Blueprint for SUCCESS

Supplements are a fact of life at most collision shops, but these mid-repair interruptions can reduce a shop's efficiency and impact customer service. More than a year ago, March Taylor, owner of Autobody Hawaii in Kailua-Kona, took a look at the effect supplements were having on his business. He didn't like what he found.

"For years, the industry has used the supplement as part of the estimating process," Taylor says. "We were driven down this path primarily because as cars became more complex, it was more difficult to get all of the damage correct upfront. I started to realize the impact the supplement was having on our own business.

"Work flows through more slowly, you have wrong or missing parts, or additional parts are needed. Cycle time goes to hell in a handbasket. It led to receivables being much higher than they would be otherwise. I looked at this and thought, 'How can we get a better estimate upfront?' "

Taylor has implemented a disassembly for repair (DFR) process at his 40,000-sq.-ft. shop to help create better estimates and reduce supplements. Used primarily with nonscheduled jobs, DFR requires the technicians to disassemble the vehicle, perform the pulling and straightening, check the wheel alignment and make a thorough accounting of all damaged components in an effort to create the most accurate estimate possible.

Automotive remarketing specialist Manheim is in the process of implementing a similar process (which it calls damage analysis) at a number of its facilities. "It's the construction of a comprehensive outline of the repair before work begins, as opposed to just a rough estimate," says Eric Burr, vice president of business development at Manheim. "Blueprinting involves capturing as many of the necessary parts and repair operations as humanly possible, in the proper sequence for restoration, using disassembly, expert analysis and documentation as tools."

Darrell Amberson, president of Lehman's Garage in Bloomington, Minn., and Collision Division director at the Automotive Service Association (ASA), says members of his shop's 20 Group have been talking about blueprinting for some time. He's seen varying approaches throughout the industry. "Some shops do it more formally than others," he says.

While this type of estimating can increase efficiency, it's not possible on every job. Blueprinting is only effective when the shop has the cooperation of the customer, the estimator and the insurance company.

It also doesn't completely eliminate supplements. "It doesn't guarantee a perfect damage report or parts order," says Burr. "Other things may be discovered through the repair process, but the frequency of additional damages should be greatly reduced."

Fewer supplements

At Auto-body Hawaii, Taylor says the challenges of his location were an added incentive to reduce supplements. Because his shop is in Hawaii, shipping additional parts often takes longer and is more costly than on the mainland.

Amberson encountered a shop owner in Alaska with the same problem. "They make certain they can proceed through the entire repair before bringing the car in, because of the cost of the transportation of parts and the time involved," Amberson says. "If they find something additional that needs done in the middle of a job, it can be a two-week delay in getting that part."

Customers also benefit through faster service and more accurate estimates. "Damage analysis is one tool in our arsenal to create value through reduced cycle time," says Manheim's Burr. "Consumers benefit the most from this process. There are no midstream delays in parts ordering. At the end of the day, you get reduced cycle times and improved customer satisfaction."

However, blueprinting can't always be used with every job. "Each DRP has its own requirements and its own challenges," says Amberson. "Some insurers want us to do a more abbreviated estimate that can be added to later. Others are more supportive of doing a better job of blueprinting up front."

"Primarily, you are doing this on non-scheduled work," says Taylor. "You need authorization from the owner to fix it, but you also have to be working with an insurance company that sees the value. The estimate might take a little longer than normal, but by waiting a day or two on the estimate, you decrease the probability of having a supplement."

Cars that are still driveable may also not be good candidates for blueprinting, since customers might not want to wait for a full teardown just to get an estimate.

Some insurance companies prefer the standard estimating process, particularly where customers may elect to cash-out rather than actually get the vehicle repaired. In some cases, insurance company requirements can lead to multiple supplements, which decreases shop efficiency. "A few of them can be short-sighted," says Amberson.

Many are coming around, though. Guthrie, for instance, noted that he hadn't received any resistance from major insurers he works with in New Mexico. "In this market, we don't get pushback because cycle time is so good," Guthrie says.

Different approaches

Approaches vary based on the size of the shop, the volume of business and the number of employees. At Car Crafters, Guthrie has hourly technicians doing the disassemblies. "I'm not taking commission employees off line to do this. These guys disassemble and reassemble cars all day. Each is assigned to a different estimator," he says. Estimators use a tablet PC to write sheets at the lift. Right now, Guthrie has two teams of technicians doing as many as ten disassembly/discovery jobs per day.

Car Crafters is a 10,000-sq.-ft. shop with 34 employees that did approximately $6 million in business last year. Guthrie helped develop the Collision Industry Management System (CIMS), a shop-management system acquired by Mitchell in 2005, based in part on some of the best practices instituted at Car Crafters.

"The damaged parts go in one cart, and the good parts go in another cart," says Steve Agnew, director of operations at Manheim. "You don't have to walk to get the parts. They stay with the vehicle during the repair process."

Taylor says that no matter what process a shop develops, communication is the key. "This won't happen unless your team wants it to happen," Taylor says. "It takes a team effort, and communication is vital. You need to have complete buy-in and a passion for change."

Having an onsite estimator also helps. "To support having an estimator in the shop, you need to have a substantial volume of work," Taylor says. "We didn't have enough volume here to have an estimator in the shop full time, so we went to Plan B. Our production manager has a laptop that he takes to the work station and enters the data into the estimate."

Not for everyone

Estimators and insurance companies resisting such change are the biggest obstacles for adoption of blueprinting, according to most of the shop owners we interviewed.

"There is still a fairly high percentage of insurance carriers that require or prepare visual damage estimates first before blueprinting can begin," says Burr. "There is also a sizable population of customers who are not interested in having cars repaired. They're seeking cash instead of repairs. Damage analysis only works for customers who are committed to having their car fixed, and insurers who are interested in it."

Information providers tend to play a peripheral role in blueprinting. "This is a process adoption issue more than a tools issue," says Burr.

Still both Amberson and Taylor felt the estimating systems could be improved to help facilitate more accurate estimates by further automating the access to some of the parts information and providing more complete parts lists.

While there is occasionally resistance from technicians, Amberson says most "embrace it because they understand that even though it forces you to do a better job upfront, the repair process is faster and smoother."

Technicians also grasp the value of reducing supplements for the shop and their own wallets. "Our technicians are at their highest efficiency when they are in their stalls, tools in hand and working on cars," says Amberson. "Anytime there is a stop in that process, there is a cost to the shop and reduction in cycle time."

"Everybody wins," adds Guthrie. "The car gets delivered, everybody makes money, everybody's happy."