CHALLENGING THE STATUS QUO IN A FRAGMENTED MARKETPLACE
Column by DOUG KIRK
Is the global collision repair industry broken? The world of collision repair is remarkably similar around the globe with very common business practices and models or what we now refer to—somewhat laughingly, in my opinion—as ecosystems, and depending on your personal position in the industry, such as collision centre owner or technician, insurance broker/insurer direct/work provider, technician or part of the extensive supply chain, you will have your own point of view on the question above, I for sure have mine.
My name is Doug Kirk, and I reside in a small fishing village in Scotland and have had the great privilege of traveling the world and seeing almost every version of collision repair.
I began my journey as an apprentice painter in my home country in the very late 70s and one of my first experiences in the industry was being involved in one of the first Sikkens Autocryl installations in the U.K. When I met the technician representative, I thought that’s the job for me. Not because I wanted to be the fountain of all knowledge, because like almost every teenager I was lazy, which unbeknownst to me would be a great asset in my career.
Well, in 1989 I achieved my goal and got the keys to my first ever company car and was sent out into the world to educate it. That was what I thought. Boy was I in for a rude awakening.
I have had the privilege of working for some of the top businesses at senior level including ICI Autocolor, now Nexa, part of PPG; AkzoNobel, LKQ, and Sherwin Williams, all in global positions. I have met some amazing people, including a man I totally respected from the outset, Canada’s very own Mr. Sam Piercy.
I first met Sam when he was introducing waterborne product into Budds’ and, as the Global Technical Director for a U.K. Booth company called Junair, I was asked to come and talk to him about our patented solution, Qads.
Our paths crossed many times. Various people commented on how we were of a very similar point of view; I was told, “You both take no prisoners,” I was told by two close friends, John Beckworth and Kelvin Campbell.
Enough about me. Let’s get back to the question I raised: Is the global collision repair market broken?
The global collision repair market has its challenges, but there is nothing new in that. Most businesses do have challenges, but most businesses are not like ours; classed as low volume yet highly variable. Thus, the challenges we face are somewhat unique.
Here are some of the challenges we are experiencing currently:
• Vehicle complexity • Parts or supply chain issues • Pressure from insurers • Increasing operational costs • Changing customer expectations • Market consolidation • Environmental legislation and sustainability costs • Labour shortages and skill gaps
There is one thing missing from this list: our industry is not a value stream or an ecosystem as some think. It is a series of siloed businesses competing against each other to own and/or control the customer or the narrative.
In both 2010 and 2014, I gave a presentation to the CCIF in Toronto to address this ‘siloed thought process of who owns the customer.’ At the time I suggested that consolidation would accelerate this silo mentality and that, in under a decade, most of the business around the world would be controlled by a few entities. This is becoming a reality faster and faster. Silos drive the following: maximums and minimums—both of these are bad, driving inefficiency and higher WIP; greater rework, poorer profit, diminished quality, longer cycle times, poor employee engagement and, last but not least, an unsure future.
Don’t get me started on repair versus replace, or green parts, or robots taking over complex tasks of the technician, subjects I have a very pointed view on.
Until next time, I leave you with this thought: there is no global shortage of skilled labour. There is no skills gap. There is, however, a labour deployment problem. We keep on asking master technicians to undertake tasks that are well below their pay grade. When we do this, we get less bang for our buck. Think on that.
The global collision repair market has its challenges, but there is nothing new in that. Most businesses do have challenges, but most businesses are not like ours; classed as low volume yet highly variable.
