Quality Comes from SOPs

Aug. 1, 2011
Documented Standard Operating Procedures can help you succeed where memory fails.

A while back, one study showed the average person couldn’t hold more than eight items in mind at any one time. Anything over that number would be forgotten or neglected. As I’ve gotten a bit older, it seems how much I can hold in mind has dropped a bit below average. As I make the rounds of shops in my area, I notice quite a few older shop owners who may also be experiencing a similar decline in short-term memory. We learn to compensate for minor forgetting in general, but at the shop this decline may be affecting the bottom line.

In a busy shop there’s a lot to keep in mind and the larger corporate and franchise shops try to control the multitude of tasks to be performed with standard procedures and policies. Does this eliminate costly errors and omissions? Probably not completely, but beyond a doubt these measures prevent more mistakes than someone can who tries to keep it all in mind. And with today’s emphasis on lean processes and procedures, getting controls out of one’s head is even more important.

“The creation of policy and procedure standards is the most important function of any body shop’s management.”

It’s likely that the real father of the lean movement was Philip B. Crosby, whose 1979 book, “Quality is Free” popularized the idea of “zero defects.” More than 15,000 executives of major companies attended his “Quality College” in Winter Park, Fla. Why? His studies showed that 25 percent of gross sales for manufacturing companies were lost due to mistakes, and for service companies the loss was 40 percent—doing things wrong or doing them over. For a service business like collision repair, that loss would be devastating. Crosby’s key message was: “Doing it right is not just easier and smarter. It is incredibly profitable.” And this is the mantra of the lean movement today.

While most of Crosby’s recommendations have been implemented by those who use the lean approach in their business, every day I still see shop personnel relying on memory to order parts, to give repair instructions to technicians and more. Many of these shops have computerized management systems and subscribe to information sources like Alldata, but looking up information takes time. In the heat of the moment, the reliable source is often neglected. The result is often a return to the 1979 level of major mistakes.

Why do people often neglect the bottom line and take a chance on what may be a flawed memory? The June 6, 2011, issue of Time magazine features an article on “The Optimism Bias.” Author Tali Sharot says, “a growing body of scientific evidence points to the conclusion that optimism may be hardwired by evolution into the human brain.” Because of this, he notes, “overly positive assumptions can lead to disastrous miscalculations.” We can be overly optimistic about how accurately we remember things. In general this may not be too important, but in business it can be costly. That additional time taken to get accurate information should more than pay for itself.

Beyond that, the purpose of policy and procedure—to overcome human error—is incredibly valuable for a typical body shop. Philip Crosby says if “management does not provide a clear performance standard or definition of quality ... the employees each develop their own.” The creation of policy and procedure standards is the most important function of any body shop’s management. Sometimes even the smallest shop owner understands this. I worked for a shop for a short time that had fewer than a dozen employees, including the estimators and bookkeeper, but the shop owner was sharp enough to realize he needed a job description manual for every employee. I’m not saying this shop didn’t have occasional chaotic moments, but there than there would have been if everyone hadn’t been absolutely certain of their responsibilities and duties.

The two elements that I’ve observed to be most troublesome are time and space. Everyone works at a different pace, and yet jobs must be completed more or less on time with no loss of quality. When people are rushed to meet a deadline, that’s when mistakes are often made and quality compromised. The best procedure policy sets incremental completion times and early alerts when a completion time for any stage of repair is missed. This allows for speeding up other steps to compensate for the delay. This is just a one-time policy that helps minimize error. Space is often an individual problem because it raises primitive territorial issues. A wise manager allocates very specific space to each employee and empowers him or her to control their own space and to decide when and if they will share.

Just a few elements of policy and procedure can begin to overcome human error, lapses of memory and unrealistic optimism, and even a small beginning is better than letting arbitrary, uncontrolled, momentary decisions reduce the bottom line.

Tom Franklin, author of Strategies for Greater Body Shop Growth, has been a sales and marketing consultant for more than 40 years.

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