Improving Efficiency with a Shop Management System

Aug. 1, 2011
A shop management system can make your business more efficient and maximize profit potential—if you know how to use it.

When Larry Proctor took over as shop manager at Wheels of Chicago Body Shop in September 2010, he immediately noticed a huge inefficiency at the facility: “[Employees] were manually counting the number of cars coming in each day,” Proctor says. “They were tracking parts and technician hours manually.”

The shop’s management system, Mitchell RepairCenter, could have been doing those things automatically all along. Needless to say, Proctor put new processes in place to get the system scheduling repairs, ordering parts and communicating with employees throughout the shop.

“That took the manual work out of the equation,” Proctor says. “Everything became automatic with the click of a button.” Shop efficiency shot up 10 percent.

“There’s definitely room for improvement in the industry when it comes to using management systems.”
—Willis Colpitts, senior production manager, Mitchell International

Efficiency is the name of the game in the collision industry today. But many shops don’t fully understand what their management system can do for them, especially when starting out, says Willis Colpitts, senior product manager for Mitchell International.

“There’s definitely room for improvement in the industry when it comes to using management systems,” he says.

In fact, management system providers constantly add tools and features—beyond counting cars and tracking parts—that can power up your shop’s efficiency.

Here’s a primer on some features you’ll want to put into play so you can all but automate your profit potential.

Eliminate Manual Labor

Management systems offer tools and generate reports that automate many tasks shop operators used to have to do manually, says Ed Rachwal, president of Designer Systems, a Massachusetts-based training consultant and distributor covering New York and New England.
Tax prep is one example: Management systems integrate with accounting software, so shop operators no longer have to hand the accountant a heap of repair orders and invoices at tax time, Rachwal says.

And yet, most shops still don’t use management software. Only 25 percent of collision repair shops reported using such a system in a 2009 Romans Group survey.

Shops without a management system typically use spreadsheets to track business performance, Colpitts says. The problem: Spreadsheets don’t produce the detailed information shop operator’s can use to discover where they could improve the business.

A shop management system, Colpitts says, helps highlight operational adjustments that could be made to create a more successful shop.

Master the Management System Basics

Even the basics of a shop management system can be powerful tools for better business performance. These systems help shops:

• Track profitability. Management systems track where a shop's sales come from and the facility's profitability on each of those sales.
For example, you might know that a particular insurance partner provides a certain percentage of your total business. A software management system easily keeps tabs on how profitable that percentage of your business is compared to all other sources of business, Colpitts says.

That information can help you decide whether to keep or can a particular DRP agreement.

• Track tech productivity. Proctor says he’s able to track the work performed by each technician each day. That can help you understand your shop’s profitability on labor—and gives you insight into each tech’s performance come review time.

• Order parts. Handle this task through your management system, and you’ll automatically track part discounts, returns, deliveries and pricing changes.

• Analyze estimates. The differing details requested by your various insurance partners no longer need give you a migraine. After an estimate is written and a repair order is opened in the management system, Proctor says, an analyzer component scans the estimate for inaccuracies. Things like incorrect labor rates or necessary repair processes that weren’t initially included in the estimate are automatically pointed out, helping you comply with myriad insurer criteria.

In this way, the analyzer also acts as training tool for your estimator, Proctor says. A good estimator will make note of the analyzer’s advice and make improvements in their estimating process. The result: more skillful estimators and fewer supplements.

Automate Beyond the Basics

Once a management system has automated your basic tasks, you can explore the potential of your software for continually improving your processes.

Frank Terlep, CEO of Summit Software Solutions Inc., recommends looking at as many non-value-added processes as possible and considering how your system can automate those. Take a look at:

• Wireless technology. Digital cameras, smart phones and tablet technologies allow you to capture photo and video that improves the estimating and repair ordering processes. Photo and video can also instantly, wirelessly improve customer service as you keep clients updated about the progress of their repair. On both fronts—with insurers and cutomers—the digital documentation improves office productivity dramatically, Terlep says.

• Automatic updates. Management systems can automatically send vehicle status updates through email, text messages and the shop website as vehicles move through a standard repair process that’s configured in the management software, Terlep says. This also helps improve communication with consumers and insurers.

• Access to OEM repair information. It’s imperative that estimators, production managers, parts personnel and technicians have access to the latest OEM collision repair and technical data, Terlep says. Management software delivers through every aspect of the repair process.

• Process management and measurement. Management systems allow shop operators to measure business process efficiency, as well as technician efficiency. Measuring technicians used to be the only option. With many shops adopting lean models, shop processes need measuring as much as or more than individuals, Terlep says.

• Digital documentation. Provide consumers with paperwork, pictures and videos through email, text messages, websites, CD, DVD or memory sticks. The ability to go paperless saves time and money while reducing paper waste. (Check out FenderBender’s “The Paperless Shop” article for more on the benefits of going paperless at

• Audio recordings. Record and store phone conversations related to specific files. Audio recordings can replace or supplement written notes in a file. Shop operators can then share vehicle status updates with consumers through recorded audio messages, Terlep says.

• Integration with digital marketing software. Import customer data for email and text-based advertising, marketing and customer retention activities. Collect positive customer reviews, and manage digital ads and promotions through email, text messages, websites and Facebook pages.

Every management system offers its own particular functions, of course. Some system providers, such as Mitchell, offer the systems in a modular forma, so shops pay to access the additional features that best fit their shop.

Colpitts says a shop’s monthly cost for a Mitchell system, for instance, could range from $50 to $500 a month, depending on the tools you want in your facility.

Lessen the Learning Curve

Management systems offer literally thousands of features, and discovering and mastering those most beneficial to your shop will require some time.

Proctor says he learned to use his management system simply by tinkering around with different features. It took about three months to become comfortable with the new tools, he says. A little tutoring might help shave some time off that learning curve.

“You can’t use your management system properly without receiving some training,” Colpitts says.

There are so many nuances within the system, and it can take time to understand how to use everything—and the benefits of using it—along with a bit of instruction. Training options abound. Check out:

• Collision Industry Management Solutions (CIMS):

• Collision Workforce Assistance:

• Automotive Process Management Associates:

• System providers The most direct and often helpful place for training is your vendor, Rachwal says. Contact your system provider for information on the training services they offer.

Implementing a Successful System isn’t Automatic

The key to successfully implementing a shop management system comes down to your ability to be disciplined in how you work, Rachwal says. It is far from automatic.

“You can’t just put in a management system, continue to do things the way you always have, and expect to gain the benefits,” Rachwal says. “It takes structure throughout your shop to make the implementation worthwhile.”

“You can’t just put in a management system, continue to do things the way you always have, and expect to gain the benefits.”
—Ed Rachwal, president, Designer Systems

A few standard operating procedures might help.

Parts ordering is a good example, Rachwal says. A management system will automatically track part discounts, returns, deliveries and pricing changes.

But employees may still be tempted to pick up the phone and order parts as they always have. Continuing that old practice while implementing the new one might lead to confusion. And clearly, you’ll lose out on the benefits of having the system—efficiency, accuracy, improved profitability—since all those processes could be handled automatically.

“Management systems are one tool that can be used to [create continuous improvement],” Rachwal says, “but shops have to be ready to change their processes to truly become more efficient.”

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