Over the last two decades, the collision repair industry has undergone a significant transformation. Trends such as lean thinking, modern estimating, certification programs, and the close documentation of KPIs have left body shops looking starkly different than in years gone by.
And, since 1999, FenderBender has been there to document the industry’s most pressing issues. As part of our 20th Anniversary celebration, sponsored by PPG, we've looked back at the most impactful moments for some of the industry's most prominent leaders. Now, here’s a look at 20 topics that have impacted the industry during the magazine’s time in existence … and a look at how they may alter its future.
SOPs’ Rise in Popularity
Though Brad Buck’s business is rather small, with just five employees, the body shop owner is ambitious nonetheless.
The owner of The Collision Company, in Kirksville, Mo., has met few challenges he cowers from. In 2018, for example, Buck sued a major insurance company (and won) after his shop faced a $10,000 deficit from an estimate that the insurer refused to pay.
And, Buck also aims to have his staff call customers as many as three times per day with status updates on their vehicles.
Those are large orders for a small staff to pull off, but Buck’s standard operating procedures streamline the workflow.
“We have a system, the way we process a claim, and a vehicle, in our shop,” the shop owner says. “If you’re going to litigate ‘short pays,’ you’d better have a very thorough process.”
Earlier in his career, Buck worked at multiple shops in which tension often gripped the back of the shop when repair delays struck. Buck took lessons from that experience, and, as a result, he now rarely encounters such chaotic moments.
“We just don’t get into scenarios like that—and I like that,” notes the owner of The Collision
Company. “I’ve worked in a lot of shops where it’s just always a zoo, [and] customers are upset—kind of what I call a ‘pack-em-in-on-Monday-and-piss-em-off-on-Friday mentality.’ You know, over-promising and under-delivering.’
“So, what I found was, by having a thorough process for your staff in the back, your technicians, and your office staff, it’s not near as stressful.”
Over the last two decades, the days of writing estimates in a harried fashion in parking lots has gone by the wayside. Instead, many shops, like Buck’s Missouri facility, have streamlined such procedures, by plotting out a plan of attack—in the form of SOPs. And, in 2019, those SOPs can be followed by employees via several forms of evolving technology, such as electronic management software, computer tablets, cellphones, or smartphone apps.
Darrell Amberson, the president of operations for Minnesota-based MSO LaMettry’s Collision, has used SOPs extensively over the last two decades. He says that a thorough SOP can make a subtle, yet reasonably significant difference in a body shop’s efficiency.
“They used to be a lot less formal,” Amberson says of SOPs. “In the past, there was an assumption that you can tweak this or that and it’s not going to make much of a difference. Then people started realizing, it does make a difference—and it’s more noticeable than one might think. For example, with lean processes, it might be where shops place equipment; [you could] set up a shop to be more efficient—with shadow boards, for example, where tools are marked on the walls so they always go back to the same place.”
Amberson says it’s especially important to have a clear SOP in place with regard to estimating. After all, the industry veteran notes, shops don’t want to stumble during the initial vehicle handoff at their facility.
As a result, it’s important for shops to continuously analyze their processes in an effort to eliminate inefficiencies where possible.
Buck has refined his repair SOPs repeatedly. He openly admits that, 5 years ago, vehicles would often get dropped off in Kirksville, and the following, time-consuming steps played out: parts would be ordered immediately, the shop would provide an estimated repair timeline of 5 or 6 days, and a vehicle would then be disassembled. Then, inevitably, further damage would be discovered, and suddenly the final repair bill would look much larger than originally anticipated.
At that point, more parts would need to be ordered, supplements would need to be written, and, a deadline would pass and … customers eventually became upset.
Nowadays in Missouri, the first step on Buck’s SOP for addressing typical vehicle repairs is to capture each job while, ideally, avoiding the often drawn-out process of writing an estimate. After all, the shop owner notes, all too often estimates are eventually proven inaccurate, because few automotive repairs are as simple as a dent or a scratch anymore. Most repairs require research and disassembly, due to vehicle advancements.
At Buck’s shop, customers are provided with a flowchart, which can help give an idea of a typical repair timeline. A front office employee calls or emails vehicle status updates to clients at least once per day. (“If a customer has to call and ask what’s going on with their vehicle, or what the status is, that’s a big fail in my opinion,” Buck says.)
On The Collision Company’s shop floor, SOPs are largely finalized in this fashion: when a vehicle is checked in, a detail technician signs off on it and finalizes that repair’s file. And, just like at LaMettry’s, the Missouri shop utilizes new technology to aid many such processes.
“Right now, we provide iPhones to our people, and we have tablets, and we’re using them frequently,” Amberson says. “And I suspect there’s going to be more and more … that new technology that will help streamline.”
Ultimately, though, the most important element of an SOP remains as true now as it did 20 years ago: the instructional documents need to clearly define shop operators’ vision for how collision repair elements are to be performed.
“If you just do exactly what that procedure says, everything should go smooth,” Buck says. “If my office employee just follows her list, everything should go smooth. And, if my paint guy does everything on the list, it should go smooth.
“We put these procedures in place so it’s easier to train the next person—so a shop owner doesn’t necessarily have to be here at the shop all the time.”
