Collision repair facilities can typically increase profits by raising prices and/or working to become more efficient, according to Mark Olson, CEO of VECO Experts (Vehicle Collision Experts, LLC).
“Raising your prices can sometimes be difficult,” said Olson. “There are a number of ways to achieve efficiency in your body shop and have a predictable high-quality repair outcome.”
VECO Experts provides onsite assessments and repair inspections at body shops across the country to ensure manufacturers’ processes and materials are followed.
Olson shared 10 steps to provide quality collision repairs as part of Dave Luehr’s Elite Body Shop Solutions webinar held in April. Luehr, the founder of Elite Body Shop Solutions, hosts monthly webinars to help collision repair shops reach their business goals and achieve their true personal potential.
Olson’s “10 simple steps to collision repair success”
1. Pre-health check scan (post and electronic reset /calibration) on every car
2. Procedures at time of estimate
Olson stressed the importance of knowing as much as possible about a vehicle prior to the repair and including the information on the original estimate. He recommended accessing repair information from the I-CAR Repairability Technical Support Portal (https://rts.i-car.com/); information providers, such as ALLDATA and Mitchell; OEM 1 STOP (www.oem1stop.com) and position statements from the car manufacturers.
3. Procedures given to technician or sublet vendor during the final repair plan meeting before beginning repairs
4. Procedures followed
“This is where the disconnect often comes in,” said Olson. “We have to follow the procedures, and this requires a culture shift.”
He used the example of technicians welding.
“Even great techs will say, ‘I took 20 welds out; I’m going to put 20 back in.’ Well, sometimes they are going to want 30 back in or a slot weld or a MIG braze," he said. "We may repair the vehicle differently than it was built originally.”
When repairers tell Olson that they have been doing it a certain way for more than 30 years, his response is that if you want to repair cars with 30-year-old technology, work on cars that are 30 years old. He recommends looking closely at the following procedures: weld count, electronic reset, corrosion protection, sectioning locations, parts removal/location, etc.
5. Proper welds
In addition to ensuring shops are utilizing the proper welding equipment, Olson suggests doing a test weld and destroy every time.
“This is not new---I-CAR has been saying this and teaching this since the 1980s and it is in accordance with American Welding Society (AWS) standards,” he said.
6. Proper corrosion protection
Olson advises shops to be aware of how much cavity wax they are buying.
“If you aren’t buying a can a week per technician, you’re probably not properly corrosion protecting,” he said. “If you don’t corrosion protect it, whatever work you do is likely not going to last.”
7. Proper use of quality control (QC) sheet
Although the majority of body shops use a QC sheet of some kind, Olson said they are often not used correctly.
“It’s either being ‘pencil whipped,’ meaning you put it [the QC sheet] on a car and at the end of the job, the detailer checks every box, or it is in the paint department not filled out yet, but miraculously at the end of the job it is,” said Olson. “That’s not a quality control system; that’s a pencil whip form. You might as well not even have it because what you are teaching your techs to do is just fill in the boxes.”
8. Proper refinish
When doing a repair, Olson pointed out the importance of a proper refinish.
“The color has to match the exterior as well as the underhood,” he explained.
This means the vehicle needs to look the same as it did before, rather than painting the underhood color the same as the exterior. He also said to pay close attention to the texture, back sides and gravel guard.
9. Proper use of intake (check-in) SOP
“The proper use of an intake check-in SOP is to fill out every blank every time,” said Olson. “If you have a box on the form that you aren’t going to use, take it off the form.”
A free check-in form can be obtained by emailing email@example.com with the subject line “Request Check-in Form.”
10. Proper vehicle protection
Are the vehicle’s windows rolled up or the openings covered? Are fluid lines capped and pigtails covered? These are just some of the items Olson said to be aware of in regard to proper vehicle protection.
Risks to Avoid
Every month, VECO Experts visits body shops throughout the United States to help them find their weak spots and elevate their operations. Part of this includes addressing the 10 steps to quality collision repair. Those that have been completed the way they were designed are marked green, the ones partially done are marked yellow and red is for tasks not being addressed at all.
“When you look at these 10 checkpoints, you can see very quickly what the scope of your shop is,” he said. “The goal is to get all of these green, [indicating they’re] appropriate.”
He highlighted the “Big Rocks” he notices in shops---those things he considers high risk to their companies.
“These are the things that could possibly put you out of business,” he said.
They include not using the quality control sheet as designed, 200 amp welders not being used when appropriate and neglecting to review and follow OEM procedures. Olson recommends reviewing all of the information relevant to the vehicle with the technicians and manager, having them sign it, then taping it to the car and taking a photo.
“Accountability will go way up with that very simple step, and that way you know it happened,” he said.
Another high risk for body shops is not using enough cavity wax.
“Every technician---if doing heavy structural repairs---should be using at least a can a week of cavity wax,” said Olson. “What we find is that they might buy two or three cans a month or they might buy one can per quarter. That’s clearly not enough.”
