Having spent many years as a trainer and consultant for paint companies, many shops in the industry connect me most with refinish-related topics. In fact, I’ve had several readers who know me express surprise that in my first year writing this column for ABRN, I’ve barely touched on anything related to the paint shop.
Part of that is now as an independent consultant, I’m assisting shops with so many different aspects of their business: estimating, scheduling, motivating employees and the other topics I’ve touched on in my columns this past year.
But I do now want to return to the topic of paint shop productivity, because it remains such a critical profit center for collision repair businesses, and because it’s an area where I’ve often seen the most need for improvement.
Let’s start by looking at some KPIs for the paint shop, numbers you should be measuring to gauge your performance. Take paint shop proficiency, the number of paint labor hours produced divided by the number of clock hours the paint shop is open. You should be hitting 175 to 200 percent. So in an 8-hour day, your painter should be producing 14 or 16 paint labor hours.
Listening To Your Painters |
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Being profitable in the paint shop starts with listening to your painters. See how real shops changed things in their paint areas and saw fast results in this whitepaper. |
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How about you paint materials costs per refinish labor hour? Add up your materials costs for a given month and divide it by the number of paint labor hours you produced in that month. The industry average is about $17.20. But top performers have paint material costs per refinish labor hour in the $12 to $13.50 range.
Your paint materials gross profit should be in the 45 to 55 percent range. Some shops are beating even that.
What’s your “booth cycle time,” the number of jobs you move through the booth each day, or the length of time each job is occupying your booth? For top performers, booth cycle time is between an hour and 90 minutes. Those shops are typically producing 7 to 9 units in an 8-hour day. The average shop across the industry is doing only 3 to 4 units per day. So the top shops are doing twice that. If you’re running an average repair order of $3,000, think about the difference that pushing three or more additional jobs per day through your booth would make.
Examining (and then improving) paint shop performance isn’t limited to what happens only in the paint shop itself. Your estimates and work orders play a key role as well. Check what percent of your estimate is for paint materials. For top performers, that’s about 10 to 12 percent of the total estimate, before sales taxes. A $3,000 (before sales tax) estimate, for example, should have a minimum of $300 in paint materials.
So what should you do if you’re not hitting these numbers? That means there’s room for improvement in your paint shop performance.
Start by thinking about all the factors that play a role in your paint shop’s KPIs. Here’s my partial list:
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Paint shop personnel’s skills and training. Do you have the right people, with enough current training?
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Product selection. Is there something out there that would work better for your shop?
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Paint shop tools and equipment. Is your booth as efficient as it can be? Are you using all the color matching tools available?
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Maintenance and working order of paint shop equipment. Are your booth filters being changed on a regular, tracked basis, for example?
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Use of the automaker and paint manufacturer procedures. Are you following the steps the experts call for?
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Inventory management. Do you have systems in place to have just what you need on the shelf, when you need it?
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Paint department processes and practices. Do you have SOPs that maximize productivity and consistency?
- Quality of the shop’s estimates and work orders. Are you billing for all the refinish procedures you are doing?
There obviously are a lot of moving parts. And all those things will be the focus of my upcoming columns. I’ll be digging into each one of them to help you understand why your paint shop may be under-performing – and how to get that fixed.
