Top-to-bottom shop redesign based on new-wave business principles has tightened work efficiency, laid the foundation for continuous improvement and molded the staff into an empowered, change-oriented team at Eugene, Oregon’s Old Dominion CARSTAR.
All this without sacrificing Old Dominion’s 33-year tradition of elite quality and customer service — both symbolized in the rose that’s still either given directly to the customer at pick-up time or placed on the vehicle’s passenger’s seat.
“Our motto is that we’re in the business of taking care of people, and through our process, the vehicle gets repaired impeccably,” says Patty McConnell, Old Dominion’s president and majority owner, who first started the rose giveaways 17 years ago.
“This whole changeover has been a process, and at times it’s been very challenging for us. At the same time, I’d say it’s been a true highlight of my career. We’re actually a team here now, and we’ve gotten to a point where everything’s kind of a part of an integrated, more predictable system that can also change when it needs to. Actually, even the rose has become a part of that system now.”
“Predictability” was definitely the watchword for Vice President of Operations Dustin Caldwell, McConnell’s son, who spearheaded the makeover last June after 11 years in the shop’s trenches handling everything from detailing and parts to sales and production management.
But predictability was a crap shoot under the old system, in which technicians worked on each vehicle by themselves in separate repair stalls from start to finish — stopping, starting and getting help from others in a costly, continuously helter-skelter fashion. Caldwell describes the old system as “organized chaos” and “a spaghetti mess.”
“My father [who founded Old Dominion] took a lot of pride in craftsmanship. He always said, ‘No shortcuts,’ and that has always been a part of what we do — we set the bar very high here,” Caldwell notes.
“But I kept looking at the way we were doing things and thinking to myself, ‘There’s got to be a better way.’ It seemed like we were always trying to fix immediate problems but never getting on top of them. There just seemed to be so much wasted time and effort.”
And that, says Caldwell, was a recipe for failure in an era of HMO-style direct repair programs, manic cost- and time-consciousness, and escalating competition.
So when Old Dominion changed its paint vendor to PPG Automotive Refinish and heard about PPG’s Throughput Performance Solutions (TPS) program, which provides management training on cutting costs, boosting repair speed and improving quality, Caldwell jumped at the chance.
As Caldwell learned, TPS is derived from several modern business theories — including Lean Principles, Six Sigma and the Theory of Constraints – that emphasize a continuous production-line work system, cutting waste and eliminating variations in the work process.
When all of its elements are taken together, the TPS vision aims to actualize the Japanese management term, “ParaKaizen,” which means “a culture of continuous improvement.”
Some 100 shops have participated in TPS in varying degrees to date, says Rich Altieri, PPG Automotive Refinish’s senior manager for business solutions, and “well beyond 90 percent” have documented performance improvements, especially after follow-up with TPS consultants. Similar programs are also offered elsewhere, although they are rarely as comprehensive as TPS, Altieri says.
“The truth is, the best way to do it is to get someone who really understands the process and can walk you through it according to what is going on with your own shop,” he adds.
“One misconception is that this kind of approach is for only the top four or five percent of the biggest shops out there. In fact, we’ve had very small shops that have really produced improvements. You just have to remember that follow-up is crucial — you have to stick with it and work things through.”
In Old Dominion’s case, fundamental change meant analyzing and refiguring the production process from beginning to end, dismantling and rebuilding the entire shop, getting each and every employee reading from the same page and starting over.
The result, one year into the new business model: a carefully integrated production-line system in which each incoming vehicle’s damage is first comprehensively evaluated, then assigned to one of three repair routes — one for vehicles with light damage, another for medium damage and a third for heavy damage — to keep the process constantly moving.
KEEPING THE LINES MOVING
Along each route, the repair sequence is always the same: evaluation, disassembly, production, paint booth, reassembly and detail — and no vehicle leaves one area until even the most minute task there is taken care of. A rolling parts cart follows each vehicle through the system, stocked only with the supplies calculated at the front end to be needed.
Another fundamental change: Each of Old Dominion’s 25 employees is now a key player in maintaining and fine tuning every step of the process. Every Wednesday, for example, managers conduct formal brainstorming lunch sessions in which technicians offer suggestions for system adjustments. Among ideas that have been put into practice: having appraisers use digital cameras to photograph vehicle damage, then emailing the photos to insurance carriers, accelerating the claim-approval process.
Technicians are also a part of documenting the new system’s efficiency through a new set of benchmark measures that are monitored on a monthly, weekly and sometimes daily basis, including “touch time,” the number of hours spent per day on each car. Old Dominion has doubled its average touch time to 3.3, compared to an industry average of 1.8. (Other key improvement areas are detailed on pages 34 and 35.)
Caldwell says of the move toward more technician involvement: “We knew we needed to sell the new model to the people who would actually be doing the work, rather then telling them, ‘It’s my way or the highway.’ “There were months of meetings and seminars, and we took some of our technicians to shops where similar systems have been put into place. The first step in something like this has to be changing the company culture: establishing that sense of urgency in each and every employee, and answering the key question in all of their minds — ‘OK, why are we doing this?’”
Unfortunately, but predictably, the new system also meant some growing pains, particularly for the first six months, when at one point, the new system’s learning curve resulted in a 20 percent drop in monthly sales.
Adding to the problem was the fact that seven of the company’s technicians refused to buy into the new way of looking at things and left the shop early on. Staff turnover alone ate up the lion’s share of the $100,000 the 14,000-square-foot Old Dominion had budgeted for the entire changeover. Initially, Caldwell expected that almost all of the money would be used for shop reconstruction and new equipment.“Looking back, we probably should have budgeted about twice what we did,” Caldwell recalls. “The expense we didn’t anticipate was employee turnover.”
Altieri emphasizes that all shops are different, so managers considering similar changes shouldn’t assume that TPS is a one-plan-fits-all proposition.
“Everything depends on your sales volume, the existing culture of the company, the mix of work that you do and many, many other things,” he says. “So, no, one shop should definitely not expect to just copy what somebody else did and expect the same results. They also should expect some big obstacles along the way that they’ll have to overcome.”
McConnell agrees, noting that Old Dominion’s initial staff exodus, for example, was devastating at the time, but turned out to be a blessing in disguise.
“We’ve now got people who are all much more team-oriented,” she notes. “And, again, I’ll repeat that we try to integrate even so-called little things like the customer’s rose as a part of the process.”
“Detailers, for example, tend to be entry-level,” McConnell explains, “and compared to other areas, they sort of tended to be at the bottom of the totem pole around here in the old system. So one thing we did was give responsibility for handling the rose part of our system to our detailers. And you can see how much that has empowered them and helped them take genuine pride in what we’re doing. Our detailers just beam when the customer gets that rose.”