Avoid rabbit holes

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Avoid rabbit holes by staying focused on what is actionable in your shop

Friday, March 1, 2019 – 08:00 As published in ABRN (Auto Body Repair Network)
For almost everyone in business there is far too much to do and too much information to reasonably digest. Both suppliers and shops generate and receive an overwhelming amount of information daily. There is always the latest innovation, critical concern or alarming piece of information.

Avoiding rabbit holes can mean avoiding (from day-to-day operations) measures and information that are not actionable. Look for ways to move the needle, make improvements or maintain quality and consistency. Set yourself up to avoid rabbit holes. For Key Performance Indicators (KPI) focuses with staff, look for measures that people can relate to in their work space. Speaking with your paint department about a poor paint and materials (P&M) gross profit percentage may not be the best tool or method to help them relate and in turn move the needle. Having a conversation about what goes into the P&M costs as measured by hour is more relatable for production staff. Production staff is aware of the labor hours per job per repair order (RO) (you are providing these to staff, right?). More specifically, sharing cost per ounce of color, clear and surface prep is something very tangible for most production staff. Avoid the rabbit hole and discuss ounce and hours with paint staff.

I see this a lot with KPIs and similar business measures. These KPIs, or Critical Profit Variables (CPVs), are great and are valuable tools to help everyone better measure, and therefore better manage, their business. But all measures are not the same for all businesses. Financial measures and ratios such as Current Ratio, Breakeven, Cash Flow, ROI, RO, Return on Sales and more are wonderful measures, but are not always the best references with non-financial personnel. Other measures may not be the most suitable for all businesses. Two misunderstood measures that come to mind are sales per square foot and sales per employee. I’m not suggesting that these are not relevant or valuable measures; I’m suggesting that they are not as actionable as other measures. For these you can only increase sales or reduce employees (or even less likely, reduce square footage). So once these measures have been performed, they aren’t the best drivers of the day-to-day operations for body shops.

With KPIs, it is easy to go down a rabbit hole. Before spending too much time on any measure ask yourself: is it actionable? In the example above, you can discuss ounces used per refinish hour with your paint staff; they in turn can use that measure as a guide in their daily tasks. Avoid the rabbit hole.

Those sales per employee measures can be better used by jobbers, as this is a more suitable measure for this group, where staggered shifts and part-time employees can have a significant impact on staffing. Some jobbers will have part-time employees helping with order pulling and deliveries only during peak times, such as when they process and ship stock orders. With this group, we now have an actionable measure.

Find and use the KPIs that are best for you and those members of your team you are working with. All KPIs can help — just not always for all issues by all members of your staff. Find relatable, actionable measures that will provide opportunities for improvement and/or consistent performance.

Chasing solutions

Yet another rabbit hole is chasing a solution to a perceived problem. An example I was recently exposed to was with a friend’s shop — he was getting bids on a second spray booth. This can be a daunting task and can consume a lot of time. He was concerned about the apparent bottle neck in production. Rather than explore how the shop was currently utilizing the existing booth, he had already determined that a second booth was the answer. The rabbit hole thinking here was that he failed to explore other ways to get more production from the existing equipment. Stepping back (climbing out of the rabbit hole), some ideas were tossed out with a little roundtable discussion. What impact would spraying more parts off the vehicle have on booth utilization? One vehicle might still leave room for other parts from other ROs that can be painted and cleared alongside. What if nothing entered the booth until it was completely ready to spray (paint mixed, color matching done, virtually completely masked)? What if the first car of the day was readied the night before and could be sprayed at 8 a.m. (or start time)? The goal is working towards no idle booth time, making that expensive chunk of sheet metal earn its keep. My friend still ended up buying a second booth, but he was able to delay that purchase for almost two years. Sometimes you must stop, look around and make sure you’re not in a rabbit hole already.

