When I was asked to write a few words about what has changed with our shop since being on the cover of Collision Repair Magazine,  I started to jot down some points about what we changed in our business over the past 3 years. Next thing I know, I have an entire page of notes and now wondering how I can summarize what I had written down.

I started to think about how we changed and that thought quickly went to “why did we change”.

In Saskatchewan it started with a roll back in our paint materials of $5 per hour. Then it was the use of aftermarket parts. All of a sudden things were starting to get repaired cheaper in Saskatchewan, our margins started to change, thus clueing us that we had to change. We started analyzing our situation. Our material gross profit started a drastic change, our parts didn’t change that much, and our labor was getting eaten up. The problem was, parts were getting cheaper which in turn gives you fewer dollars in total sales, equals fewer dollars on the bottom line. Overhead expenses are increasing daily. Conclusion, door rates are not keeping up with the expenses we have to run our business successfully.

All of this has forced us to change. We began looking at organizing our shop using the 5S approach. We sorted, scrubbed, set in place, standardized until the shop looked like Canadian Tire, with signs everywhere and a place for every tool, piece of equipment, parts, parts carts, parts stands, right down to the vehicle itself.

We now have designated cells (if I used the word stalls, my brothers would choke me) for each level of collision, with the most important 2 being the “meticulous disassembly and repair planning” (I’d be choked twice if I used the term “teardown stalls”) cells. Every part of the repair process now has a “standard operating procedure”, so the techs can refer back if they have any doubts of what to do next.

Our pay system changed with every technician sharing every hour that is produced. We are continuing our career paths for our technicians, trying to hire from the bottom, sending them through the apprenticeship system, getting them as efficient as possible as quick as possible. We have Collision TV so the techs and management can keep up with all the latest and greatest.

What the future holds for our industry is more change. Through “continuous improvement” and sustaining our systems (the last of the 5S), it will be a lot easier to adapt to that change. Getting our door rates to where they should be so our technicians can be rewarded for their workmanship and constant training and the shop owners can get back to where they are profitable. Our profits cannot continue to shrink the way they have or there will be no one to repair cars properly.

First of all, I want to congratulate Darryl Simmons for having the vision to create a magazine that emphasizes what matters most in our industry and to persevere through the challenges of establishing a strong foothold with the collision repair community in Canada. For you, Darryl, it’s about the people.  Your publication has and continues to make a difference.  Thank you.

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Reflecting over the last five years, CARSTAR has continued to grow and is thriving in a changing business environment.  We have been successful in becoming a truly national collision repair network.   Amongst our 115 franchisees, we now have locations in all 10 provinces.

How have we accomplished this?

We have refined and clearly defined our business metrics. They are Brand, Systems, Metrics and Compliance. 

Brand - Our focus on building our brand with the consumer has intensified.  We are well on our way to achieving 50% brand awareness in Canada with the consumer.

CARSTAR has also built a trusted brand within the insurance community.  This positioning has also provided us the opportunity to be successful in providing a great value proposition to insurers that are looking for sustainable performance.

Systems – We have deployed through our network the CARSTAR Quality System (CQS).  The foundation of this program is ISO 9001-2000 designation.  Third party validation of consistent standards in operating our stores is in place and making a difference to all our stakeholders.

Metrics - We have increased our focus on measuring and managing store performance.     There is a clear focus on ensuring our stores continue to operate in a profitable manner. 

Compliance –We continue to focus on ensuring that our stores are meeting today’s more demanding standards of repair and operating within our systems.

The end result is that we can state with confidence that we are the only managed repair network in the country.  For us, as it is with Collision repair magazine, it’s about the people.  The right people coupled with the ability to adapt to the ongoing changes that our industry has experienced is what has kept the CARSTAR value proposition strong.

Why is this important today?  A quick look at the industry as a whole tells the story.

• Vehicle technology has driven the percentage of total losses to all time highs.  Overall, fewer cars are being repaired and ensuring quality repairs is more challenging.
• The consumer continues to be more demanding in the expectations of what great service means.  The need to project a strong professional image today is a critical success factor. 
• Consolidation within the insurance industry has accelerated.  Larger and fewer insurers, with a strong global focus dominate much of the Canadian landscape today.  There is a much stronger focus from them to manage spending on collision damaged vehicles.
• Operating costs have increased exponentially. Maintaining profitability is a challenge.
• We are still challenged to attract and retain technicians to our trade.
• Communications within key stakeholders within the industry have improved greatly, but tangible results from this are few as of yet. There is still much to be done.
• The need for national standards for collision repairs to aspire to is critical, and the process of exploring has begun, but today this need remains unfulfilled.

