Running with vendors

Technicians in collision management training often think that the number one complaint of customers is "the work was not done on time." In fact, this has been a common complaint stated against the collision repair industry for years. Most shop operators, when asked why work was not completed on time, will answer with frustration in their voice that not receiving needed parts or supplies was the culprit. Shop operators who strive to regularly provide timely service should take a careful look at the systems they have in place regarding their vendors.

The first things that shops should carefully examine are their procedures that have been set up to accommodate these potential "mine fields." Who in the shop is responsible for ordering the needed items? What items and how many should be routinely kept on hand? What are the companies' (both shop's and vendors') policies for handling back orders? How often and how will returns be handled? Most problems, even the large ones, can be either eliminated or reduced if an organization plans for them and develops operational procedures.

By developing these procedures, the time that it takes to solve them can be significantly reduced. One of the key time-reducing factors when using these procedures is that when problems arise, the decision on how to resolve them has already been made. There is no need to seek out a person to deal with the problem because everyone involved already knows what to do.

Because vendors are so much an integral part of the collision industry, having a solid, dependable working relationship with them is very important. They also realize how important your business is to them, and most are eager to supply you with not only the products that you need, but also with the service that helps you prosper. When screened carefully and directed effectively, vendors can perform services for you that will significantly reduce employee workload and increase your shop's profitability.

Choosing a vendor

There are regularly many vendors competing for your business, some doing so with price alone as a bargaining chip. In some cases, price may be the only factor a shop considers in choosing a vendor. Price is not always the best factor to go by, however. The price must be competitive, but the services that a vendor supplies can be just as important. Vendors who deliver to your shop multiple times a day will reduce the need to stock large amounts of inventory. If a vendor rarely is out-of-stock or has few, if any, back orders on the items you need, that's an advantage as well. If vendors help you develop a standard stock inventory and restock your shelves when they make deliveries, again your company saves.

When choosing a vendor, an effective tool to help you develop a good vendor relationship is a list of questions such as the following:

• How often and when will you deliver?
• If I have an immediate need, how soon can I expect to receive the item?
• Do you accept orders by phone, fax, Internet, etc.?
• Can I access your inventory on-line?
• Can I order before or after your normal business hours, and, if so, how?
• Will your delivery people properly place the bill in an assigned place?
• If provided with a stock list, will an outside salesperson come to my shop and replenish my stock on a regular basis? If so, how often?
• What is your return policy?
• Will one person be responsible for my account?
• Who will that person be?

To help vendors do their job better, a business needs to develop standardized supply lists. It should designate a centralized stock area that the vendor checks on a regular basis and that the delivery person stocks when delivering. This centralized location also will provide a place where technicians can go in the morning to restock their individual supply carts. The supplies could be kept near where the release meeting is held each day or in the lunchroom for convenience to technicians and management.

Keeping a standardized supply list also helps eliminate waste by eliminating the stocking of certain supplies for one technician and different ones for another technician. A company that uses 180-grit paper only, for example, operates more efficiently and economically than the one who has 180-grit paper on hand for one tech and 150-grit for another.

If a standardized stock list is posted on the designated cabinet door, a shop can have the vendor check on a regular basis and keep the minimum number of items in stock at all times. In some shops one of the concerns of using a system like this is fear that a vendor will "overstock" the needed items or somehow cause an overuse of materials. Keep in mind that a business can, with proper tracking and job costing, be able to tell if supplies "go missing" or are overused. By establishing a close relationship with each vendor and by monitoring materials use by job cost, then comparing supplies used, it is easy to determine overuse or pilfering. It is not naïve for shop management to believe that an honest relationship with honest employees and vendors is possible.

When a shop has solidly established vendor relations, vendors will often provide training, at little or no cost. Usually they will arrange for a convenient time so the staff can take advantage of the training without impacting shop production time.

Parts

Ordering parts can be complex. Receiving them on time to facilitate a speedy "through time" is a necessity for a successful business. Careful development of vendor relationships and procedures also can help manage this monumental task.

Establishing ground rules and procedures with parts vendors, whether they be OEM, aftermarket or used can and should be a priority.

Surveying potential parts suppliers, negotiating a reasonable discount, and establishing when where and how parts will be delivered all factor into successful parts procurement.

Other parts strategies include opting for vendors offering same-day or overnight delivery, if needed; providing a spot where delivered parts (including those delivered after-hours) can be placed; establishing reasonable return policies; and having an established place where returns can be picked up each time deliveries are made.

Having a specific person at the parts vendor who is responsible for your account, and also having a particular person in your business responsible for each job, either a parts person or the estimator to shepherd the vehicle through the repair process, also will contribute to a smooth and speedy repair process.

Placing delivered parts in a job-specific place should be the vendor's responsibility. The shop should order parts by repair or job order and have them delivered together, placed in a specific spot (parts carts help with this task) and have the paperwork given to the responsible person at the shop. The shop needs to have the parts checked by a person responsible for that job. The invoice price should be checked and posted. Damaged or incorrect parts should be identified immediately.

Vendors should be given a "batting average" report for their performance. This report will include factors such as accuracy, on-time delivery, and number of damaged parts. Though it may seem cumbersome and time-consuming for a shop to track all this information, many collision management systems track them and provide shops with a report each month or on-demand if needed. If a business does not use such a management program, a simple spreadsheet program can be developed. Even a simple hand ledger book can be used. It is important to know real numbers to make a sound cost/benefit analysis of a vendor's value.

Paint

While paint inventory is very similar to ordering parts and supplies, paint should be ordered from a separate standardized list. The selected items should be placed by the vendor in a specific storage place and be kept in stock by the vendor on a regular basis.

What makes paint suppliers different from other venders is the important training and technical support they provide. A good working relationship with your paint vendor will help when a technical problem or warranty problem arises as well as when new products are introduced to the market. Paint suppliers, with their knowledge about a bewildering amount of products specifically designed for differing shop conditions, will help establish and supply your needs for your specific shop conditions. When paint technologies change or environmental laws cause us to switch to new products (as shops in some states are now facing with the upcoming changes related to waterborne products), vendors can be extremely helpful. It is not unusual for a paint vender to come to a shop to work hand in hand to solve specific problems or to switch over to new products.

Paint manufacturers and their representative vendors also commonly provide training through paint-specific classes and on business management and supervisory topics. Shops can send their employees to up-to-date training on subjects as diverse as operational procedures, management and leadership.

Final word: Putting it all together

Vendors are indispensably involved with the everyday operations of collision businesses. They provide not only needed parts and supplies, but also aid with productivity, efficiency, and training. Though a trusting, professional business relationship between shop and vendor must continually be monitored, close long-term vendor alliances are often forged. Vendors know how much they need your business, just as you know how much you need their products and services. With clearly established goals set for your needs and what they will provide, and with close monitoring of their "batting average," a collision business can forge profitable and stress-free relationships with its vendors.