Collision repairers often don’t recognize the tremendous value of incorporating well-defined processes into their body shops, according to Steve Feltovich, president of SJF Business Consulting LLC.
Feltovich said that since beginning to apply lean production principles to the collision repair environment in the early 2000s, he has seen committed shops realize a multitude of benefits for their businesses.
“The lean process is designed to increase sales and profitability, improve ROI and decrease cycle time,” said Feltovich, who works with dealers, independent collision repairers and MSOs to make business improvements and achieve performance goals. “It can also help a shop deliver a higher-quality product in a lot less time at a lower internal cost with less stress on the entire staff.”
Autobody News recently reached out to Feltovich to learn more about the lean process and why he encourages shop owners and managers to take the steps necessary to implement it into their businesses.
Q: How would you define the lean process?
A: Lean is a very methodical, reliable and holistic approach to business improvement. It puts customer value at the forefront, so everyone wins---the customer, the insurance company, the organization and the supplier. What I’ve taught shops for many years is to look at lean as customer first. Although the insurance company transfers policyholder dollars to the shop, at the end of the day, everyone is ultimately paid by the customer.
There are five principal elements that make lean work: the elimination of waste; teamwork; the efficient use of resources; continuous improvement; and effective communication.
Q: Why do we need a better business model, such as lean?
A: The reason we need a better business model is that cars have changed; they are not manufactured the same, they don't function the same and as a result, they can’t be repaired the same. Today’s customers have also changed. They are more educated, more empowered and more knowledgeable. Whether we call it “Lean,” “Six Sigma” or the “Toyota Production System,” it’s just a label. The bottom line is we need an absolute business transformation bringing in a better business model.
Body shops have essentially operated the same way for the last 60 or 70 years. Across the board, everybody has been utilizing the same processes, and there is much waste in the system.
The industry as a whole is still plagued by many of these wastes that we identified in the early 2000s. I think the primary reason is that we haven’t trained managers to manage their businesses any differently. We continue to hire managers who have experience in the collision repair industry but don’t necessarily understand how to transform business into a leaner operational platform.
Q: What advice do you give shops looking to implement the lean process?
A: I tell them that you have to become a student in lean. Lean only works when the owner(s) and management team embrace the process improvement and philosophy.
Employees are managed differently using the lean process. Rather than dictating to them what you want them to do, you instead bring them into the problems that the business encounters and work together to make improvements. Management becomes more of a facilitator than a dictator of operational processes.
Training at the top of the tower is an absolute must. I think that is where most companies can derail---when the top people don’t understand the importance of continuous learning, embracing it enough and fully believing in it confidently before they try to roll it out to the shop floor. That’s where it fails---and fails ferociously in many cases.
Many people attend one 20 Group meeting or one lean process training session. I caution those who are first introduced to the lean process that they aren’t going to learn enough in one session to transform their business successfully. They can often do more damage than good. You need to attend many sessions and read books such as “The Toyota Way” by Jeffrey Liker. That’s the first book I recommend and the bedrock of beginning to even consider implementing lean in a process improvement way that will be sustainable.
Like any well-run business, it takes dedication, time and commitment from the people at the top of the organization. The lean process can often take a little additional effort because shops are undoing the traditional management learning and changing that outdated thinking into more of a process-oriented and continuous improvement philosophy. This requires considerable maintenance from the management team to keep it on track.
Q: How does the lean process differ from other processes?
A: The lean process differs from traditional managed processes on one key element: There’s a daily obsession with eliminating non-value-added, wasteful activities from getting in the way of producing greater customer value.
For example, if you have to order parts two or three times on a car because you didn’t do a complete, 100-percent damage analysis with disassembly and discover all of the damage and broken components the first time, then there are wasted activities. They are non-value-added because you were paid to buy or order parts one time and they were ordered two additional times. Wasteful activities can be found in administration, production and paint processes.
Q: How long does it typically take to implement the lean process?
A: People want to put a timeframe on lean; however, it all depends on how quickly you as a leader can build the culture around it. This includes how quickly you learn it, embrace it, understand it and then communicate it. It really varies and is about getting the team to understand that everyone’s job is to continually improve the business’s processes, so they get better and better.
Q: Why is it becoming increasingly important to get onboard with the lean process?
A: OEMs are now looking for their certified shops to have more refined processes in place, such as a front-end sales process, a scheduling process and damage analysis. Some manufacturers are starting to say you can’t get certified unless you have lean practices in place. Whether you understand lean or not, ask yourself if you are doing some of the basic elements of lean that give you a better throughput, higher quality and lower internal costs. Shops that don’t even know what lean processes are and have had no exposure to it are really going to be left behind at some point.
Another vital reason is due to the new technology in vehicles. I’ve heard from OEMs that 60 percent of collision repair is going to be related to technology and electronics. This includes cameras, computers, smart wiring, calibration, road-testing and checking for functionality. All of the scanning of codes and clearing codes are going to be tied to electronics and technology. Therefore, it will be important to have an effective operational process in place to help drive precision and eliminate defects and redundancy. If we don’t, I believe it’s going to be a chaotic mess to try to fix these advanced technological platforms coming our way.
We often go out and spend money on a new spray booth or frame machine. Although I’m in favor of purchasing efficient, up-to-date equipment, in a lot of cases we’ll spend our time and effort utilizing advanced equipment with broken processes when we could have worked on our processes and extracted a real return on investment.
I believe it’s critical for shops to begin building a new business model based on “lean processes” to remain competitive in the future.
For more information, email Feltovich at sjfeltovich@gmail.com.
Stacey Phillips Ronak