The title of this article may have you scratching your head. How can “producing more” be a bad thing? Don’t we want to strive every day to do more, more, more and go faster, faster, faster? As a whole, meaning overall key-to-key time, yes. Departmentally, meaning as single departments, not necessarily. The fact is, overproduction can be hard on collision repair businesses and nearly impossible for collision shops to even recognize when it’s happening, or to realize the costs associated with it.
How can hyper productivity be bad?
The challenge with recognizing how departmental overproduction is harming your business is that it normally looks like something good. Let’s use the paint department as an example. You’ve got cars coming in from the body department. Your painting staff is bustling with activity. Everything is buzzing with energy. Employees are churning out work as fast as they possibly can. You may even be paying them overtime to keep up the volume and pace. Heck, you may even be incentivizing them with some sort of a bonus for all that productivity. It looks very much like something great is happening. But is it really? If the vehicles leaving paint and needing to be reassembled are backing up, this “waiting” comes at a cost.
Consider a relay race
Let’s look at an analogy to try to put some perspective on the concept. Think about a relay race. Collision repair shops are like relay races in that they consist of sequential operations. A car needing repair comes in through the front door. It goes through a sequence of departments until it is fully repaired and goes back through the door to its owner. In a relay race, a baton is given to the first runner. It goes through a total of four runners until it crosses the finish line. Sounds similar right? In the case of a relay race, any one runner going faster is good for the “whole” because there is only one baton and the race is finite. Considering how collision repair shops work, the runner runs and hands off the baton and then goes back and grabs another, and another, and another. He or she may do this regardless of whether the next runner needs another baton. He or she may end up creating a pile of batons because the next runner isn’t as fast.
In the “relay race” of collision repair, there is also far greater complexity due to the number of variables. There are varying numbers of runners in each leg of the “race.” And each task or “leg” requires a different amount of time depending on the extent or complexity of the repair needed. Furthermore, the collision repair “race” is continual; there is no specific distance or time that the race is run. Then there is the baton or vehicle -- let’s say the baton is placed in a box after each leg is run. The box holds the inventory for the next operation. In a perfect world, that box would hold only enough inventory to satisfy the pace of the next runner or downstream operation. Any excess inventory is now stuck in the form of “waiting.” Waiting is waste, waste is a cost or burden on the business. This is overproduction.
The human cost
Now, let’s look at one aspect of this cost on the business that usually isn’t considered. The impact on our people. When people are given a task or tasks and you put a pile of work representing a backlog in their “to do pile,” negative things can begin to happen, usually quite quickly. Employees feel pressure to perform, to keep up. They will begin to round off some of the corners on the tasks. They will make mistakes. All of this begins to add more stress and the cycle continues. Then the owner/manager becomes critical of the now recognized backlog of work and mistakes, compounding the employees’ stress even more. When people are stressed, corners are cut to create the illusion of improved efficiency, and, inevitably, morale drops.
Join us next month for part two in this series when we’ll dig into the financial cost of overproduction and overallocation of inventory.
