If you want people to perform, measure their performance. That’s a philosophy that has been widely adopted within the collision repair industry in recent years. Many shop owners rave about how much better their businesses have been running since they began plotting performance measurements—a discipline that forces them to focus on what is really important to the success of their operations. But shop owners also are finding diminishing returns in measuring the same things year after year. Increasingly, they are looking to identify new and more revealing performance criteria that can generate even more direct benefits.
Atomic Auto Body of Richland, Wash., is one shop that has been particularly innovative about what it measures—and has experienced significant performance improvements as a result. “I’ve got numbers nobody else measures,” says Mike Young, president of Atomic Auto Body (which takes its name from the plutonium industry that once thrived in the area).
One of the most useful, yet seldom studied, measurements is the hours per day that a vehicle is touched (or worked on) by a technician, says Young. “If you increase the touch time half an hour, the business impact is huge,” he says. “The more you touch the car, the more the dollars per day goes up and the more a technician’s pay goes up. We said, ‘Let’s eliminate wasted motion.’”
When Atomic first began to focus on the number of hours that a car is touched per day, technicians were astonished to learn that their average number was only three-and-a-half hours per day. The rest of the time, vehicles were waiting to move from one area of the repair shop to another. By focusing on that particular measurement, Atomic has been able to increase it to between 4.8 and 5.5 hours per day. In contrast, the industry average among companies that measure hours touched per day is about 2.5 hours per day, Young says.
“Scheduling is my responsibility,” says Young, who believes some people in the industry have tried to oversimplify that process. “There are too many ways a car can drop dead.”
Over the last five years, Young has fine-tuned his scheduling process. Each week, each technician receives a flow chart that shows cars listed in order by delivery time, with deadlines indicated by day and time of day. Also critical to the process is a daily production meeting. Early each morning, technicians spend between eight and 15 minutes going over the status of each car and what time each car will move from one area to the next. “We look each other in the eye and make commitments to each other,” he says.
Young’s focus on touch times and delivery times began, in part, when he learned that one of the nationwide consolidators was guaranteeing that it would complete a $1,700 job within 72 hours—an average production number that Atomic has consistently matched or exceed for the last 12 months. Sooner or later insurance companies will begin measuring shops by delivery times, Young predicts, adding, “We’re trying to stay ahead of the curve.”
In its focus on meeting deadlines, however, Atomic has taken care not to lose sight of quality. The company’s customer satisfaction index, measured by the percentage of customers who say they would refer a friend to Atomic, has run at about 99.3 for several years. “We’re in a couple of DRP programs, but 80 to 87 percent of our business is from referrals,” he says. “We’re not just processing jobs efficiently, but we’re also doing it in a manner that keeps people happy with us.”
One result of that efficiency is that Atomic Auto Body was named one of the 2004 Collision Businesses of the Year by Assured Performance Network at NACE. The shop won the “Peak Performer” award for maximizing profitability.
Young credits the company’s success in that area to its excellent employees, including several who have been with the company for more than 20 years. “I take our hires real seriously,” says Young. “I look at it as a lifetime commitment to these guys. If you have someone who can do good work and has the right work ethic, and core values of honesty and integrity, you want to do whatever you can to hold on to him.”
Young says one of his biggest challenges as a shop owner is that he is not what is sometimes called a “people person.” Like many shop owners, he began as a technician, initially working for his father, who started Atomic Auto Body in 1965. “I was the last guy in the shop who would take a job from start to finish,” says Young, noting that such technicians are now a dying breed. Since becoming a partner in the business in 1975 and taking over management when his father retired nine years ago, Young has made an effort to develop his personnel management skills. He attends seminars and reads books on the topic. “Learning to manage people in a productive manner is very important,” he says.
Participation in a development group with other shop owners also has been helpful for Young, both in terms of helping him to refine performance measurements and in terms of softer, but equally important, issues. “I use this group to recharge my batteries,” says Young. “I’ve got to get out of this place once a quarter. I get sucked in and find myself working in the business instead of working on the business.” Young has been involved with the same group for nine years.
One area Young wants to focus more on is marketing. Currently this consists of team sponsorships and sponsorships of public service announcements about vehicle safety. But he soon hopes to hire a dedicated marketing person. He also plans to continue to refine the performance measurement process with an eye toward further performance gains. “We’ve just started to scratch the surface,” Young says. “You need to figure out what more you can do with what you’ve got. We will continue to fine tune what we’re doing and get better at what we’re doing.”
SNAPSHOP
Name: Atomic Auto Body
Location: Richland, Wash.
Size: 10,500 sq. ft.
Volume: 80 to 90 repairs per month
Employees: 15