As an industry we have made significant progress in addressing the key industry issues, but there is still much to be done and there are new challenges on the horizon. 

On the repair side, the ability to get a reasonable return on the investment is still there, however, fewer repairs doing more volume is what it takes to accomplish this.

To the rest of the key industry stakeholders, whether insurers, parts, service and material suppliers, the adapting to the changing demands in doing business provide the same result.  Fewer will be doing more.

So, my final thoughts,

• Understand that the rules have changed –
• Get focused on what matters
• Put in place a plan to adapt your business

Although it will continue to take significant effort to keep up, it’s worth it.  The future remains bright for those that adapt.

Since we appeared on the cover we have found the collision industry to be on a constant but slow increase. Consumers are becoming more aware of how insurance claims work and are more likely now to file a claim then they were a few years ago. The insurers are promoting this, as many are now offering accident forgiveness.

It’s a gradual process but it is happening. Clients are more knowledgeable about the no fault system. Customer pay work is still trickling in but it seems that insurance claims have definitely increased

The industry is moving towards more consolidation and more shops running under banners. This has generally proven to be a great working relationship for all involved including insurers, collision centres and the consumer.

We have shared ideas and techniques   with the shops united under the banner. This has both improved the quality of   repair, savings on supplies, and availability of new training.

As part of the Fix Auto program, all shops must maintain the same code of ethics, with complete disclosure to the consumer and insurer. One of the benefits is being able to offer assurance to customers in the form of warranties that guarantee our work,    a warranty that is good at any Fix Auto. We have found that this reassurance brings us a lot of repeat business.

Courtesy, professionalism, cleanliness, quality repairs and respect for the environment: this is how we feel the industry is headed. It’s a great road to be on, full of potential and benefits for everyone involved.

Reflecting over the past few years has made us realize that we can affect change in our industry after all. The challenges a few years ago were an aging workforce along with a lack of new people entering the collision industry and the constant rise in the cost of doing business.

We developed our own formula for addressing these issues and we continue to apply this blueprint. Our ongoing association with the Nova Scotia Automotive Sector Council and the Nova Scotia Automotive Human Resource Sector Council has provided us with new and eager employees. We have active representation on the board of the Collision Repair Association of Nova Scotia, trying to establish an industry recognized certification program in our province.

These initiatives take time but we are beginning to see the fruits of our labour.

To help us address rising costs, we joined Integrity Collision Network, a marketing and buying group. Currently consisting of ten members, each shop is strongly committed to providing the highest level of workmanship, customer service, claims administration, employee development and environmental responsibilities.

We constantly work on providing staff training to maintain our expertise and we are trying to anticipate the adaptations of our industry. The recent regulatory announcement regarding waterborne paints is another example of such changes. Our staff will soon be fully trained to integrate this material into our shop.

Anyone can influence their situation with planning and the flexibility to react to change. We can learn from our experiences and partner with those who share the same vision and the same values.

Issue 4#1

When we appeared on the cover almost three years ago, White Oaks Auto Body had just completed the move to a brand new building with state-of-the-art equipment and plenty of capacity. Today we are seriously considering expansion plans. It’s been a good three years.

The aluminum repair part of our business has grown steadily over the last three years, and we are buying more frame machines to allow it to expand further. Since the day we opened for business at our new location we have been painting with waterborne coatings. We repair a pretty high percentage of imported vehicles, and the original reason for installing a waterborne paint system was to refinish those vehicles.

Over the last three years we’ve been using it more and more and, like everyone else in the industry who intends to still be in business at that time, I’m sure we will be using it exclusively by the end of the year.

When we built the new shop three years ago, we knew that mandatory use of waterborne was coming. The handwriting was on the wall. To paint with a broad brush, our industry at the shop level is not quick to adapt to change and does not welcome it.

I still encounter lots of skepticism about waterborne coatings. Skepticism can be a very good thing, because it prevents you from making decisions too quickly.

However, in this case, quickness is what is needed. Rather than waiting until the last minute, get a jump on these new technologies. If even a small percentage of shops wait until right before the deadline before converting, there simply won’t be enough technical paint reps to get the conversions done.