NACE Event Altered
The Automotive Service Association (ASA) began in the 1950s, and since that time has witnessed numerous changes to the collision repair industry. Within, the last year, ASA’s second-largest affiliate, ASA-Midwest, disaffiliated with the organization and president and executive director Dan Risley resigned.
The association has worked on providing business management and technical training for shops. Yet, ASA has encountered some shifts in the industry’s landscape. In 2009, NACE split with the SEMA Show and attendance numbers have struggled since.
NACE launched in the 1990s, when the industry's technical challenges revolved around matters like the introduction of the first emissions control systems, and electronic ignitions, notes Tony Molla, the ASA’s vice president. By 2013, NACE hit an attendance low, with fewer than 5,000 attendees. In 2017, a partnership with Messe Frankfurt brought NACE to Chicago.
In the past, NACE was held during the same time as other industry events, like the MSO Symposium, the Collision Industry Conference, and the Collision Repair Education Foundation's annual golf tournament. In Aug. 2018, the MSO Symposium was held in Atlanta in conjunction with the Technology & Telematics Forum and other industry meetings at the NACE Automechanika Show.
While the annual MSO Symposium—one of NACE's flagship events, a one-day event specifically for multi-shop operations—and associated collision repair industry events will still be held while co-located with each other in 2019, NACE will now be held every two years for the foreseeable future.
Aluminum Repair Emerges
In March 2015, aluminum F-150s rolled off the assembly line in Kansas City, as Ford began to reap the rewards of the $1.1 billion in new technology it invested toward the facility, in an effort to build the pickups.
That year, the F-150, typically the best-selling pickup in truck in the U.S., became the first mass-produced light-duty pickup with an aluminum body and steel frame.
As a result of the trend toward aluminum bodies, many collision repair facilities in North America invested roughly six figures toward becoming OEM aluminum certified. Bob Tomes, the president of Bob Tomes Ford in McKinney, Texas, for example, says his facility invested $125,000 for equipment like mig welders that can facilitate aluminum repair.
Four years later, recent findings noted that many shops are starting to see a return on their investment in aluminum certification. What’s more, according to the Who Pays for What? Survey overseen by Collision Advice and the Crash Network for fourth quarter 2018, just 23 percent of shops expressed negative feelings about their aluminum training investment, down from 29 percent in 2016.
20 Groups Gain Steam
Think of it as seeking strength in numbers.
In recent years, many shop operators have found it helpful to gain peer feedback in the form of 20 Groups. Whether the groups are set up by paint vendors, or simply by enthusiastic independent shop owners, they can help facility owners solve issues like parts pricing (since the the groups can bargain for group pricing with vendors).
However, a majority of shop operators aren’t part of such peer networking groups; according to the 2018 FenderBender Industry Survey, only 33.5 percent of respondents claimed to be part of a 20 Group.
Darrell Amberson, the president of operations for Minnesota MSO LaMettry’s Collision, says participating in a 20 Group is among the best ways to learn from industry colleagues’ processes.
With 20 Groups, Amberson notes, “there’s more of an intimate setting, and, by the very nature and structure of them, they’re set up to keep it more confidential (than at larger industry meetings). So, you can learn a lot.”
Amberson suggests that, when collision repairers are considering joining a 20 Group, that they attend a meeting before committing to joining such a group, “because each one has its own makeup, and personality, based upon the participants and whoever’s hosting it.”
Increase in PBAs
It’s a trend that has been especially apparent with MSOs of late: the performance-based agreement.
The contracts with insurers are utilized at many shops in networks like CARSTAR and, while they’re somewhat similar to direct-repair program setups, PBAs are hardly carbon copies. Through a PBA, specific KPI goals are set by the insurer and are spelled out in the agreement, with the most common being cycle time and CSI.
With PBAs, body shops are responsible for meeting KPI goals, or else risk being subject to penalties stipulated in the wording of such a contract.
But the PBA agreements have their merits for shops like MSOs, according to one industry executive. Arlo Johnson, CARSTAR’s vice president of insurance relations, told FenderBender in 2017 that he envisions many insurers trending toward this type of agreement.
Likewise, some shop operators say they’ve noticed insurers have become stricter about enforcing performance standards of late, and feel the trend is somewhat inevitable for shops participating in insurer programs.
However, there are ways for shops to thrive within a PBA model.
“A PBA can offer a sense of protrection,” Johnson told FenderBender in 2017. “With this type of agreement, you are a true partner to the carrier in a sense that underperformance is measured and addressed.”
To thrive within a PBA setup, Johnson says, the goals of the contract simply need to be clarified to an entire shop staff.
Waterborne Big in Paint Departments
These days, there are less fumes permeating the mixing room in many paint departments. That’s due to the fact that many collision repair centers have started using waterborne paint instead of the old standby, solvent-based.
That was the change experienced nearly a decade ago, in the body shop at New Port Lincoln Mercury in New Port Richey, Fla. Waterborne paint is widely considered to be economically friendly, and healthier for painters to be around, than solvent-based paint.
And that was certainly a benefit experienced by Jeff Stantz, the body shop manager at New Port Lincoln Mercury, who spoke with FenderBender for a story nearly a decade ago.
“I never realized how much was exhausted into the air until I stood there in the parking lot,” Stantz told the magazine.
As a result, Stantz saw to it that his shop fully converted to using waterborne paint. And the results were significant and swift. The facility’s paint costs promptly decreased by 5 percent, and waste disposal was slashed in half.
