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The Collision Repair Industry from an Outside Perspective

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My only previous experience with people from the collision repair industry was in high school. The shop class teacher could be heard from down the hall, screaming at students for any reason. He just seemed to be a miserable guy who took his frustrations out on his unsuspecting students. Seeing my peers run out from the room and hearing the stories from my older brothers, led me to avoid any sort of personal contact in the industry.

Years later, I am now in my fourth year of university at the University of Victoria studying Commerce, and thoughts of that terrifying man made me doubt my survival in this intern position. I have since discovered that the industry is filled with people who are quite the opposite of that teacher. Anyone I have come in contact with has a huge sense of humour, is interested in helping those around, and loves what they do.

When I first came to work for AutoHouse Technologies, I was unsure of how I was going to communicate with people in the collision repair industry through e-Marketing. I figured that people in this industry would be busy getting their hands dirty by fixing cars rather than being inside on their computer. I was pleasantly surprised to find so many people and companies connected to each other online. Through social media sites such as Twitter and Facebook, we have been able to connect with shops from all over North America. In what other way can so many people with one common interest join together without leaving their own shop?

There seems to be this strong sense of camaraderie between ‘shop guys’. Even with all the strong competition within the industry, it seems that everyone is genuinely interested in helping each other be successful. It’s a tight knit community; in just a few short weeks, I have witnessed on several occasions, people within the industry lend a favour or two for as little as a promise to meet for a drink after work one of these days. I don’t think there are many other industries out there quite like that.

I have however, found one challenge. A lot of shops and people from the industry have joined these sites, and built their profiles for the sole purpose of getting their names out there. That’s why we all do it, but it needs to go further; we need to bring the sense of community that the industry has and build from it, online. A lot of companies have joined these sites, but have not even so much as “tweeted” since joining. Contributing ideas and opinions through Twitter feeds, discussion and comment forums, direct messages, etc., are so important. Not only does it increase brand awareness for your business even more, it adds personality to your business and shows that you are interested and involved in what is happening to the industry that affects you directly. You may be involved in the area surrounding you, but you now have the opportunity to reach far beyond that.

In the next few weeks, we will be releasing our 2007-2009 Rear-View Mirror Report, which will take a look at the recent trends of the Canadian Collision Repair Industry. Now is your chance to tell us what you would like to see in this report. We’re writing this for the benefit of those in the industry, so we’d love your direct feedback. Feel free to contact us through our website or on Facebook, Twitter, or YouTube.

A Productivity Snapshot

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Lately I’ve been having more conversations with repairers about productivity because some believe they have made gigantic leaps forward in making their businesses more productive. The increased focus on the production floor, triggered by the industry’s adoption of lean methodologies, no doubt has had an influence, or has it? I decided to take a quick look into our data to see if I could spot any trends.

How do you best measure productivity? I’ve used our units per day metric, or touch time as it is also known. In this scenario, productivity measures how many hours on average are spent working on each repair, everyday it is on site (Total Hrs / number of days = Units / Day). I choose this measurement for two reasons:

1. in order to increase your units per day performance, you must also improve a lot of other shop processes that impact this productivity KPI such as estimating, parts management and scheduling, and,
2. there is an increased focus by insurers to monitor units per day performance.

As discussed in a prior article, I believe this is one of the KPI’s a shop should track for its own business. If insurance partners are also tracking the KPI, it just means that you should be able to be proactive rather than reactive with those conversations.

The data we collected includes both customer and insurance pay repairs, and is provided only to see if the trend line has moved. In future reports, we may dig deeper and get the statistical validation required to make a definitive statement. During a three year period, this is what we found:

From what we see, there is support for the assumption that productivity has improved, but what are the factors that contributed to those gains? I’ll take a stab and make some assumptions (if they are proven wrong at a future date, I guess I’ll only have myself to blame):

• Lean initiatives and renewed interest in production processes have contributed to the overall increase
• Some insurers (unfortunately, only some), are adopting a lean mentality to cut out administrative waste that slows repairs
• The top performing repairers are bootstrapping the overall average higher. I know we have some clients with averages much higher than shown, even with customer pay repairs in the average

I am interested to see what further analysis would provide. What are the average units per day of the top 10% of performers? If you segment insurer and customer pay, what are the respective averages? Does the average vary from one geographic region to another? Please let us know what you think, or what you would potentially like to see, and we may be able to include it in future articles.

My final assumption is that the repairers who figure out how to continually increase productivity will be the winners … not just for their insurance partners, but also for their business. I don’t think I will need to eat any crow on that one!