While calculating “sales per square foot” is a more common exercise in the retail sales industry than it is in collision repair, it’s a figure that can tell shop owners a lot about how well their operation is producing.
For example, a shop owner doing $800,000 in annual sales might not think he or she doing as well as the shop up the street making $4.4 million, but if the first shop is 4,000 sq. ft. and the second shop is 22,000 sq. ft., the two operations are actually quite similar; each turns out about $200 in annual sales per square foot of production space—just about the industry average.
Both those shops might be able to learn a lot from Mark Cantrell, co-owner and general manager of McLeod Autobody in Kirkland, Wash. Cantrell’s business has grossed $3.3 million a year in sales out of a 10,500-sq.-ft. facility, or $390 a year per square foot of production space.
Steve Waldren of Paramount Auto Body in Reno, Nev., can top even that. His second-generation business has racked up annual sales of as much as $4 million—in a shop with just 8,800 sq. ft. of production space. That’s a remarkable $450 per square foot.
Cantrell and Waldren are among the shop owners proving it doesn’t take a 20,000- or 30,000-sq.-ft. facility to rank among the nation’s top shops. What it takes is a determination to get the most out of whatever space you have.
Here are some ideas shop owners with small- to mid-size shops have used to maximize production without adding square footage.
Extend your hours
“As an industry, our shops are closed more than they’re open,” says Tony Passwater, president of AEII, an industry training and consulting firm. He recommends tracking how long each vehicle is in your shop’s paint booth. If it’s two hours and you’re only open eight hours a day, it’s clear you’re never going to be able to produce more than four cars a day.
There’s two ways to address that, Passwater says. First, there’s technology—infrared drying systems, roll-on primers, faster curing products—that could cut the booth time needed per vehicle. But extending the number of hours per day that booth is operating—and making you money rather than sitting idle—could be another good option.
Not ready to add a complete second shift? Passwater suggests at least having one or more paint preppers come in early enough to have a vehicle in the booth ready to be sprayed right away when the painter arrives.
“You also want a car sprayed the last thing in the evening, too,” Passwater says, so that at least some of the overnight “downtime” is used curing a vehicle until an automated timer shuts the booth down.
Better scheduling
Like a lot of shop owners, Waldren admits he used to practice the “in on Monday, out by Friday” form of scheduling, often bringing in a week’s worth of vehicles on Monday, and leaving Friday with a nearly empty shop.
“We used to look at that full lot on Monday and think, ‘We’re going to be sitting fat this week,’” Waldren says. “But when I started paying attention to it, the more cars we had on the lot, the less production was actually taking place. Production was actually slower when the place was packed because instead of having to move one car to move another along, we had to move two or three cars. So it was actually bogging down the process.”
Waldren says the shop now uses a type of “load leveling” scheduling.
“I figured out how many hours of production I can get through my shop in a week, and balance that out,” he says. “I know we can produce so many hours this week, so I divide that by five and that’s what I schedule into it each day.”
Because this type of scheduling means vehicles spend less time in the shop before someone is actually working on them, it improves cycle time, even if some cars sit over the weekend, according to Kent Carlson, owner of Collision Resources, Inc. in Libertyville, Ill., whose company conducted a 10-month study of three shops before and after they switched away from bringing most cars in on Monday.
“If you can better balance out your schedule, we’ve seen that cycle times have dropped by an average of two days, with a 31-percent improvement in the hours produced per repair order per day,” Carlson says. “Obviously those are some pretty significant results for the shops.”
Get the shop organized
Waldren said several years ago he realized that even in a smaller shop where a technician doesn’t have to go far to get the tool or part he or she needs, a lot of that tech’s valuable production time can be wasted walking around or looking for something. He told his crew it was time to get organized—only to have his top technician open up his toolbox with every tool neatly lined up in place.
“He told me, ‘When your shop looks like my toolbox, let me know,’” Waldren says. “And there was a lot of truth to that. So I went to work organizing the shop. Now I’m telling them their toolboxes should look like my shop.”
The key, Waldren says, is clearly indicating where things are to be stored so employees don’t have to hunt around the shop for what they need.
“You don’t need a lot of stuff in this industry, you just need to organize your stuff and train people to return it to where it belongs after they use it,” he says.
Cantrell is also an organization fanatic.
“We’ve determined that if we can help a technician complete just three-tenths of a hour more labor a day—just by making sure he has or can find what he needs quickly—that adds up to $3,000 a year,” he says.