Converting to waterborne paint requires an investment in multiple elements ― perhaps replacing paint guns, and handheld blowers, for example. Yet, it was an investment that paid dividends, Stantz told FenderBender.
“I want everyone to see [what we’re doing] and start spraying water,” Stantz says. “If one starts following us, then that’s just better air quality that we’re contributing to.”
Social Media Changes Marketing
Twenty, or even 15, years ago, marketing a collision repair business was far different than it is today. A certain amount of annual revenue simply had to be earmarked for newspaper, radio, or television advertising.
In 2019, though, a shop owner can market their business for virtual pennies, via social media outlets like Twitter or Instagram. And, even a Facebook post can be “boosted” and fired out to a fairly wide audience for as little as $5.
Consider: by the middle of this decade, Facebook had already surpassed 1 billion users, with Twitter more than halfway to that mark.
In a past FenderBender piece, columnist Kevin Rains wrote “Keep in mind that almost everyone that comes to your shop is very active daily on one or more of those [social media] channels. … Why would anyone spend hundreds of thousands of dollars on TV ads when there’s a huge, engaged audience accessible for free?”
Of course, the fact that social media can be accessed so easily in this age means that, if a customer has a poor experience at your body shop, they can quickly let hundreds of their friends and followers know all about it.
Thus, social media is a double-edged sword, which means that shop staffs must, now and in
the years ahead, take steps such as monitoring social media, while also making sure to post relevant and timely content—perhaps making a post that reads “It’s snowing, so be careful out there; this would be a great time to check your tire pressure since most accidents happen due to lost traction,” Rains says.
Parts Procurement Picks up
Over the last decade, the parts ordering process at body shops has experienced a facelift, of sorts. Fax machines, phones, and even emails are utilized less and less, as repairers have turned to using electronic procurement methods to improve the accuracy and efficiency of their parts deliveries.
Yet, while the electronic parts procurement systems have created their share of improvements in body shops—largely by creating increased efficiency—they have also created some challenges for repairers to overcome. For instance, PartsTrader, the New Zealand-based electronic system, came under fire earlier this decade due to its mandated use of the State Farm Select Service direct repair program. Essentially, many collision repairers felt the PartsTrader system was forced upon them.
For the most part, though, the wide range of procurement tools currently available—be they PartsTrader, OEConnection, OPSTRAX, or others—have saved collision repairs keystrokes.
And that, in turn, has saved them valuable time.
So, while the influx of procurement systems hasn’t been without controversy, it nevertheless offers promise to the industry.
“If we’re looking at how we fix parts procurement, it’s not going to happen tomorrow,” Darren Huggins, now the national collision director at Berkshire Hathaway Automotive, told FenderBender in 2015. “But the answer isn’t [whining] about what we have. We need to try what’s there, we need to give feedback, we need to be a part of it. The answer is for this to be repairer-driven.”
Leading with Lean Processes
These days, when Mike Anderson flies from city to city giving leadership advice and collision repair lessons, the term “lean processes” doesn’t come up as often as it used to.
Yet, Anderson, the owner of CollisionAdvice.com, still sees some value in body shops seeking to identify and eliminate wasteful processes.
“Lean was really in its heyday about 10 years ago,” Anderson says. “That was kind of the hot topic of the day.
“But I definitely think that shops that embraced it saw some efficiency gains, in regard to production and cycle time, etcetera. … It was good for the industry. I still think it’s good for the industry. And I think that, sometimes, we can get complacent and we need to go back to our organizations and do kind of like at home—do a little spring cleaning every year.”
Even though lean processes have been used in countless collision repair shops in recent years, Anderson says that lean terminology remains fairly broad. In his discussions with collision repairers, Anderson notices lots of misinterpretations of lean principles like 5S (methods such as “sort,” “shine,” “standardize,” and “sustain”) or Six Sigma (a method that relies on a team effort to systematically remove a shop’s wastefulness).
One thing remains clear and indisputable: utilizing lean processes usually helps shops shore up inefficiencies. For the most part, that’s as true today as it was 10 years ago.
“Obviously, we’ve still got to continue to be profitable,” Anderson notes, “and we still need to find ways to do things smarter, not harder.”
Anderson recently spoke with FenderBender about all things relating to lean. Here’s what he had to say.
WHY DO YOU FEEL LEAN PROCESSES HAVE BECOME SO WIDELY USED?
Anderson: I think a lot of paint companies embraced that, and they were doing it a lot in a lot of their teachings. … I think today, if we’re going to study and apply lean principles, it’s probably more in the administrative process than ever before, just because I think there’s so much more expected of estimators and customer service reps than ever before. I think it’s time to take a lot of those principles and apply them to our administrative policies.
WHAT ARE THE BEST WAYS THAT SHOP OPERATORS CAN LEARN ABOUT LEAN PROCESSES?
Anderson: Number one, most major paint manufacturers offer some type of training, coaching, or consulting on that. … And then there’s outside, third-party companies that have nothing to do with our industry at all, but they can still come in and help you with processes. But I think you’re better off if you can find somebody that’s in the industry, and understands the nuances. And, in my opinion, I think the refinish manufacturers are probably the ones that have done that best. There’s a lot of different vendors and sources out there for you to find, and it just depends on what part of your shop or organization you want to become more efficient.
