There wasn’t a problem with the shop’s efficiency levels—or its profitability, cycle time or touch time for that matter.
Auto Pride Collision, Bob Dunnigan’s three-shop MSO in the Flint, Mich., area, was growing, making it almost unrecognizable compared to the four-bay garage Dunnigan started out in 27 years ago as a green, 20-year-old owner.
And, really, that’s where the problem was: Every time Dunnigan walked through any of his three locations, he didn’t like what he saw.
“When we started, it was three of us—and we were in this thing together, we were a team. If something fell off, we were there to pick each other up,” Dunnigan says. “Things change, though; the industry changed. We keep getting bigger, and I walk through the shop, and I might see a body man standing there reading a newspaper. His bay is empty, but there’s a backup somewhere else. Why isn’t he over there helping out? Well, it’s not his job; he doesn’t get paid to help them.
“Coming from that small-shop mind set, I still can’t get my head around it. I didn’t like it. Beyond the obvious inefficiency of having someone standing around doing nothing, that’s just not the culture I want. How do you turn it into a team-first attitude, where everyone’s going to pick each other up? Well, that’s what we wanted to figure out.”
The Backstory
Auto Pride Collision expanded to three locations in Flint’s surrounding suburbs—Flushing, Grand Blanc and Clio—in 2001. The move gave the business room to spread its legs (the Flushing location is the largest shop at 13,000 square feet; the smallest, Grand Blanc, is 6,500), and the functionality it needed to better serve its customers in a more modern way.
Each shop gained I-CAR Gold status (the first independent shops in his area to do so) and switched to a lean operational model. Dunnigan focused on Six Sigma and its 5S approach to streamline his shop floor.
Through the 2000s, Auto Pride Collision was in growth mode, plowing through the recession and topping out at $4.5 million in total sales in 2012.
The Problem
Dunnigan is quick to point out that his business did not have a culture problem. He had loyal employees (his two original staffers from his four-bay shop still work for him), and all three shops put out quality work at steady rates.
And, since adopting lean methods, cycle times dropped to around eight days and touch time was 3.2 hours per day.
Still, Dunnigan had a larger vision for the company. He wanted it to expand further—but not before he was sure he could get the most out of each location.
That’s another reason the standing around irked him so much. That’s why he was looking for answers.
“I want my shop to run like a modern shop should, but I want working there to feel like it did back when I started,” he says. “Why are we not helping each other when we’re that busy? We change that mentality, and we’re more efficient, we’re creating a better product for our customers, and we’re all going to be more successful.”
The Decision
Around 2010, Dunnigan had first started hearing about shops successfully implementing true team-based repair processes in their shops. He was interested, and started attending training sessions on the concept.
Over the next couple years, he traveled to Chicago and California for classes. He worked closely with PPG and its Greenbelt training program to gain more information, and he picked the brain of every shop owner he could find that operated a shop this way.
The more he learned, the more it made sense to him—and seemed to be the answer to his problem. Early in 2012, Dunnigan decided to start making the switch.
The Implementation
Essentially, Dunnigan’s version of a team-based system puts the focus on the vehicle, with each employee working in a designated role to move the job through the shop in a linear process: from disassembly to estimating to body to paint, etc.
The measure of success is based on cycle time and touch time, rather than individual technician efficiency. In theory, it encourages employees to help one another for the good of the vehicle, and everyone gets paid accordingly.
For that drastic of a change, Dunnigan knew he needed a long-term approach. Not only was a team-based system going to alter the way repairs were done, but it would also affect each employee he had on staff. The biggest potential obstacle would be blowback from his team.
He decided to incorporate the changes slowly over the course of a year, focusing only on his Flushing location first. He’d use his Flushing shop as his “guinea pig” and, hopefully, it could become the example of success to get the other locations on board quickly.
He started by discussing the concept with his staff, going over each aspect of his plan and how (and when) it would be implemented. He kept communication lines open, and it helped him quickly identify who would be harder to get on board for the long haul.
“I wanted them to see that this was the future [of the industry], and this was our way to push our business forward,” he says.
And part of those early discussions focused on materials and standard operating procedures (SOPs). Because employees would need to help in different areas of the shop, everything needed to be standardized, Dunnigan says.
No longer would certain techs use different brand adhesives or different spray guns. He used his staff’s input to select the brands, models and styles the shop would adopt, and then the staff worked together to update and complete SOPs for every aspect of the repair process. Now, everyone could step in and be familiar with what was expected of them in that position.
Dunnigan then designed a workflow system and made minor tweaks to his shop layout to create a clear path for repairs, including each staff member’s designated role in that process.
“Everyone has a clearly defined role—that’s key,” he says. “Then, the secondary role is to help out when there’s a logjam somewhere.”
As these changes were made, Dunnigan implemented the new processes. In October 2012, his staff started doing team-based work. Although, there was one part Dunnigan purposely left out until the very end: pay.
“I was told that that would be the absolute hardest thing to change with the guys,” he says. “So, the thinking is that you change the way they operate, but pay them the same to start. They see how things are improving and how it’s working, but the pay doesn’t line up with the work they’re doing. Suddenly, they start asking you to change them to [team-based pay].”
For Dunnigan’s staff, that’s exactly how it went. After requests from his staff, Dunnigan created a pay matrix that would help him easily divide each staff member’s role on each ticket and pay them the proper rate for their work performed—each person getting a different percentage of the overall ticket based on experience level.
On Jan. 1, 2013, Dunnigan’s team worked its first full day in a 100 percent team-based model.
The Aftermath
First some numbers: For the first two quarters of 2013, cycle time dropped two full days compared to 2012, and touch time increased to 5.1 hours per day. The changes in materials use and ordering have resulted in a dramatic improvement in Auto Pride’s paint materials margins, jumping from 12 percent to 40.26. And, Dunnigan expects revenues for 2013 to be at an all-time high in Flushing.
“It was clear, right away almost, that this was going to work,” he says.
Dunnigan says he was lucky to have a progressive team in place to handle (and support) the change. He did, however, have to part ways (although amicably) with one employee, who just didn’t feel that the new atmosphere “was for him.”
Every member of the remaining staff, though, is currently on pace to make more money in 2013 than he did in 2012 when being paid on a conventional flat-rate system. And Dunnigan already has noticed a stark change in culture.
“I can already see that it seems to drive them,” he says. “I see our experienced guys helping out everyone else, pushing them along, really working as a team to get things done right. They see that if they help each other, they’re helping themselves, too.”
The Takeaway
No two shops are the same, Dunnigan says. It doesn’t matter if they’re a part of the same company and located just across town from one another.
“There’s no clear road map for a shop saying, ‘This is what you do,’” he says. “You have to find your way of doing things that fits what you do.”
He realizes already that he’ll need to alter his approach slightly to implement the team structure in his other two locations in 2014.
“You’ve got to take things slowly, but also stay true to that goal,” he says. “You’re going to have good weeks and bad weeks, but you have to have that direction, and you need to know where you’re going, so everyone can work together to get there.”