Managing email

It’s easy to see rabbit holes forming from negative thoughts — or worse yet lack of thought. Over-analyzing data rather than focusing on solutions or changes to make is a big rabbit hole. One rabbit hole we all can fall into (Ok, maybe it’s just me) is our email inbox. How much time do we spend sorting through this growing mass of communication? Here, too, a little prioritizing can be helpful. Most emails can have a delayed response and maybe even a delayed reading. Consider having your emails automatically put into separate folders (easy to do with Outlook, Yahoo and Google mail). Having a separate email address for personal or family use can help scrub the inbox. Now your email inbox is less of a rabbit hole. Monitoring your inbox perpetually all day can be a distraction. Consider checking your email only a few times per day. First, check it in the morning when you are setting up your priorities, and then again as needed during the day. Emails, unlike phone calls, are not a “right now” action item most of the time. Usually people are expecting some delay in emails (as opposed to phone calls or texts). Don’t let your inbox become a rabbit hole.

Balancing workload

Another aspect of avoiding rabbit holes is prioritizing what we work on and with. Don’t forget the A-B-C rules of adjusting your daily list of things to do. Let’s be honest — you’re not going to get everything on your list done (too much to do and not enough time, for most of us). Making a list of tasks (avoiding other tasks as rabbit holes) every day will help. Some suggestions to consider: Mark all priorities as “A” tasks. These should be limited to tasks that if you don’t get them done will have serious consequences. You can then prioritize them as A-1, A-2 etc. in order of importance. “B” tasks are only to be worked on when you have no remaining “A” tasks. These would be nice to get done but are not critical. Consider delegating some or all these tasks to someone else. Your “B” priority can be some else’s “A” task. The remaining “C” tasks are all rabbit holes. Ignore them —they will go away or move up in rank to “A” or “B” tasks.

In short, rabbit holes are something we venture into all on our own either through over-thought or negative thoughts. Step back and take a breath. Is this “thing” I’m pondering so deeply worth the time? Is it truly an “A” priority?

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Do you 20 group? Here’s why you should.

There seem to be so many advantages to being involved in industry 20 groups; I am sometimes surprised when I realize that not every business owner or manager has found their way into a 20 group. I have had the good fortune to participate in several 20 groups in several industry segments. For those not familiar with the concept, there are a few common-ground rules that most groups seem to have:

To read the full article click here!   << Link to ABRN

Excellence in Material Management Awards 2018

Nashville, TN July 2018 – Awards were announced for Auto Body Repair shops achieving Excellence in Material Management. One shop is chosen from each of the Mike Anderson Axalta Business Council Groups. Collision Advice.com

Shops must meet high industry standards in order to be considered for these awards, including meeting or exceeding all environmental regulations, minimizing waste and using quality warranted paint materials. Shops are compared with several separate metrics that include measurements demonstrating the minimization of waste and environmental impact, cost control as measured in per RO and per refinish labor unit and producing quality repairs. Their cumulative ranking is compared to National Percentiles of these KPIs where each job was the top in their respective peer group.

These shops were chosen out of the groups who 1) Agreed to have their KPIs compared within their respective group 2) Had their purchases submitted independently 3) Supplied several key sales inputs needed to complete the calculations 4) Lean Material Management Reports compared for at least one year.

Finalists:

• MSO Group 2-5 Locations Leflers Collision, Newburg, IN.
• Independent Single Location Flawless Auto Body, Great Falls, MT.
• Dealer Shop/Group Ken Barrett Chevrolet, Batavia, NY
• MSO group 6-20 Locations Mackin Auto Body, East Vancouver, WA

And the Grand Prize Winner of the 2018 Excellence in Material Management is …
Flawless Auto Body, Great Falls, Montana

2018 marks the fourth year that J. Hunter & Associates has presented these awards. J. Hunter & Associates is an independent company that assists Auto Body Shops and PBE Jobbers nationwide in managing material usage and the shop level. More information about J. Hunter & Associates can be found at their web site. www.LeanMaterialManagement.com.

2017 Results

2018 Excellence in Material Management Awards…. coming in July 2018

Awards will soon be announced for Auto Body Repair shops achieving Excellence in Material Management.

Shops must meet high industry standards in order to be considered for these awards, including meeting or exceeding all environmental regulations, minimizing waste and using quality warranted paint materials. Shops are compared with six separate metrics that include measurements demonstrating the minimization of waste and environmental impact, cost control as measured in per RO and per refinish labor unit, and producing quality repairs. Their cumulative ranking in six KPIs determined their rank within their peer group.