HOW MUCH CAN SHOP FLOOR LAYOUT IMPACT THE EFFECTIVENESS OF LEAN PROCESSES?
Anderson: Shop layout is critical. Let’s say that a shop is doing $250,000 a month in sales, and they had five auto body technicians. Each technician is generating $50,000 a month in gross sales revenue. The shop was generating $20,000 in gross profit per technician. And, let’s just say that a technician works 200 hours a month, 50 hours a week. That technician’s making $100 an hour gross profit for me. So, the more efficient I can make them, the more money it’s going to generate me in gross profit. So, strategically locating where my equipment is at … you can definitely see a huge efficiency if you really have a good layout and design.
IF A SHOP STARTS IMPLEMENTING LEAN PROCESSES, HOW QUICKLY WILL IT TYPICALLY SEE KPIs IMPROVE?
Anderson: I think you can see improvements within 30 days. You can see improvements quite quickly. But, if your performance [was] really poor, then you’re probably going to see a huge gain. It’s kind of like losing weight, right? When you first go on a diet, you’re going to lose a lot of weight, but then that last 10 pounds, you only lose a pound a week. So, initially you’re going to see some huge gains, after that it kind of slows down. You still make improvements, it just doesn’t come as quickly.
IN THE FUTURE, WILL LEAN PRINCIPLES CONTINUE TO IMPACT THE INDUSTRY?
Anderson: Everything’s kind of a flavor of the month, right? And I think that lean was really, really important to people when they were trying to figure out how to improve performance to be more profitable and increase their sales. I think today, the focus for people more is How do I reduce liability, so I don’t get sued if I don’t fix a car properly through scanning or researching our repair procedures? So, I think that the focus has kind of changed for people.
OEM Procedures Emphasized
In recent years, the strict adherence to OEM repair procedures has become a point of emphasis at many body shops. And that’s a trend that shows no signs of slowing, throughout the collision repair industry.
Jeff Peevy, the new chair of the Collision Industry Conference, feels following automakers’ suggested repair procedures is as important as ever. And OEMs are making their procedural information readily available to repairers; according to the 2018 FenderBender KPI survey, 87.7 percent of respondents said their business had access to OEM repair information.
“One of the most significant things that’s come up in the last 20 years has been liability—that liability to exposure” for shop owners, says Peevy, who also serves as the president of the Automotive Management Institute (AMi). “The truth of the matter is that, small-business liability exposure gets greater every year, as the vehicle gets more complicated.
“It’s going to take us a while to get our heads around it as an industry, but we’re going to need to—we’re going to need to do it quickly.”
Photo Estimating Implemented
Insurers have come to embrace photo estimates in recent years.
However, photo estimates have caused concern from some collision repairers, because the shop operators don’t want to gain efficiency at the expense of the occasional costly oversight with regard to a damaged vehicle. The issue was broached at a 2017 CIC meeting in Pittsburgh, for instance, due to Pennsylvania’s Act 13 of 2016, which stipulated that appraisers may use photographs, videos or telephonic means to prepare an estimate. One collision repairer in attendance at the Pittsburgh CIC gathering lamented how photo estimates can, in theory, cause customers to miss out on a chance to be educated by repairers about the ongoing issues with their vehicle.
Insurance companies have also thrown a wrench into the issue by asking drivers to take photos for estimates, using mobile app features like Allstate’s QuickFoto Claim.
“The customer does not know what the insurer is inspecting,” Cam Mashburn, owner of Mashburn’s Collision Center, told FenderBender in late 2017. “So, our plan is to tell the customer that, and say ‘Let us take the picture. We’ve got the app on our phones.’”
At this stage, though, photo estimating seems to have gained a firm foothold in the industry.
Scanning Sweeps the Industry
Diagnosing and calibrating electronic systems in vehicles has become more and more important as vehicle technology has evolved in recent years. And, in that respect, diagnostic scanning equipment has offered collision repairers a massive assist.
In 2019, many industry experts recommend the pre- and post-repair scanning of vehicles for most repairs. What’s more, multiple OEMs demand such scanning procedures.
That’s not to say that scanning doesn’t still, to this day, present some challenges for shop operators. Consider these recent statements from Ed Griffin, the owner of Griffin’s Paint & Body, in Winnsboro, Texas:
“We’re facing a lot of opposition with insurance companies still on scanning,” Griffin says. “That’s the first thing that we need to perform in a collision repair, is a pre-scan. And we very, very seldom—almost NEVER—see it on the initial estimate, at least to the degree it needs to be.”
However, collision repairers like Darrell Amberson, the president of operations at LaMettry’s Collision in the Twin Cities, have hope that scanning reimbursement will eventually become a regular practice, noting that, historically, the collision repair industry eventually adjusts and establishes norms for new processes and compensation.
DRP Debate Rages
While some collision repair shops are moving away from direct repair partnerships (DRPs) with insurers, many shop operators say they find the business pacts beneficial. In a 2015 FenderBender article, for example, Linda Barron, the co-owner of Ace Body Shop in El Paso, Texas, explained how she has forged successful DRP relationships.
Barron noted that, if you can get to the point that insurance companies trust your shop’s estimates, then it can aid your efficiency. Barron also said DRP relationships tend to work smoothly, as long as shops keep cycle time in line with the parameters insurance companies prefer.
