It has been about one year since the cover feature on our shop, not a lot has changed in that time. Our sales are still increasing, well over 10% again last year. We have implemented a few changes in the process and keep trying to improve one step at a time. What I have learned is that there is no silver bullet in this business.

Regarding the changes I have seen in the industry, I think the main change I have seen is the consolidation of insurance company programs with the shops (e.g. more insurance companies are working with fewer shops). That will help the best shops with more volume and force them to keep up the efficiency; there is a lot of talk about processes, lean etc.

It all sounds great but at the end of the day it certainly is not the only way to improve cycle time or net profit for that matter. I think a lot of people are hung up on gross percentage. I have been to a lot of shops all across the United States and Canada. The best shops that I have been to are the ones with good processes and A class techs that can produce plenty of quality work.

The most important number in the business regarding profit is the $ per tech clock hr. and very few people have clue what that is in their facility. Productivity is paramount to help in this regard and helps reduce cycle time at the same time, so it is win for the shop and a win for insurance company.

Our business is worse than a green grocer regarding lost profit through lost product, if a grocer does not sell that cabbage, apple or whatever he can may be able to sell it to-morrow or even the next few days. If we loss time through poor processes low class or slow techs or whatever its gone, as we all know time waits for no man. Yes your gross percentage may look great but as I often say to people it’s dollars that you take to the bank. Go to your bank to borrow money for that new piece of equipment and tell the manger how good your gross percentage is and they will look at you funny.

The other thing that I see in this industry is lack of change regarding the door rates, I think everyone will agree it has not kept up with inflation, while severity has gone up that has mainly come from parts increase with more and more technology in cars nowadays. It would be easy to blame the insurance companies for the low rates but I do not think they are really to blame at all, sure they pay the bill most of the time but its more a supply and demand situation in the market that we find ourselves in. Over time the market will correct itself and new environmental rules, waterborne paints etc will thin out the number of shops also.

Our company will keep improving one step at a time, right now we are changing our management system and hoping that will help us keep tract of our cycle time and productivity easier. One of the neat features is the tech's can now send an e-mail to estimator, production manager, parts manger etc from their stall for any requests they may have and will able to keep working on the job instead going looking for someone. Our estimators, production staff all have Black Berries for their e-mails if they are not at their desk. So there is always something improving and trying to use technology to our best advantage.

There is still lots of room for improvement here, as I said earlier there is no silver bullet that is the easy answer, just honesty and lots of hard work are still the main driver in our business and we are blest with an excellent staff with very low turn over in an industry that struggles with turnover and lack of good staff.

There have definitely been some changes for both Eastside Collision and the Eastside Group since we were on the cover. We’ve purchased the Car-O-Liner frame machine, completed the Car-O-Liner training in Detroit and are now doing all our own frames as well as for other shops. This benefits our cycle times due to having our own in house suspension/mechanical repair dept. We have also hired a well respected glass installer to  increase current sales and offer our fleet customers the service of mobile repair and replacement.

On the Industrial end of the Eastside Group’s business, we have now started manufacturing composite parts for the bus industry and for our Volvo Daycab conversions. 

Eastside Heavy Truck has designed a process to shorten the cab and make the Volvo Highway Tractor into a day cab. This process has been patented, and we now contract out  the  manufacture of these kits to our Industrial division. In the very near future we will be seeking to certify shops in Canada and the United States on this process.

Normally sleeper type cabs that are miled out are reconfigured to day cabs. It’s a bolt-on/bolt-off system with most, but in Volvo’s 610 and 660 series, the sleeper is integrated with the cab. Our patented process extends the useful life of this tractor by converting it into a local hauler.

The big change that we are seeing is that the rules have changed for the business as a whole. For the first time in our industry insurance companies are gearing their Direct Repair Programs (DRP) around performance and best-in-class status. 

People perform best when they are challenged, and it is our belief that the insurance companies’ new intensified focus on performance will have this effect on our industry.

Speaking of Direct Repair Programs, giving discounts might have its downside, but it also has its positives. For one thing, as an industry it has encouraged us to become overall better business people.

It has literally forced us to revise our thinking and be more creative. To stay profitable in today’s marketplace you have to give a lot of attention to the operation side of the business and eliminate all waste from your facility.

At Supreme Collision we are very fortunate to be a member of CertifiedFirst. As a member of the banner program we have been exposed to ideas such as Throughput Performance Solutions (TPS). It’s enabled us to significantly raise our overall performance and allowed us to track and improve our Key Performance Indicators (KPI).

Whether it is cycle time, touch time, capacity or any of the other KPI that insurers are examining to determine which shops are best-in-class, TPS allows us to address them and make sure we meet our goals.

There is going to be a lot of opportunity in our industry for those business owners who have focused on operations, marketing and relationship building.

This is no surprise to anyone who is in the industry and who also lives in Alberta, but we have a critical technician shortage in this province.

If you live in Calgary and have an accident, you probably won’t be getting your car back in less than a couple of months. There aren’t enough people to do the work.

Part of the problem is that Alberta is a very hot job market. Right now unemployment is hovering around zero per cent. But I think a much bigger part of the problem is the flat rate system.

When all the technicians are subcontractors rather than employees, we shouldn’t be surprised to find out that they don’t have time to train apprentices.

I pay by the hour, because I believe very strongly that is the best system not only for maximum efficiency, but because in my opinion it is the best way to ensure that your technicians can take the time to take a green apprentice under their wing and make sure they develop the skills they will need to become a journeyman.

Where is the next generation of auto body technicians? They have gone into other industries, where they can receive training in their craft, not to mention higher pay.

I hope we can reverse this trend before it‘s too late. As more people retire, we will find ourselves in a situation where not only can we not hire technicians, we won’t be able to find anyone to train them.