Olson said many shops do not understand the importance of doing a test weld and destroy. He suggested documenting this test every time in the file in case the information is needed later. In addition, he reminded participants on the call to ensure equipment is properly maintained and operable.
“Equipment that is not being maintained properly definitely cuts into your profitability,” he said.
Also, he talked about buying a new set of welder tips to be used on a squeeze-type resistance spot welder for every single major collision repair that is done in the shop, and then including the cost on the invoice. Afterward, the tips can be given to the customer or saved so the copper can be traded in later and the shop can buy the technicians lunch with the money.
Some of the “Medium Rocks” he notices in shops are risks that are customer service-oriented and may or may not affect the body shop.
These include check-in sheets not being completed, electronic files not being fully documented and frame measurements not being completed.
In some shops, Olson has noticed copper weld-through primer being used instead of zinc.
“No manufacturer recommends copper,” he said. “It should not be in your shop under any circumstance because no manufacturer recommends it.”
In addition, he said epoxy primer is often not present or it is used incorrectly, vehicle protection is not complete and painting is done under urethane set glass. The other medium-risk item he mentioned is having self-etch primer in the body department.
“Many technicians use it under seam sealer or body sheets, and it doesn’t belong there,” he said.
Is your company embezzling from you?
During the webinar, Olson also talked to attendees about their business process and how to avoid the net profit being negatively affected.
He then explained the “Canary in the Coalmine” principle.
“A Canary in the Coalmine is an advanced warning of some danger,” Olson explained. “The metaphor originates from the times when miners used to carry caged canaries while at work; if there was any methane or carbon monoxide in the mine, the canary would die before the levels of gas reached those hazardous to humans.”
In this case, Olson said the canaries are the problems in your shop that can affect profitability.
10 “Canaries” to look out for:
1) Come-back rate
This is when a car comes back to your shop for any reason to have something repaired, even if it is parked outside and a customer notices something before driving away.
“For shops that properly track this, the average we find is 20 percent come back,” said Olson. “We haven’t found one below 10 percent.”
He said the minimum average cost of come-backs is $400--$500 per vehicle.
“If you take the number of cars you repair every month and 20 percent on average are coming back, multiply this by $400--$500 to calculate what is being embezzled from your company,” said Olson. “Track it for 30 days and it will blow your mind. Sometimes it’s unavoidable, but the exception is not the rule.”
2) Internal come-back rate between departments
Olson said the internal come-back rate can also cost a shop more than $400--$500 per vehicle. He mentioned three different types.
The first is when a technician receives a vehicle from another department, notices something that needs to be repaired and does the work himself/herself.
“That technician is going to lose 10--15 minutes of productivity and you’re going to spend more on materials,” said Olson. “If that technician is a 200 percent effective tech, you just lost 20--30 minutes of production from your shop.”
A second type is when a technician receives a vehicle and brings another employee over to repair something.
“Now you have two technicians wasting time,” said Olson.
The third is when a technician receives a vehicle and sends it back to a prior department.
“If you track that, you’ll be shocked at how much inefficiency you have,” he said.
3) Average start-stop rate
This is when a vehicle comes in and the work has to stop for some reason. That might be due to parts not being available or another car becoming a priority. Olson advises shops to look at how many times technicians stop during a repair.
4) Supplement number record
“If there are one or two supplements, it’s not a real big deal,” said Olson. “Every time you find more damage or change the repair, that is a change that hurts productivity.”
However, he often says shops have eight to 12 supplements.
“That’s killing productivity,” he said. “All you have to do is track it. If you can’t measure it, you can’t fix it.”
5) Are SOPs used the way they are designed?
6) If you are using SOPs the way they are designed, do they work?
7) Gross profit/net/expense percentage
Olson said it’s very important to a shop’s success to understand these three basic principles---gross profit, net and expense percentage.
8) Days to repair (keys to keys)
Keys to keys is the total amount of time the car is at the shop---from the time it is dropped off until it is picked up.
“A lot of people call this cycle time, but it’s not,” said Olson. “It’s how long the car is there. A car might be there for a week before it is touched.”
9) Cycle time or touch time
This includes the time the vehicle enters production through the day it is ready for delivery.
Olson asked webinar attendees how many of their technicians wear safety glasses in the shop.
“You can talk about safety all you want, but you need to demonstrate it in your shop,” he said. In addition to wearing safety glasses, he said safety includes a Material Safety Data Sheet (MSDS), training plans, safety meetings and respirators.
“People have different concerns in the shop and every business runs a little differently,” said Olson.
Rather than trying to focus on changing everything, he recommends picking one or two items and working with technicians to address them to be successful.
“Take it one step at a time,” he said. “Everything has to go in a process. You can’t do it all at once.”
To watch a replay of this webinar, visit https://attendee.gotowebinar.com/register/7978064457470349825. All registered attendees will automatically be notified of upcoming Elite Educational Webinars held each month.
For more information about Elite Body Shop Solutions and to sign up for the next monthly webinar, email firstname.lastname@example.org.
For more information about VECO Experts, LLC and the 10 steps to quality collision repair, call Mark Olson at 206-771-2111.