Renewed Commitment

Roland Kuroda could have easily retired from the family business and moved on long ago.

He runs Kuroda Auto Body in a place most of us only think of as a vacation destination: Hawaii, in the town of Waipahu, where his father and uncle started the shop in 1967. His grandfather emigrated to the U.S. from Japan and began doing business in Hawaii in 1938, so Kuroda has deep roots in the area.

He had been working at the shop for more than 30 years when he made a big decision. He was 50, and he had the opportunity to let his lease run out and retire, walking away from the business with plenty of cash for retirement. Instead, he bought a permanent building and renewed his long-term commitment to the shop.

Since then, he has made several efforts to push the shop forward, including the installation of a solar array that is saving him more than $15,000 per year, as well as beginning a lean journey that slashed his cycle time nearly in half.

“This is what I know, this is what I do,” he says of his decision not to let the business go. “Business has been good to me and my family. I’m happy to continue the family business.”

Learning the Business

Kuroda started working at the shop in 1978, when he couldn’t find work as a high school and vocational college shop teacher. He decided to ask his father how he got into the business. He needed a job. So he picked up a grinding disc and started learning how to apply body filler.

“By any means I was not a journeyman. But I experienced enough to know how difficult the work was,” Kuroda says.

His parents had actually discouraged him from joining the business, because it’s tough work and, in their experience, not always profitable.

“They were hard workers, and they ran the business based on hard work. As time moves on, you have to know your costs, you have to know a lot of things regarding business. I had to actually educate myself through our industry,” he says.

In addition to his bachelor’s degree in education from the University of Hawaii, Kuroda has a two-year community college degree in food services. There he learned about controlling costs, accounting, and human resources. So moving to management and ownership was a natural for him.

He has a business savvy that his parents didn’t quite have. He also has good skills in building relationships, which he has used to earn a dozen DRP partners.

“I just look to see what works with us. Ideas, they don’t always work,” he says. “When you find something, you keep going.”

Building for the Future

After Kuroda re-committed himself to the shop, he found several ways to save money and position the business for long-term success:

Switching to solar power. In 2008, Kuroda was slammed with a double blow: out-of-control energy costs and an economy that was in the toilet. So he transitioned to a solar energy system, and reaped thousands in savings.

“We have really, really high rates,” Kuroda says, explaining that the monthly energy bill today would be about $6,500 per month at his 11,800-square-foot shop—if he hadn’t switched to solar power. “What we were looking to was to try to reduce our overhead. And just about during that time, there were a lot of initiatives. We made a business decision that, with the tax credits that were available through both the state and federal government, that we would move forward with this program.”

The system cost $260,000 to build, but so far it is saving the shop about $1,300 per month. The return on investment is about five years, thanks to state and federal tax incentives that Kuroda found through local business services.

“We’re constantly analyzing our business,” he says. “You have to always look for the next thing. What is it that you can do?”

Weighing paint waste. Following his transition to waterborne paint, Kuroda noticed his four painters would often over-mix. To address waste concerns, Kuroda started requiring each painter to weigh leftover base color and post the numbers in the paint mixing room for all to see.

When that process started, the wasted paint began decreasing. In just a few months’ time, Kuroda was able to reduce waste by 8 percent per month for a savings of $2,000 per month. It was a simple strategy that netted big results.

Starting a recyclable scraps program. Each week, Kuroda’s original equipment manufacturer (OEM) partner would drive in from Honolulu and deliver parts. A truck loaded with pre-ordered parts would roll up to the shop, and would leave empty. One day, the truck crew pitched an idea to Kuroda:

Taking the shop’s recyclable scraps before departing. “Basically, they said, ‘Hey, what do you think about this?’ I said, ‘It’s a great idea,’” Kuroda says. “To me it’s a no-brainer.”

He says the shop saves $75 per month in recycling costs, or about $1,000 per year. He has also realized labor savings because his staff no longer spends as much time stockpiling and sorting scrap metal.

Focusing on efficiency. Kuroda is the owner and lead estimator. He’s been focusing on several aspects of lean production, but one important part of it is a complete teardown and repair plan up front. The shop is also focusing on organization and cleanliness, so it created a parts department and parts manager, who organizes parts by repair order.

The shop also made what he calls a global team. Kuroda has six body techs, four painters, and others for support. The team had been getting paid a flat rate, but they are now paid hourly. All of these initiatives have decreased cycle time significantly. It had been at 13 to 15 days, and it’s now 7.6 days, Kuroda says.

Taking the continuous improvement aspect of lean to heart, he started hosting I-CAR Gold classes at his shop. He was also inspired to improve during a visit to Japan, where he noticed how hard people work to please customers. “We need to do whatever it takes to keep the customer,” he says.

Sharing best practices. Kuroda says he likes to network and share ideas with industry professionals he’s affiliated with at AkzoNobel.

“This recession, in some ways it was good because businesses had to retool themselves,” he says, reflecting on the last few years. “They have to be smarter. Not only in how they run the businesses. They had to trim the fat. They had to really identify who the customer is.”

Staying Ahead

It’s not always easy to do business in Hawaii; taxes are high, and rent and commercial property are expensive because land is limited. Traffic in Waipahu—a town in central Oahu—can look just like rush hour in L.A., so there are plenty of jobs that keep collision repair shops busy. There are probably 30 collision shops in the area competing for business, Kuroda estimates.

Kuroda says he doesn’t pay much attention to competition, though. He just focuses on what he can do well. For example, he was the first in his market to switch to waterborne paint, which is not mandated in Hawaii.

“These are the things that our customers in the future will look for, and they’ll want to do business with us because of this,” he says.