“The way we improve cycle time is we get all the damage up front ― there’s no hidden damage in our estimates,” Barron told FenderBender in 2015.
On the other end of the spectrum, in that same year the magazine spoke with a director of operations at a non-DRP shop. Vanessa Govenor decided a few years ago that her employer, Sudden Impact Auto Body & Collision Repair Specialists in Las Vegas, would go non-DRP.
Govenor said she feels transition to a non-DRP setup has led to increased business, new advertising opportunities, and a less stressful shop culture.
“Without those [DRP] contracts, we don’t have that stress over our heads,” Govenor said. “We have all the necessary documentation to provide to these insurance companies with every material and procedure we need.”
OEM vs. Aftermarket Examinined
The debate rages on: those in the collision repair industry have taken up sides when it comes to manufactured original parts versus aftermarket parts.
Many collision repairers feel that OEM parts provide the necessary safety and quality that customers deserve. Conversely, organizations like the Automotive Body Parts Association feel aftermarket parts have their merits considering the reduced cost of repair that they help provide for customers.
The OEM vs. aftermarket debate was placed in the spotlight in early 2018, when Rhode Island Senate Bill 2679 (SB 2679) was introduced by three state senators. The bill sought to expand restrictions currently in place on non-OEM collision repair body parts in first-party claims to any collision damaged parts. Later that spring, the Rhode Island Senate Judiciary Committee voted for an amended OEM parts bill, extending the customer-consent requirement from 30 months to the first 48 months of vehicle life.
While sides have clearly been drawn, the OEM vs. aftermarket conversation figures to continue for the foreseeable future. After all, the industry has yet to reach a consensus.
“Price is obviously a driver for many insurance companies, and, to be honest, even repairers’ margins are often better on aftermarket parts,” Aaron Schulenburg, executive director for the Society of Collision Repair Specialists, told FenderBender in 2018.
“But there are ever-present liability considerations in parts selection and what we still find is that most shops would prefer to use OEM parts due to fit, availability, confidence in the part and limiting their own liability.”
The rate with which consolidation has gripped the collision repair industry recently is nothing short of stunning.
Consider this: On Oct. 26, 2018, when California MSO Cooks Collision’s assets were officially sold to Abra Auto Body & Glass, it was hailed by many as the MSO acquisition of the year. The acquisition left ABRA with 396 U.S. locations.
Barely one month later, ABRA had essentially merged with fellow consolidator Caliber Collision, when the companies announced a definitive merger agreement. That news meant that two major companies had joined forces and left the Caliber brand with more than 1,000 stores.
The merger agreement left the new Caliber brand with roughly one-tenth of the collision repair market. Now, consolidators Caliber, Gerber (with brands in 26 U.S. states), and Service King (24 states) control a sizeable chunk of the collision repair industry.
Because of that fact, it’s natural to wonder if the days of the independent body shop—or even the small MSO—are numbered. Nobody knows that answer for certain.
“No one likes changes, but unfortunately the world changes,” says Rick Wood, a recent co-owner of Cooks Collision. For collision repair employees, consolidation “is actually not a bad thing—it’s a good thing. The opportunities are there. ABRA is going to be able to provide opportunities to people that have been loyal to us, so that they’ll be able to expand their careers.”
Tech Shortage Takes Root
Brandon Eckenrode, the director of development with the Collision Repair Education Foundation, has noticed an unsettling trend at the career fairs he attends across the country: his industry tends to offer lower starting pay than other technical trades.
While aircraft technicians have a starting hourly wage of $17.32, for example, automotive body techs earn just $12.24 per hour as a starting wage, according to 2017 findings from the Bureau of Labor Statistics.
That causes a lot of young collision repair technicians to leave the industry before their career has even begun in earnest. That has helped contribute to the cold, sobering reality that the collision repair industry needs 1.2 million technicians in the next 10 years to meet demand, according to research by TechForce Foundation.
“What’s different with this generation,” Eckenrode notes, “is that a lot of them have the mindset of ‘When I get out of college, I believe I’m going to make $100,000—and, it won’t be long after that that I’ll be running a shop.”
So, Eckenrode says, it’s important for shop owners to set and explain expectations to entry-level technicians, and to help them envision a path to eventually climbing the shop hierarchy.
“What happens in a lot of instances,” Eckenrode notes, “is a student graduates, they go to a shop, and they can’t do some basic stuff. So, they’re pushed into a corner with a broom to clean up, they get frustrated, they end up quitting, they don’t go back to the industry. And that’s not helping anybody.”
In the case of ADAS, much like a computer, it’s only as good as the information it’s receiving, says Ray Fisher, executive director for the Automotive Service Association.
As a result, when a camera, radar or other system is providing false or no information in the system, lives are put at risk.
According to new research from AAA, vehicles with ADAS (advanced driver-assistance systems), such as automatic emergency braking, blind spot monitoring, lane departure warning and others, can cost twice as much to repair following a collision due to expensive sensors and their calibration requirements.
Previous AAA testing has shown that ADAS offers many safety benefits, like forward collision warning, blind spot detection, and park assist. Some features take control of a vehicle while others provide warning. However, minor vehicle damage that affects these systems may be inevitable. For the vehicles in AAA’s study, the repair bill for a minor front or rear collision on a car with ADAS can run as high as $5,300—more than double the repair cost for a vehicle without those systems.