Shops chosen :

  1. Agreed to have their KPIs compared within their respective group
  2. Have their purchases submitted independently
  3. Supplied several key sales inputs needed to complete the calculations
  4. Lean Material Management Reports compared for at least one year.

Want to find out if your shop could make the list?

Keys to Paint Dept. Profitability

Article Excerpt … From the paint department to the estimators, both Lefler and Myers—owner of the $4 million Flawless Auto Body in Great Falls, Mont., and a member of Mike Anderson’s Axalta Business Council 1—have completely revamped their approaches to managing paint and materials (P&M) sales and costs. In fact, they each have had the most notable P&M turnarounds within their lean materials management company group, J. Hunter & Associates, managed by industry consultant Jim Compton.

Full article in Fender Bender Magazine (click here) Jan. 2018

Why clear cost definitions are needed for P&M accounting, accountability

Working with jobbers, shops and manufactures across the continent, I have found several definitions of what people consider Paint and Materials (P&M).

Since accounting and accountability are both bi-products of keeping track of P&M, should there be a standard definition? 

To read the Full Article in ABRN Magazine (Click Here)

 

Thanks for the input and requests for this article link on Paint Dept. KPI’s…

The Keys to Paint Department Profitability
Managing paint and materials sales and costs requires careful attention to KPIs and a unified team effort. Ensure profitability is part of shop culture by discussing these numbers with your team, from the paint department to the estimators.

For 30 days, he dedicated time and effort to it. On each successive job, he concentrated on his efficiency, his technique, his use of a primer surfacer when refinishing vehicles, all in an effort to improve the tool’s profitability.

Read the full article on Fenderbender.com: https://www.fenderbender.com/articles/9046-the-keys-to-paint-department-profitability

 

Three basic ingredients to create a simple inventory and ordering system

By: Jim Compton Originally published: May 24, 2017 ABRN

Original  ABRN Article Link

There are several advanced methods to consider for inventory and ordering. Two options include CollisionLink, which is offered through jobbers utilizing the Comcept (jobber) management system. NuVentory is a program that works in conjunction with several jobber systems. Both of these systems provide ordering, inventory and reports. With links to the jobber systems, these programs provide dynamic content that updates current prices part numbers as they come to market. These and other systems can be found online or via your jobber.

However, for this article, we will talk about some simple, basic ways to start managing inventory and ordering. Many find it easier to start off with very basic methods, get everyone onboard then have the option to migrate to more advanced or dynamic systems. While this article is intended to talk paint and materials inventory, a similar approach should work with anything purchased on a regular basis.

For most shops, enlisting the support of their jobber can greatly help and simplify this task. We will use three basic ingredients to create a simple inventory and ordering system — standard operating procedures (SOPs), historic purchases (from the jobber reports) and input from staff.

First, we need to have some basic SOPs in place. These establish a basic framework for how we are going to do things and therefore what we are going to need to get those tasks done. For example, if we have determined that all repair work will be finished with 180 grit by our body techs, we don’t need to maintain body tech inventory in anything finer and only a few grits coarser. Similar SOPs can help reduce the part number count in the paint, detail and other departments of the shop.

Every jobber should be able to provide a report of purchases. Using a full 12 months will provide a very complete list covering just about everything used on a regular basis. Remove anything that is not used on a regular basis and therefore does not need to be part of regular stock.

With our SOPs in hand, we can consider only those products that fit within our SOPs as the regular or “Authorized Stock List.” This can help thin our regular stocked part numbers, making inventory simpler and setting a basis for ordering.

Getting technicians and other staff involved will help get buy in and support. We can now discuss what we need to stock, and then how much we need to stock. The purchase list from the jobber can be narrowed to fit SOPs with input from staff on what products, sizes, grits and methods works best. This can then be pared down to our authorized stock list. I suggest determining 12 months worth of supplies divided by 26 to give us a two-week supply.

A two-week supply can, in most cases, provide enough inventory to last at least one week, with minimal overstock and less rush or fill-in orders. Filling back up to this level with each order will keep inventory fairly stable and aid in accounting for inventory. For example, a shop using 100 gallons/units of clear per year will need 4 (100 ÷ 26 and rounded up) gallons/units on hand, along with the required activators. While the mix of activators may change through the year based on temperature and humidity, the quantity doesn’t need to change very much. For this example, the 4 units of clear will also require 4 units of activator. Sometimes that will be one fast, two medium and one slow, and other times that mix may change.

