Recently, I was preparing for a presentation and was doing some research on ways to increase gross sales to increase profitability. I have written on this previously, but one of the easiest ways and most profitable ways is with better estimating.
Over the years, many of us have been approached by one of our technicians with a work order in hand with a complaint like this: “There is no way 9.2 hours is the correct time to R&R the radiator support!”
Fewer than 2% of labor times include time studies?
The latest figures I have heard are fewer than 2% of the labor times are time-studied in CCC, Audatex & Mitchell. It’s sad to think this is true, when car technology is multiplying each year and with the high monthly subscription cost to the shops. Unfortunately, I totally believe it to be true, and let me explain why. Since I am a third-generation owner, I have a few things from our history. One of them is the old large Mitchell Collision Estimator books from the late 1960s and early 1970s. Let’s take a look at a 1969 Chevy half-ton pickup fender replacement. For the RH fender, the R&R time was 2.0 hrs., plus .4 for antenna and .3 for moldings, for a total time of 2.7 hrs. I then opened CCC and looked up a 2018 Chevy half-ton, and the fender R&R time was 3.4 hrs. OK, the times are improving. Then I looked at a 2023 Chevy half-ton fender, and now it regressed to 2.1 hrs.! Granted, these two fenders have different designs. Let’s take a frame replacement. For the 1969 truck, the book time was 24.3, plus power steering 1.0, power brakes .7, and automatic .2 or a total of 26.2 hrs. The 2023 Chevy truck book time in CCC was much higher (sarcasm here), at whopping additional .8, or a total of 27 hrs. Just FYI: A properly written frame replacement estimate for today’s trucks could be nearly 100 hours when adding all the not-included operations.
It looks obvious the time studies that were done 50+ years ago by the information providers (IPs) are still paying them dividends. They are basically just throwing them up against the wall in the current software to see if shops will let them stick. Last I looked at my calendar, this is 2024. The vehicles of today are much more complex than those from OVER a half-century ago, and thus the book times should be adjusted accordingly.
A solution to effect change
So, what can the shops do about these archaic labor times? It’s called the Database Enhancement Gateway, or DEG, and it’s found at degweb.org. This is an organization that was created by AASP & SCRS over 15 years ago. One of the founders was the late March Taylor, a collision repair industry advocate and shop owner from Hawaii. The DEG’s online platform is a public place for shops to submit inquiries to CCC, Audatex, and Mitchell. These inquiries can range from questioning specific labor times to missing parts, P-page clarification, and more. Not only can any shop in the country submit an inquiry, but they can view all the prior “inquiries.” These can be printed and used when insurers deny labor times for, example, Clarifying P-page not-included items.
On the first page of the Database Inquiries, I was reviewing the submitted inquiries that had IP changes and here are just a few examples:
- Nissan Armada radiator support R&R time was changed from 7.9 hrs. to 13.1. That’s an additional 5.2 hrs., or a 40% increase in labor.
- 2017 Honda Accord rocker panel R&R went from 11 hrs. to 15 hrs., or an additional 4 hrs!
- 2019 Chevy Silverado LKQ hood refinish time went from 3.8 hrs. to 4.8.
Here is the deal: does every inquiry result in an IP change? No, but only by submitting an inquiry in the first place will they change. According to our government’s Bureau of Labor Statistics, there are over 200,000 folks employed in collision shops. After reviewing the DEG’s submitted inquiries, there are on average eight inquiries submitted per day. In 2024, there are approximately 255 working days. And with eight inquiries per day, that’s 255 x 8, or 2,040 per year. Sadly, only 1% of employees from the shops submit inquiries to DEG.
So, the question each one of us needs to ask ourselves is, “Do we want to be part of the solutions to our industry or part of the problem?” If every employee of America’s body shops would take just five to eight minutes once per year to submit a DEG inquiry, that would equal nearly 800 inquiries per day vs. the current eight per day. Change starts with us, folks, and that’s all there is to it. So, the remaining 99% of the shop owners, managers, estimators, and technicians need to get off their butts and help improve the industry by submitting DEG inquiries. A rising tide lifts ALL boats!!