One of the most prevalent accident avoidance technologies in the vehicle fleet so far is electronic stability control (ESC), according to the CCC 2018 Crash Course Report.
ESC was mandated for inclusion in all vehicles by NHTSA for all passenger vehicles manufactured after Sept. 1, 2011. As vehicles are equipped with more technology to avoid crashes, there are fewer collision parts sales, and even slower fleet turnover and subsequent vehicle sales. Given the nature of ADAS to avoid or at least mitigate a crash, it’s likely the damage sustained by vehicles equipped with ADAS versus those without ADAS will be different, according to the report.
“I believe that when we look at ADAS and calibration, that this is an important part of our future industry,” Fisher says.
With the introduction of ADAS in the late 1990s, repairers were suddenly introduced to radar based adaptive cruise control and laser assisted ACC from Japanese car companies, notes Kye Yeung, president of European Motor Car Works in Costa Mesa, Calif. In those days, most repairers and consumers relied on the dash lights as an indicator that a system fault was present. Now, 20 years later, OEMs publish position statements demanding the pre-scan of a vehicle before any repair should be started and a post scan after the repair has been completed.
According to Yeung, the effect came occurred slowly, with ADAS only available in higher priced-vehicles.
“The majority of the industry was unaware that ADAS would soon be standard equipment in most vehicles,” Yeung says.
Back in the ‘90s, Japanese cars introduced a distance detection system. Manufacturers like Mercedes and Jaguar introduced radar assisted systems in their luxury brands, Yeung adds. The early 2000s saw BMW and Lexus come out with ACC, and other manufacturers soon followed suit while also
quickly integrating their own specific enhancements like “brake control.”
With updated generations along the way, the industry now has semi-autonomous cruise control.
Today, advanced driver-assistance systems include adaptive front lights (AFL), blind-spot monitoring (BMS), driver monitoring systems (DMS), forward collision warning, lane departure warning (LDW), autonomous emergency braking (AEB) and more.
And the new technology is certainly impacting the industry. Consider: research from the Insurance Institute for Highway Safety (IIHS) early last year found that a misaligned Honda Civic camera led to issues with the vehicle’s lane-departure warning and auto braking systems.
Sean O’Malley, senior test coordinator for IIHS, has worked on windshield-mounted advanced driver-assistance systems research for nearly three years. His research focuses on dealerships and their calibration work and how the work performs in a crash-test.
Recently, O’Malley was driving a 2016 Honda Civic used in his IIHS crash tests and noticed the lane-departure warning go off when he appeared to be in the center of the lane.
While O’Malley only found the Honda Civic camera to be misaligned by 0.4 degrees on the left and by 0.6 degrees on the right, he said misalignments in ADAS technology mean the industry needs a closer look at calibrations.
In the future, Yeung says he envisions ADAS affecting the industry by causing the average repair cost to spike. Cycle time to repair will increase, there may be a lower accident rate, there will be a shortage of technicians in the field, and vehicles will be more difficult to repair.
In order to best prepare for ADAS in the shop, Yeung recommends shop operators reach out to industry associations like SCRS and I-CAR to help navigate training processes. There will also most likely be a need for new standard operating procedures for technicians to repair properly.
There will likely be challenges associated with working with ADAS in the shop. One challenge will be fair compensation for time to complete ADAS scans.
Yeung says that since each vehicle manufacturer employs different methods and tools, performing safe repairs and staying abreast of the changing technology and liability climate will be the biggest challenge.
“My challenge is to the digital inspection software providers to incorporate VIN decoding that would populate the necessary visual inspection for those vehicles equipped with this new technology,” Fisher says. “An example: Honda side-view mirrors with cameras for lane assist—upon visual inspection, does the mirror show physical damage that may result in improper feedback to the system, causing false signals?”
Evolving Management Systems
These days, Phil Oyer’s workdays are far less chaotic than in the past.
And, the owner of Aurora (Colo.) Collision Center Inc. says he has his shop management systems to thank for that.
Shop management systems “really help. To do things without a management system is crazy; it just helps you in so many ways,” Oyer says. “They really help from an efficiency standpoint in the office, and in the shop—with parts ordering, and to track them, and it updates pricing for us.”
Yes, these days the 63-year-old shop owner has a business that runs rather efficiently, thanks in part to its utilization of a shop management system that can be accessed through a smartphone app (Oyer’s shop uses two management systems, all told). Modern management systems, after all, drive efficiency and accuracy with regard to the documentation of shop data.
And, the management software can often help drive best practices.
The management software utilized at Oyer’s shop allows for estimates to be written quickly, for photos to be added rather easily, and for customers to get frequent updates on the status of their vehicle.
The Colorado shop owner also loves what he feels is an often overlooked element of shop management systems: their scheduling function, which allows his staff to coordinate repair work.
“It’s basically a fancy calendar that you can tie to a job,” Oyer notes. “It helps me with scheduling … estimates where people come to have us take a first look at their car. It helps coordinate subleted stuff, like glass [work], and set reminders.
“You could use it for so many different things. That’s something that has been very beneficial to us.”