Why not one week of supply, some may ask. Even though most shops can get multiple weekly deliveries, two weeks seems to work better and reduce added deliveries, time spent ordering, receiving and other administrative tasks associated with inventory. Down the road, reducing from the proposed two-week stock to a one-week level may be feasible. It is at this point that consideration may be given to a more advanced system (like those mentioned above).

Using this pared-down list and calculated quantities, we can now not only create an order form, but also a recommended stock level that ties into our SOPs.

Several shops have taken the approach that only those items on the order form (authorized stock list) can be ordered and delivered by the jobber; any other items require a signature or approval from management.

These order forms can also serve as an inventory form, providing a tool for the jobber to aid in the physical inventory (counting) process. Many jobber systems will allow for an order or quote to be created, providing an extended inventory valuation. These order forms can also be part of the process when reviewing and updating SOPs.

Another advantage of the now-stable set inventory level is an easier accounting for costs. In a production environment, cost of goods sold (CGS) is generally accounted for by taking beginning inventory plus purchases minus ending inventory. (Please keep in mind that this example for calculating CGS is over simplified — there is more involved.) CGS should be compared to sales every month to determine margins or profits. With a fairly stable and consistent level of inventory, we can calculate our margins each month without an inventory count and adjustment. Annual or bi-annual physical inventory counting and reconciliation is still recommended.

Adjusting inventory
As new techniques, procedures and regulations come into play, an adjusted authorized stock list may be needed. Many shops and jobbers have further edited these lists into specific department order forms, including  body shop, paint shop, detail and general shop. Leaving room on these forms for quick additions will help with small changes in SOPs or needs. A regular review of SOPs and authorized parts will help keep this system working.

The other systems, two of which are mentioned above, can be a more precise and dynamic method of keeping inventory and ordering. Here we discussed one of the simplest methods; walk before you run. This can still be a big improvement for those who don’t have a system in place and are just starting to embark on improved ordering and inventory control.

One thing everyone agrees on is that better management of inventory and ordering can help with improved P&M margins, reduced time and inventory on the shelf. Whether you choose the simple methods or some of the more dynamic tools available, better management of inventory leads to better P&M margins.

Response to Simple yet Hard working Inventory Programs

In response to inquiries to our May 30th, 2017 blog, several people have contacted us and asked for more information on simple easy to implement inventory programs.

There are several industry (Auto Body/ Collision Repair) specific and more sophisticated systems approach such as Nuventory, LeanTec, Paint Logic/Computer Logic, Collision Scan etc. Each of these systems offers some great attributes.

For a lot of Jobbers and Shops these systems are great. Others may want to start with something a little more economical, with a lot of the basic functions. We suggested ways for Jobbers (in the ABRN article) to work with their Shop clients and create: Authorized Stock Lists, Order Forms, Replenishment Levels, internally using Jobber system reports, Shop SOPs and MS-Excel.

We were asked by a couple folks about something a bit more sophisticated, with better controls, ordering functions, etc. Being heavy users of MS-Excel ourselves, we really like the MS-Excel based, Inventory Magic system by RWS Information Systems. Why reinvent the wheel?

https://www.imsinventorysystem.com/ click on the IMS Quick Tours three videos of 3-4 minutes. Or here on Word Press

For $9.95 you can get IMS basic to see just how simple this process can be. The IMS Pro at $89.95 is the greatest value in our opinion, obviously with more tools, reports and attributes. And for the middle of the road there is the IMS Deluxe at $49.95 (at the time of this post)

The Keys to Paint Department Profitability

The Keys to Paint Department Profitability
Managing paint and materials sales and costs requires careful attention to KPIs and a unified team effort. Ensure profitability is part of shop culture by discussing these numbers with your team, from the paint department to the estimators.

For 30 days, he dedicated time and effort to it. On each successive job, he concentrated on his efficiency, his technique, his use of a primer surfacer when refinishing vehicles, all in an effort to improve the tool’s profitability.

 

Read the full article on Fenderbender.com: https://www.fenderbender.com/articles/9046-the-keys-to-paint-department-profitability