There are a lot of challenges facing the collision repair industry on a daily basis. You don’t need me to tell you that. But what I am here to tell you is that there are often very clear—even simple—solutions to these challenges.
Let’s take scheduling jobs as an example. It’s one of the biggest challenges you face in your business, right? Proper scheduling will ultimately dictate your success—the performance of your shop in terms of CSI, cycle time and profitability. Poor scheduling can lead to bottlenecks, roadblocks, stress, low employee morale, and, ultimately, low profitability.
So, let’s look at scheduling: The question I get when I walk into shops all around the country is, How should I schedule my workload?
Far too many shops approach scheduling as an in-on-Monday, out-on-Friday grind. That system is antiquated, and, frankly, it doesn’t work. For a shop today, there a number of approaches for better scheduling.
The first option is the easiest one. Let’s say you want to do $200,000 in sales each month, and hypothetically, your average repair order (ARO) is $2,000. Then, you’re going to need 100 cars each month. There are usually 20 work days in a month, so that means you need five vehicles each day.
That’s five cars—in and out—each day you’re open. Simple, right? Well, what about if you get five bumper jobs one day, or five hard hits? While it’s better than no scheduling system at all, it still leaves you scrambling to average out your work mix and sales. Speaking of sales, here’s your second option: Do that same initial breakdown—$200,000 in sales per month; a $2,000 ARO—and focus on the amount of days compared to sales. Twenty work days and a $2,000 ARO; we need $10,000 in work each day to hit our goals. That’s great. We now have it all figured out, right?
OK, but what happens if you work on a Porsche or a Mercedes? Just a couple headlights and a front bumper on one of those might cover that $10,000 day for you. How do you balance that work out then?
So, that all brings us to our third option, and this is what I teach. Forget about that $200,000 number. Instead, let’s look at your best month from last year. In this scenario, maybe it’s $240,000 or $300,000. How did you get that number? Look at that month’s vehicle mix; that’s where the answer is.
I like to break jobs down into five categories, simply by number: Category 1, Category 2, Category 3, Category 4, and Category 5. These categories are based on labor hours for each job. Some people like to say light, ultra-light, etc. I think it’s simpler to stick with numbers, because a Category 1 for one shop might not be exactly the same for another. Either way, you need to make the distinction. Many management systems allow you to do this, and your rental car company will also be able to provide this to you. Now, once we have those designations, what we do is go back and look at our statistical data for that highest month last year and determine two things: The first is how many of each job category you delivered to achieve your sales goal for that month. You’re going to have X amount of Category 1s, X amount of Category 2s, and so on, right? Then, all we do is take the amount of days we’re open, and start plotting out how many of each job category we need each day to meet our high-performing capacity (those total labor hours).
The end result, you might find you need to do two Category 1s on every other day; you need two Category 2s every day; three Category 3s every other day; and so forth. You see how this works?
It might sound a bit daunting, but I promise, it’s not. You simply schedule out based on statistical data of a prior month’s work mix to reach your capacity for each day. It’s as simple as that.
Now, you might’ve noticed that I mentioned scheduling a job to start on a Thursday. Contrary to what many of us have been programmed to believe, scheduling for Thursday and Friday is the only way to make a real scheduling system work. You must have consistent work flow every day of the week you are open!
I know the negative story you’re going to tell me right now: “Mike, the insurance carriers won’t let me do this,” and “But, Mike, customers don’t want to leave their cars over weekends,” and so forth.
Honestly, my friends, it is easier than you might believe.
Aaron Marshall of Marshall Auto Body in Wisconsin developed a great solution to the first: backloading the schedule. Let’s say he’s trying to schedule 25 jobs over five days. If he fills up Monday through Wednesday first, that means he’s trying to schedule those final 10 people in on Thursday and Friday. That’s only 10 chances to fill 10 spots, right? Well, he starts the other way; he schedules Thursday and Friday first, giving himself 25 chances to get those 10 Thursday and Friday slots filled up. He stacks the odds in his favor.
And what we’ve done in a lot of the shops I work with is put a sign on the counter and website that says, “Ask us about our Thursday and Friday drop-offs.” People ask, and we have a promotion tied to it to encourage them to do it. Maybe it’s a free detail, or a four-wheel alignment down the road, or even just a Starbucks card—it’ll work.
Carriers can be a little tougher to convince; that is, until you show them that it works. With a client in North Carolina, we went to a carrier who was against this and said, “Give us 30 days, and if at the end of that time our cycle time isn’t best in class for you, we’ll absorb the cost for weekend rentals.” Well, at the end of 30 days, they called to tell the shop operator to keep doing it. His cycle time was now the best in the state for that carrier.
The bottom line is that it works. I had a large MSO that did nothing but switch to this system, and it shaved 16 percent off its cycle time. This was a shop that had more capacity, and with the 16 percent decrease in cycle time, it added an identical 16 percent in sales.
Improved sales starts with improved cycle time—and all of it starts with proper scheduling. Change now. It’s not as daunting as it seems. We have many—too many—challenges we face on a daily basis. Don’t put yourself behind before you even start.