Experiment on a Daily Basis

March 29, 2010
A mission-minded approach to business—and a keen focus on limitations—drives the success of Rydell Collision Center.

In any business, it’s not hard to theorize about making operations more efficient. And at a lot of businesses, the same-old barely-working process is often a safer alternative than risking failure. Not so at Rydell Collision Center in Grand Forks, N.D. Here, trial and error is not only a method of discovery; it has become business as usual.

Experimenting for Innovation

There’s no reason to think you’d find much auto body innovation in North Dakota. The state is dominated by agriculture, and Grand Forks—home to Rydell Collision Center and its supporting Rydell GM Auto Center—is a small city of just 50,000 people. And yet Rydell Collision repairs nearly 18 cars a day, with total sales exceeding $4 million last year.

Rydell GM Auto Center has been operating since 1954. Founder Leonard Rydell sold the business to his son Wes in 1976, and the Rydell Group now has 68 dealerships in 11 states. About 30 percent of the collision center’s business comes from Rydell dealerships, and the rest is from the Grand Forks community and the surrounding area.

Unlike more conservative shops, Rydell Collision Center finds itself in constant flux as owner Wes Rydell and body shop manager Randy Sattler take in new management ideas, visit other body shops to see what they’re doing and make changes to the Rydell repair process in search of better customer service, faster cycle time, or more efficiency. They’re hoping eventually to have a process that other shops in the Rydell Group can emulate.

All that experimentation could get chaotic if it weren’t managed properly. But Rydell has a few tricks up his sleeve to guide the shop’s actions even when success is uncertain.

Mission and Values

Rydell Collision Center’s mission statement sounds like a lot of mission statements you’ve heard: “…to be an industry leader in providing unmatched quality automotive products and services.” But it’s the management philosophy that brings a real spark to that statement.

Five components of the mission statement are considered critical to the shop’s success, so much so that employees say those principles actually help them decide whether to make a change, throw it out, or replace it with something else. Three points are particularly relevant to Rydell Collision Center employees and customers alike:

• Customer Enthusiasm: Completely satisfied customers who recommend us to family and friends.

• Employee Satisfaction: We attract the best and they stay with us long term.

• Ongoing Improvement: Every day is a starting point from which we improve.

“We didn’t have this kind of thing at the shop I worked at before Rydell,” says Brian Hill, Rydell’s production manager. “It really gives you something to go by. I’ve heard it expressed as, ‘If you’re saving Wes money by not taking care of the customer, you’re saving money that he doesn’t want.’ I’ve also heard it said that you’ll never make the wrong decision if you make the customer happy. That makes decisions a lot simpler.”

Theory of Constraints

Mission and values statements go only so far in guiding an employee in how to do a better job. At times, a big-picture way of looking at how a workflow moves is necessary in order to make that workflow more efficient. Owner Rydell and shop manager Sattler have experimented with many big-picture ideas in their time together. One concept that has helped them revamp the shop’s workflow for the better is the theory of constraints, or TOC.
The theory of constraints is a management philosophy developed by physicist-turned-business innovator Eli Goldratt. The theory turns on the idea that while complex processes have a whole slew of variables, only a few of those variables can actually limit the production of that process. By managing around those variables, their ability to trip you up is mitigated.

For Rydell, one major point of constraint in its 25,000-square foot shop—which has 26 stalls, 16 on the metal side and 10 on the paint side—is the paint booth. Because only a certain number of cars can go through the paint booth in any given day, that is the point in the shop’s workflow where bottlenecks happen and service slows down. For that reason, Sattler explains, the workflow process has been reimagined to make that point less constraining.

“The idea is to engineer everything so that if the paint booth is open, there’s a car there ready to go in,” Sattler says. “Not five cars, and not zero cars. It’s optimizing time and work so that the paint booth gets used optimally and doesn’t hold up the process like it could if we didn’t manage it right.”

So how do they do that? By maximizing touch time.

Touch Time Focus

Every car that comes in to Rydell Collision Center is disassembled, repaired, painted, reassembled, cleaned up and ultimately moved off the floor. But once a given car is disassembled, it isn’t immediately moved to the shop floor for repair. Instead, it sits outside until it’s fully “kitted.” That means that before a car goes in for actual repair, it gets a complete repair plan, full approval for all repairs, any needed parts and an estimate of the in date, touch time required and out date. The car then sits outside until all parts arrive and nothing is missing for the full repair job.