Use a marker to outline where each tool is to be stored in the tool room or on a shadow board on the wall, Cantrell recommends. (Labels, he said, tend to fall off, or confuse those who may call tools by different names.) After watching a technician spend several minutes digging through a box of chains to find the length he needed, Cantrell created a “chain board” on wheels that makes it easy to bring all the chains—which have been color coded by length—to the job. A grocery store pricing gun can be used to quickly add a work order number to all the parts for a particular job. And having a good supply of clips and fasteners on hand will pay off, especially since a number of suppliers offer a quick barcode and scanner system that will help shops track and bill for clips and fasteners on a per-job basis.
Better pre-production processing
Stopping a job mid-repair—to get insurance authorizations, or because a needed part hasn’t been ordered or arrived—hurts smaller shops especially hard because there isn’t space to let a lot of in-process vehicles just sit.
That’s why a growing number of shops are adopting a process often called “blueprinting,” with the goal of eliminating—or at least reducing—such work stoppages. Under the system, before a vehicle moves into production, an “estimator” has torn down the vehicle enough to determine what parts and authorizations will be needed. Only after all the parts are in hand, and customer or insurer authorizations are received, does work proceed.
Does the vehicle sit idle under this system for a little more time before starting the collision repair process? Probably. But proponents of blueprinting say this is more than made up for by the rapid progress the vehicle makes through the repair, refinishing and reassembly processes without the interruption of waiting for parts or supplement approval called for once the repair process has begun. It’s a way to get more work through your shop without adding space or employees, or even burning employees out by pushing them too hard.
Smarter shop layout
If most shop owners sketched out how vehicles actually move through their shop over several days, the drawing would very quickly resemble a tangled plate of spaghetti. A lot of time now spent moving cars could be used for production—if the shop’s layout allows it. A production system Toyota is working on in some of its dealership shops, for example, relies on two production lines, one dedicated to repairing heavily damaged vehicles and the other fixing damaged-but-drivable vehicles that can be completed in an assembly line fashion.
Waldren said improving shop layout to produce more out of smaller shops also involves freeing up as much floor space as possible—by getting rid of project vehicles, unused equipment and anything “gathering dust”—and by reducing the number of stalls per technician.
“Getting them used to having less space has taken time, but they begin to see the benefits of not having three stalls with cars just sitting in two of them,” he says.
Expand your facility without building
Even if you’re “landlocked” with no property on which to expand you may be able to “buy” yourself some more space without adding to your building. Many shops have used sheds or carports to cover some stalls in their parking lots for use—in the right climates—for detailing or drying vehicles. This gives the shops added work space without a lot of zoning or permit hassles.
Buying or leasing another nearby building to add to your work space may not be cost-effective, but leasing off-site parking space may be a less-expensive means to free up some space at your facility.
Better parts handling
Whether you’re in a metropolitan area and can get several parts deliveries a day from each dealer, or in a rural shop that has to have parts shipped in, “cut-off times” are critical to turning big numbers in a small shop. If you order that critical part you need at 2:03 p.m., and the dealer’s cut-off time to get that part on his stock order to the warehouse (and then on its way to you) is 2 p.m., you’re three-minutes too late to shave a day off how long that vehicle is in your shop. So find out what the cut-off times are for each of your parts suppliers, and post them near each phone or computer used to order parts.
Parts can also take up a lot of space in a shop—space that could be used for fixing cars.
“If the most valuable space in the shop is the shop floor, then look what’s on the shop floor and what you can get off of it,” Waldren says.
If parts are taking up too much space, work with your parts suppliers to get “just in time” deliveries, having parts arrive just as you’ll need them, not days before the vehicle even arrives in your shop.
Hang wall-mounted racks above stalls to provide places for parts that might otherwise be taking up floor space. Bulky bumper covers can be laid over two pieces of pipe suspended from the ceiling; a step ladder is all that’s needed to get these parts up or down from this storage area, or the pipe rack can even be outfitted with a counter-weight system so it can be pulled down to get parts on or off it.
Nearly every shop owner at some point has wished for more shop space. But Waldren and Cantrell say most shop owners—even those with small shop footprints—can find small ways to boost production without spending a dime on expansion.
“I think it’s actually better to limit yourself by saying, ‘I’m not going to put up any more brick-and-mortar or hire any more people to solve the problem,” Waldren says. “There’re just a lot of things that can be done within your existing four walls to increase productivity.”