As a result of such shop management functions, Aurora Collision Center has seen its cycle time reduced by two days—down to eight—recently. And, the shop’s annual revenue is currently around $1.3 million per year.
In Oyer’s experience, even in this age of advanced technology, not enough shop owners are taking full advantage of their shop management system. After all, he notes, many shop operators are former shop floor employees who can find working with computers somewhat intimidating. Plus, he notes, many shop operators “just don’t have the time, usually, to analyze [management software] real deep. You know, you get busy.”
Fortunately, Oyer adds, mastering a shop management system requires just a few steps, in reality. Such steps include the following:
Attend industry events. Industry gatherings such as the SEMA Show in Las Vegas, or any collision repair conference, can offer invaluable insight on the ins and outs of management systems, Oyer says. After all, those types of networking events can allow a shop operator to tap into the expertise of industry colleagues. Oyer suggests taking shop employees to such events too, if your business’ budget allows for it.
Assign employees to the task. In Oyer’s opinion, the process of learning a management system becomes easier if specific staff members dedicate themselves to mastering the software’s intricacies. Then, those employees can tutor their peers gradually, over time, in rather painless fashion.
Send Employees to Training. Industry insiders like Mike Anderson, the owner of CollisionAdvice.com, are in agreement with Oyer: it’s important to send members of your shop staff to vendor training. Then, they can typically relay their findings to employees once they’ve returned home. Anderson and Oyer concur: it’s an investment that’s destined to pay dividends.
Schedule vendor visits. In recent years, the staff at Aurora Collision Center has kept a running list of questions on file about its management software. Then, periodically, Oyer has asked vendors to pay the shop a visit to offer tutorials, to troubleshoot any issues the staff has recently encountered, and to point out features of management software that his staff might be overlooking. On occasion, a vendor may also be able to observe a shop’s processes and then point out an area of their management software that they could be utilizing to aid in such work.
“Having a vendor come into the shop does help,” Oyer explains, “because it gets you to focus more on” the management software.
Oyer has little interest in revisiting his shop’s chaotic past. And, he feels like, as long as his shop has its management systems up and running, he won’t have to.
After all, the shop owner keeps witnessing gradual upgrades in shop management software, which offer new features and ways of tracking shop data and receiving reports.
“We keep seeing new changes, and updated versions,”Oyer says of management software. “Reports have improved over the years—reports that we want to look at to review at the end of the week or the end of the month.”
A quality, modern shop management system is invaluable, in Oyer’s opinion, and figures to impact body shops for years to come. Because the software takes much of the guesswork out of collision repair tasks, such as the status of parts deliveries.
“I can’t imagine trying to run a shop without a shop management system,” Oyer says. “It’s a must.”
Gary Wano, Jr.’s facility had just doubled in size.
As a result, the shop owner needed to see a prompt increase in revenue.
Back in 2005, Wano, Jr., the owner of G.W. & Sons Auto Body in Oklahoma City, invested in a massive addition to his shop. So, seeking to recoup the cost of expansion, the shop operator decided to join Mercedes-Benz’s certification program.
Soon after, cars from out of town—and even out of state—began flocking to G.W. & Sons for high-end repair work.
“Early on, it was really, really beneficial to be a part of it,” Wano, Jr. recalls of the OEM certification program. “And it’s still beneficial.”
For one thing, Wano, Jr. says it “helps, from the market standpoint, that that car is not going to be repaired anywhere else except for a facility that has the training, and the equipment, to do so.
“That [certification] put us in a really elite group of repairers.”
Now, in 2019, Wano, Jr. oversees a shop that boasts a CSI score of 94 and an annual revenue of $4.5 million. He recently spoke with FenderBender and explained what shop operators should consider as they ponder future investments in OEM certifications.
As Told to Kelly Beaton
A certification, it’s not just a plaque on the wall. What it amounts to today is an indication that you’ve taken those extra steps—that you’ve equipped yourself to be able to properly repair the vehicle, and you’ve also taken the steps from a training standpoint, with some hands-on training.
There was a time where I think that a certification amounted to a decoration on the wall. You know, I’ve got this certification just to say that I’ve done something a little more than anyone else did. But, anymore, I think we’re going to get this to be a common practice.
It’s important to do your research before investing in certifications. It doesn’t hurt to get an idea of the fleet count within your market. Number one, make sure that the market will sustain the investment. Be sure that you can build a relationship with the dealership for that particular automaker. And then do the math; what’s it going to take? Is the investment from the equipment standpoint going to justify the ends to the means? If you’re repairing 20 cars of a given automaker’s brand, and then you find out, to be certified, that you’re going to need to make a very massive investment—that can run from tens of thousands of dollars to upward of $200,000? That’s something to be considered.
The good thing is, some of your equipment will cross over, which can reduce a certification investment. So, whereas you might end up investing, say, $150,000 into one of these programs, you might find out the crossover on the equipment in the first program is fairly significant, and you may only need to add a few thousand, or a few tens of thousands of dollars, to that equipment base to achieve the facility requirements of a second OEM certification.
A high-end vehicle certification is a costly endeavor. The average repair facility, without going into a little bit of debt, I don’t think a collision repair facility today is going to do it on what their business is able to derive in earnings. These days, you’re going to have to be willing to step up and make an investment that probably will require you to go run to a lender.