Once the car makes it onto the floor, the expectation is that the vehicle never stops getting worked on until the end of the day or until the job is done. Rydell Collision Center actually limits how many cars are on the shop floor at any given time.

“It allows us to have more cars on site, and once they’re fully kitted, we can pick and choose jobs to fill in efficiently,” Sattler explains. “Having more choices lets us pick quick jobs when we have a slot for them, or to match the right job to the right technician.”

That’s different from many other shops, where cars are worked on until they can’t be worked on any more because a part is missing or a repair hasn’t been approved. And it’s very different from the flat-rate or commission mentality, which often encourages a shop to have as many cars in play as possible.

It may sound counterintuitive, but all of Rydell Collision Center’s repair stats have improved significantly. Since the shop began using the theory of constraints and maximizing touch time, sales have increased 40 percent. They repair nearly 18 cars a day, compared to eight or nine per day before. Their cycle time was seven to eight days, but now it’s between four and five days, because on any of those working days, that vehicle is getting much more touch time each day than it used to. Compared to an industry standard of four hours of touch time per working day, Rydell’s working days include seven to eight hours.

To accomplish this, there has to be constant communication between the metal side of the shop and the paint side of it. If a car is waiting for metal work, and one of the seven paint technicians is waiting for something to do, the two can be matched up and the touch time can go on. “We might have multiple technicians helping out with one repair, or the prep technicians on the metal side if there aren’t any cars to paint at the moment,” Sattler says.
Stats like these are tracked on a body shop scorecard, and posted where the technicians can see it.

Emphasis on Employees

At Rydell Collision Center, they pay technicians hourly, rather than on commission. That’s not unheard of in the industry, but it isn’t the usual approach, either. Instead, Rydell has a bonus program in which there’s a pool of money that technicians get a part of annually based on certain criteria.

“Wes wants the best people working for him and he also wants them to feel comfortable that no matter what they’re asked to try, they won’t have to worry about their paychecks,” Sattler says.

People who work for a flat rate or a commission tend to feel like they have more control over their destiny, he explains, and it’s not always easy to convince them that the hourly way is better. But it helps to point out that when slower times come around, employees who work for a commission have to worry about how they’re going to make enough money. “I come from that world, and when the slow time comes around, you’re starving,” says Loren Shereck, metal repair foreman at Rydell. “Here, Wes takes care of you, and we’re constantly busy so there’s no slow time to worry about anyway.”

Still, the constant change can wear on employees, and Sattler says that some of the management challenge is to make it clear why they’re trying something new and what they hope it will accomplish. It all means that leadership is a huge component of coaxing employees to roll with the punches all the time. “Wes has uncanny ability and drive, and it can be frustrating to constantly be using trial and error to see if something works,” Sattler says. “But the big picture is that if we hadn’t tried all these different things, we wouldn’t be performing at the level we’re at right now.”

People as Well as Process

Rydell’s affinity for experimentation isn’t the only thing helping the shop get ahead. The staff is savvy about word-of-mouth marketing. Shops in larger metropolitan areas can often get away with things that rural shops can’t, because in smaller populations, word of mouth can either be deadly or a godsend. In Rydell Collision Center’s case, it’s the latter, and one of their strengths is that they never forget that. “We have some very good competitors in town,” Sattler explains. “We have to remind ourselves that no matter how much process-oriented thinking we do, for the customer, they’ve probably been through a traumatic experience. It’s not just another car, it’s part of their life. We’re dealing with people and their feelings, not just our machines and tools.”

That’s why, in addition to installing another paint booth this past summer, Rydell remodeled its front office area. The previous design had been an open space, where it was possible for others to hear what customers were talking about. The new design incorporates partitions. That way, customers who might’ve been uncomfortable talking about deductibles and payments and accidents now feel that their privacy is being respected.

Rydell Collision Center is a work in progress, and Rydell himself has made it clear that he would rather try something new that might be better than make do with the old. It gives his employees the confidence to make suggestions, try processes, make the call that something isn’t working and adjust to new conditions almost daily. “It can be frustrating to change things all the time,” Hill says. “But Wes always says, don’t worry about the money part of it. We’re trying it until we know whether it works. We’re keeping the ideas that work and trashing the ones that don’t.”

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