickly through the shop would greatly improve a shop’s revenue and profitability.
“If you can sell it as an added value to the customer who will pay more to get it back within two hours—and wait there for it, eliminating any need of rentals—you’re suddenly enhancing your productivity in the body shop and you lower cost as well.”
Not every shop is set up to take a two-hour job and turn it around in two hours or less, though, Roo says. Small jobs often go through the normal repair cycle, getting lost among longer jobs, waiting in line to be completed.
Shops in his region of Europe also don’t often have the top-of-mind marketing campaigns that allow customers to find them for these services.
“Most customers in Europe simply call their insurer or dealer when they have a repair need,” he says. “Most shop’s don’t have that communication line open.”
GO! Car Repair aims to solve those problems for shops, Roo says, by providing marketing services, helping to reorganize the shop, training service staff to properly sell the work, and improving the shop’s atmosphere to make it more conducive to walk-ins and customers waiting.
Marketing. GO! focuses on a variety of tactics, depending on the demographics of an area. Traditional print, radio and television ads; social media; pay-per-click; the company tries to get the word out about the services—with a guarantee that all two-hour jobs will be completed in two hours.
Shop Setup. Most European shops have underutilized space in their facilities, Roo says. GO! helps shops reorganize the facility. To create the fast-lane concept Roo is talking about, shops need just 300–360 square feet of space, and the program helps reassign staff and equipment so that no additional purchases or hires are needed.
Process. The overall goal is to simply get the customer in the shop. Once the vehicle is there, an initial inspection determines whether the job fits into that two-hour window. If it doesn’t, Roo says it slides into a shop’s normal work mix. If it does fit, then work starts immediately in the dedicated bay and is completed without interruption.
Waiting. Roo says shops should try to focus on these jobs around lunchtime, a prime opportunity for customers to wait on the repairs. Appointments are important, but Roo says to encourage walk-ins; after all, the goal is to get them into the shop, and if you’re unable to take the work right then, it can be scheduled.
GO! helps to reorganize the lobby, and adds to key amenities: free WiFi and a lunch service. Roo’s team sets up a partnership with a local restaurant near the shop that will deliver (or supply carry-out that a shop staffer can pick up). Customers can drop off their car, order food and get some work done while eating lunch, Roo says.
“Walk-ins aren’t normal in our industry, and this could change things, bringing in a whole different client set,” he says.
GO! has five shops signed up in Spain, two in Holland, and is currently thumbing through numerous requests from German shops. Roo has received interest in Australia and Italy, as well as the Netherlands and its neighboring countries. The hope is to bring the program to the U.S. within the next year.
The shop in Spain that saw the 15 percent revenue increase, Roo says, gained that work mostly through first-time customers, being charged at more of a premium due to the two-hour guarantee.
“All you’re doing [as a shop] is better using the resources you already have to gain customers you don’t have,” he says. “You’re adding value for your clients and adding value to your business.”