It’s a strong statement when you say you’re certified by an automaker. Looking at the mid to top-range Honda Accord, you’re looking at a price of $35,000 or $40,000 dollars, and a Nissan is probably somewhere in the same area; These cars are major investments in the consumers’ eyes. And I think, based on that level of desire to keep that investment in good shape, the consumer might be more apt to try to find somebody who’s familiar with this product line when it comes to auto repair.
For marketing purposes, it doesn’t hurt to mention your certifications on your Facebook page, or your website. Though, with most of the OEM certification programs, the badge you represent is being promoted by the automaker themselves. From our standpoint, if a Mercedes-Benz owner is involved in an accident, and they reach out via telematics, Mercedes-Benz is first going to ask them if they’re okay, and then, in the event that they need a tow-truck, they will also offer the name of the certified collision repair facility that’s closest to them.
Eventually, we’ll probably see a lot more repair facilities become more specialized. There could get to a point that the average body technician, to be able to perform the repair processes to every automaker on the road today, it would be information overload. I don’t know that any one individual—or even a dozen—would have the mental capacity to hold that much knowledge. We’ll have repairers that will be more specialized in specific brands, most likely.
A Focus on KPIs
A decade ago, Mark Probst’s body shop was rolling along decently. Yet, the shop owner wasn’t certain how to steer clear of the occasional poor month, financially.
“I didn’t know where my strengths or weaknesses were, nor did I know how to make improvements,” recalls Probst, the owner of Probst Auto Body, in Dieterich, Ill.
Before 2009 was done, however, Probst began receiving consultation from a training group. As a result, he soon began tracking multiple avenues of numbers, and tracking several key performance indicators (KPIs).
Then, his business truly hit a higher gear.
And, the veteran shop owner is confident that, by closely monitoring his shop’s performance statistics, Probst Auto Body will thrive for years to come.
Yes, Mark Probst is a believer in monitoring KPIs. But, like a lot of shop operators, it took him a while to realize the full value of staying on top of a business’ statistics.
In 2009, Probst began working with collision repair training group Management Success (now known as Drive). He and employees received weekly tutorials from Management Success consultants for courses regarding topics such as advanced marketing, advanced financial, communications, and estimating.
The staff at Probst Auto Body still takes those courses periodically, to this day.
After receiving some initial guidance from Management Success, Probst began to understand where his shop was missing the mark back in 2009.
Before long, that consultation led the Illinois shop owner to begin using his shop management system to closely track a slew of shop statistics, such as: gross profit on parts, sales efficiency, average labor hours per RO, and cycle time. He began monitoring most shop metrics on a daily basis, often studying graphs that his ProfitNet management system produced.
Soon, Probst Auto Body’s staff began to maximize its potential. For instance, the shop’s back-end estimator began utilizing a large dry-erase board to update the facility’s billed hours on a daily basis.
Now, Probst says, “every team member has a part in billed hours, and their paycheck is the direct result of billed hours.”
When Probst began tracking KPIs a decade ago, his facility was averaging approximately $37,000 per month in sales. In 2019, that number has risen to $125,000 per month.
Overall, the training opened the shop owner’s eyes to some KPIs that are often overlooked around the industry, too. Such as:
Number of estimates written: Probst feels far too many shops overlook this valuable statistic. He feels that, by keeping tabs on the number of estimates your staff writes, it can clearly illustrate how valuable marketing campaigns have been.
“Let’s say you put up a billboard and two to four weeks later you start seeing an increase in the number of estimates written,” Probst says. “This stat is directly related to your marketing efforts and can be a great gauge on what’s working and what’s not working. … How many estimates are coming in the door, and is that number increasing or decreasing?”
Value of estimates not sold: It might sound good, initially, if a shop closes on 70 percent of its weekly estimates. But Probst says it’s important to closely study the other 30 percent of weekly estimates in an effort to learn what that truly represents in lost business.
“Depending on your shop size, that 30 percent not sold could equal anywhere from $5,000 to $50,000,” Probst notes. “What if you can grab one or two more jobs from ‘estimates not sold’?”
By receiving shop training, Probst was taught the ‘why’ part of his business—in other words, why his shop was enduring a few inefficiencies.
These days, Probst is a confident, accomplished shop owner, who oversees a shop with a $1.5 million annual revenue and a 97.7 percent CSI score.
His seven employees are working as efficiently as ever.
Probst Auto Body’s solid current status is largely due to the fact that no KPI—be it gross profit on labor, sales efficiency, or cycle time—goes unmonitored. The shop owner says that, over time, monitoring KPIs on a daily and weekly basis has simply become “habit.”
In Probst’s opinion, KPIs are now imperative to track, because insurers are observing them more closely than ever.
“As insurance companies study and analyze these KPIs, they’re making decisions as to where work might be going,” Probst says, “especially in the case of DRP agreements.”
By closely studying such KPIs, Probst is left with a sense of confidence that his shop will thrive for years to come.
Probst is also quite sure of something else: KPI tracking will be a staple at all body shops for years to come.
“I believe shops that track KPIs, and work on plans to improve their KPIs, will thrive in the future,” Probst said. “Shops that don’t track KPIs will have a hard time keeping up in the industry.
“Like in a lot of industries, margins are getting tighter, and if you’re not careful, [tracking KPIs] could be the difference between being in business or not being in business.”