Owner pursues lean by efficient use of space, reducing wasted effort
Tony Rivera tends to think in threes, applying his often-repeated mantras that achieving success in the body shop business entails quality, quality, quality and customer service, customer service, customer service.
"I preach that daily," says Rivera, citing frequent pep talks with staff. "A lot of stuff is repetition. We have a pretty smooth operation, but most errors come with customer service and quality. Basically, what it boils down to is this: If the customers aren't calling the insurance companies, the insurance companies are happy with us."
Rivera has two shops in – Hoffmantown and Enchantment – in the Albuquerque, N.M., area. He's addressing a zoning issue about a third location to open next spring. The Hoffmantown operation recently moved into a new $6-million facility that has undergone $1 million in body-shop-specific improvements. The building previously housed a moving company warehouse.
An overriding philosophy behind the business is executing the least amount of moves for all parties throughout the entire repair process. It covers the least amount of moves the customer, car, technician, estimator and parts all have to make.
"Walking into a shop, you can see and feel if correct procedures are in place," Rivera says. "If not, employees aren't happy, customers aren't happy, insurance companies aren't happy, and, more than likely, you'll have quality control issues."
When an accident victim arrives, the staff tries to make the process as seamless as possible. The client is promptly greeted by the receptionist and immediately turned over to the customer service representative whose primary role is to update the steps being implemented.
The car's interior is inspected to ensure sunglasses, garage door openers and other personal items are removed. Drinks are provided, and children are presented with coloring books as they retire to the waiting room, which features a big-screen TV and comfortable furniture.
"It's more like a lounge," Rivera says. "The customers fall asleep on the couch, and their kids will start coloring on the table. All they need is a remote for the TV, and it's just like they're at home."
Rivera spent more than $90,000 on the heating, ventilation and air conditioning system at the Hoffmantown site. The office and lounge are air conditioned. Swamp coolers, which work well in low-humidity climates, comfortably moderate temperatures on the shop floor, and winter's chill is kept at bay via radiant heat.
"Even when you're in the paint shop you can't smell paint," he says. "It makes for a better work environment."
Although the paint systems are set up to handle waterborne, it's not yet required in New Mexico.
"I'm going to wait because waterborne can be refined more," Rivera says.
Managing work flow
Rivera devised the precise design elements that dictate an efficient work flow. The repair process progresses from one stage to another, with each located in a separate area of the shop. A vehicle goes in at the estimating location, is torn down and emerges out the other end as a finished product. The building has separate offices for insurance company representatives and car rentals.
The floor plan also includes classrooms for training.
"We train them from zero up," Rivera says, noting there's no shortage of young candidates eager to learn. "There are a lot of kids who love cars but don't know how to be a body man. If you look in our employee parking lot, all the cars are customized. On Friday evening, they all go to the race track."
Set on four acres of land, the $500,000 construction bill to remodel the existing 64,000-square-foot facility was paid in cash. Another $500,000 was invested for equipment. The contractor was selected through word-of-mouth recommendations and consulting with the local Better Business Bureau.
Rivera's sense of frugality coupled with wise money management keeps the enterprise flush.
"When times are good, we sock it away," he says. "Every deal I've made has been in a down economy. In a depressed economy, per-square-foot pricing on commercial property has taken a hit, maybe worse than residential. That in mind, save in the good times, and spend in the bad times. Bank financing is still available, so if your credit rating is perfect, you're good to go."
Other options include owner financing, lease with an option to purchase and lease to purchase.
Marketing matters
Aside from Rivera's stellar word-of-mouth reputation, potential customers are lured by an array of 24 billboards along two highways in the cross hairs of heavily-traveled interstates in New Mexico. Rivera has spent about $50,000 to $60,000 on the signage plus $5,000 to $6,000 for radio advertising. A social media campaign is being developed.
Eight direct repair programs (DRPs), with two under negotiation, account for 85 percent of business.
The pursuit of additional DRPs is moderated by Rivera's reluctance to overbook his shops. He has few qualms about using aftermarket parts. Everything is pre-fit before painting to prevent problems. If a job involves 16 bolts, the shop might install four to check the fit.
"Customers are educated, and they have a good eye, so we make sure the gaps are to manufacturers' specifications," he says.
In addition to the body shop operation, Rivera, along with business partner Kent Knox, are marketing a street-legal, low-speed vehicle (LSV) – called an Oreion/Sand Reeper – set for a nationwide launch to American dealerships in November. The LSVs are assembled at the Hoffmantown location using Chinese components. The motor is a model used in the John Deere XUV825 side-by-side ATV.
Rivera and Knox traveled to a Chinese factory to oversee the design. They plan to return after attending the Specialty Equipment Market Association (SEMA) show in the fall for additional modifications that include a supercharged engine. Following a three-year process, the vehicle will be certified by the U.S. Environmental Protection Agency and the Department of Transportation. Compliance with California's stricter standards is pending. Information about LSV is available at www.sandreeper.com.
Success factors
Reflecting on a contented yet busy personal and business lifestyle, Rivera, 51, attributes much of his successes to a rock-solid lifelong faith in Jesus and Bible messages: "That will give you all the information you need."
Rivera's father, Larry, who owned a janitor business Tony joined at age seven, is another key influence.
Always a go-getter, Rivera purchased a 1977 box van that had been used as a snow-cone truck. He transformed it into a mobile automotive appearance-reconditioning enterprise that attracted a multistate clientele of car dealers. He attacked dirty carpets, cigarette burn holes in leather seats, compromised vinyl roofs, rock chip remediation and paintless dent repair.
"Jobs got so big we were painting whole sides of cars," he says. "We were bursting at the seams."
As many as 70 vehicles would be parked among the neighbors' yards, so a building established to serve the car dealers evolved into a retail collision repair facility when a local shop owner retired.
As word spread that Rivera had developed a skill at designing effective work-flow layouts aimed at eliminating internal traffic jams, insurance company representatives began sending over body shop owners to observe his highly organized production strategies. This lead to a consulting business on the side because people kept telling him, "Why don't you just go into business visiting shops because you turn them around so fast?"
Rivera rigorously resists any attempts at a cookie-cutter approach to implementing lean production. Addressing his pet peeve of seeing shops that are too crowded to function effectively, Rivera stresses a design must individually leverage the structure's given characteristics.
"You have to look at the building because each one has different circumstances," he says. "It doesn't sound like a big deal, but it is."
