In his Wednesday morning session, "Why Lean Implementations Fail in the Collision Repair Industry," Tony Passwater, president of Indianapolis-based consulting firm AEII, outlined eight critical factors for a successful lean implementation. "When there are failures in one or more of those factors, the implementation has limited or no success," Passwater said.
The factors include communication, leadership, commitment, strategy, timing, preparation, understanding and teamwork. "Most collision shop owners focus on one or two of those elements, and then discount the others," Passwater said. "This undermines the implementation. There are a lot of collision shops struggling because they think they are utilizing lean, but they aren't achieving the success that others have."
According to Passwater, teamwork is one of the concepts that collision shops consistently fail to fully grasp. "The mindset of using a flat rate for individual compensation has to go away," Passwater says. "You don't eliminate incentives or compensation for efficiency, but the typical individual flat rate just doesn't work when it comes to lean or Kaizen philosophy."
Flat rate reimbursement encourages producers to be an island unto themselves, which discourages the type of teamwork required for a lean implementation. However, shops have to have the staff available to create teams and re-architect their work flows.
"You can map out these process team scenarios, but what happens if the number of staff you have available eliminates those options?" Passwater said. "If you don't have a good source for entry level techs, and a path built in so a 'C' tech can work his way up to being a 'B' tech, then it's ridiculous to push that concept into a shop."
Timing and preparation also present challenges for collision shops. Shops will, for instance, embark on "5S" methodology (sorting, straightening, sweeping, standardizing, sustaining). "The whole idea is that the 5S strategy will include a commitment so the concepts will continue throughout the operation and be sustained forever," Passwater said. "But if you just start there, it's just spring cleaning; by the end of summer everything is back to the way it was. If you do it wrong, it's a worthless effort."
Timing of these implementations is critical, and a process map has to be drawn up so employees know what needs to be changed, and why.
"It has to be done with everybody in the organization, not just the owner or managers," Passwater said. "If everybody doesn't agree on the problems, then they will throw wrenches into the process and it will fail."
Management also has to be committed to the process, and effectively communicate their goals in addition to accepting input from the rest of the staff. "You can drive these implementations from the top down, but you wind up going through a lot of people in the process," Passwater said. "You can take that route, but it's not the easiest way to do it. You have to have a commitment from the technicians and the rest of the staff."
Passwater will present the session again at 3 p.m. Thursday.
