Batenhorst: How do you measure shop throughput? Are you ignoring a crucial KPI?
In preparing this article, I researched the archives of FenderBender, and many of our industry’s legends have shared fantastic information on eliminating the waste that cripples productive flow in our shops. What I did find missing, though, is the topic of the actual measurement of flow. You may be thinking, “Yeah, Andrew, we look at our car count and our total sales; that’s good enough.” But is it really? Those measurements give you a data point at the end of the month. Which is where most repair facilities concentrate all their resources to pump out as much work as possible in the shortest window of time. This pushes people to the brink, causing needless mistakes, and the all-too-familiar syndrome of “delivered on a Friday, back for rework on a Monday.”
At its most basic form, flow can be measured daily. Choose your preference: dollars per day or hours produced per day. Let’s use some simple math to give you all a visual example. Gather your sales goal, labor percentage goal of total sales, average labor rate, and the working days of the month.
1) Desired sales goal x target labor percentage total
$300,000 X 45%= $135,000 labor sales target
2) Divide this amount by $80.00/hr (average labor rate)
$135,000/$80 = 1687 hours
3) Divide the hours by how many working days there are in the month
1,687 hours/22 days = 76 hours/day
Each department in the body shop now has a daily goal of producing 76 hours per day. Picture it this way: you want to bring in 76 hours’ worth of work each day, 76 hours blueprinted, 76 hours approved by a customer, 76 hours out of body, and so on. Now, rather than guessing that you have enough throughput to get you to your sales goal, you have a basic way to see how each sub-department within the operation is producing or not producing.
The formula is the easy part; now the next step is to record the measurement all month long. There’s software like AkzoNobel’s Carbeat production board that can measure this for you in a slick, automated way, but you don’t necessarily need this if your budget doesn’t allow for it. A dry erase board with columns representing each status of repair, and rows that indicate the days of the work week, can be set up to allow employees to update their daily throughput. During the production meeting each day, each department can go over if they hit their goal, and if not, what is needed to help achieve it.
With the data starting to generate, a true measurement of flow now materializes. It will uncover bottlenecks, waste, overburdening or underburdening of staff, triage issues, inaccurate scheduling, and truly allow you then to start effectively managing the output of the operation. As a disciple of Jeff Baker and Steve Morris, these concepts were instilled in me as a young manager at Pride Auto Body. This enabled me to treat each day of the month as the “last day of the month.” My month-end is calm and predictable. I am able to go home at a reasonable time and allow my team to have a simple way to track how they are performing.
