Panel & Paint

Motor Equipment News - - NEWS - By Peter Adams, group CEO, Cor­po­rate & Pres­tige.

It’s al­ways in­ter­est­ing to lis­ten to what’s go­ing on up and down the coun­try from the range of highly ex­pe­ri­enced panel shop op­er­a­tors I speak with on a daily ba­sis.

The chal­lenges faced by all are very sim­i­lar, and eco­nomic ten­sion be­tween re­pair­ers to get a rea­son­able re­turn on in­vest­ment, and in­sur­ers de­ter­mined to max­imise share­holder re­turn, has never been more in­tense.

It’s easy to get caught up in these strug­gles, how­ever as re­flected in last month’s col­umn – it’s al­ways good to con­sider what’s go­ing on in other coun­tries to un­der­stand the trends and the counter-mea­sures de­vel­oped by many to stay in busi­ness or thrive.

The UK re­pair mar­ket

So you reckon you’ve got it tough – it’s time to har­den up! Since 2008 the num­ber of body shops in the UK has ap­par­ently de­creased by 32 per­cent to Fe­bru­ary of this year. It’s ex­pected to re­duce a fur­ther nine per­cent by 2020, leav­ing them with a to­tal of around 3,000 col­li­sion re­pair shops to carry out the coun­try’s to­tal work­load – this ac­cord­ing to in­de­pen­dent re­search com­pany Trend Tracker.

With an av­er­age in­sur­ance re­pair claim cost­ing £1,380 (NZ$3,369) and leav­ing the re­pairer with an av­er­age profit of only £13.52 pounds (NZ$33.00) tak­ing 15.7 hours to com­plete – a mar­gin of less than one per­cent. Typ­i­cally they have a ra­tio of front end staff to pro­duc­tive tech­ni­cians at around 2:1.

The UK has a pop­u­la­tion of around 64 mil­lion, and with only 3,000 col­li­sion re­pair­ers that must mean some se­ri­ous wait­ing times and greater per­cent­ages of write-offs – up to 30 per­cent in some parts of the coun­try.

Some paint com­pa­nies have done deals with in­sur­ance com­pa­nies, mak­ing it that each shop has to have sep­a­rate paint sys­tems for dif­fer­ent in­sur­ers.

So in­stead of whing­ing about it, panel shop owner Jon Palmer de­cided there had to be a bet­ter way than hav­ing three ve­hi­cles in process of re­pair for ev­ery one of his tech­ni­cians. Sure it looked great – the work­shop was full of cars and they were al­ways busy mak­ing small money.

He dis­cov­ered there was this thing called “work in progress” that was a very ex­pen­sive over­head. The cause of the work­flow prob­lem was “de­part­men­tal­i­sa­tion” – the queu­ing of jobs wait­ing for a tech­ni­cian to be­come free to do the next op­er­a­tion so that the ve­hi­cle could be moved on to the next guy, and the next, un­til till it was fi­nally re­paired and ready to hand back to the owner. Cars hav­ing to be moved around was sim­ply lost and wasted time.

Yep, just nor­mal tra­di­tional stuff; you might think there’s noth­ing much that can be done about it – and you would be quite wrong. Job cy­cle times can be made much more ef­fi­cient, and this is at the heart of BodyShop Revo­lu­tion (www.bodyshopre­v­o­lu­tion. com) It’s a work­flow method that was de­vel­oped in the UK way back in 2010 by Jon Palmer that utilises gas cat­alytic dry­ing tech­nol­ogy and ro­bot­ics to drive through­put.

Us­ing this tech­nol­ogy, a body shop can dry 10–12 ve­hi­cles in a sin­gle eight-hour day us­ing only one booth. When you con­sider this against a typ­i­cal through­put of 4–6 ve­hi­cles, that’s a mas­sive in­crease, us­ing ther­mo­molec­u­lar tech­nol­ogy which cures fillers and paint in less than a minute.

Ad­di­tion­ally ro­botic dry­ing uses 70–80 per­cent less gas than a tra­di­tional oven.

Guthrie Col­li­sion Re­pairs of Nel­son have been to the UK to learn more about the sys­tem, and learned it was more than just the equip­ment. Ricky dis­cov­ered that Bodyshop Revo­lu­tion is a whole new way of re­pair­ing ve­hi­cles that was de­vel­oped to counter poor mar­gins. The sys­tem re­lies on parts be­ing de­liv­ered and ready for the re­pairs to com­mence, and one per­son per job – there is al­ways some­one work­ing on it as it goes through the re­pair and paint con­tin­u­ous work­flow process.

There are a few chal­lenges to mak­ing it work here due to pro­lif­er­a­tion of mod­els and parts pro­cure­ment, but ap­par­ently these can be over­come.

They say mad­ness is do­ing the same old thing day in and day out and ex­pect­ing a dif­fer­ent re­sult.

Bodyshop Revo­lu­tion is now in the US and Aus­tralia, but is yet to ar­rive here. Will your shop be the first in New Zealand to em­brace a prof­itable new way of busi­ness?

Canada any­one?

We rarely hear of events in Canada, and their col­li­sion re­pair in­dus­try is no ex­cep­tion. I un­der­stand they have a very con­sol­i­dated mar­ket­place, with the top four or five col­li­sion re­pair shop groups do­ing al­most 60 per­cent of all in­sur­ance com­pany re­pair work. It is ex­pected this will in­crease to 85 per­cent by 2018, mak­ing it a very dif­fi­cult place to be an in­de­pen­dent col­li­sion re­pairer.

These re­pairer net­works work closely with In­sur­ers to find rea­son­able so­lu­tions to parts pro­cure­ment and other is­sues to en­sure they didn’t have to have sep­a­rate sys­tems for each in­sur­ance com­pany.

Im­proved re­la­tion­ships with In­sur­ers have had con­sid­er­able merit, and are good for those ready to adopt change rather than be left be­hind in a very dy­namic and rapidly chang­ing mar­ket driven by economies of scale.

Read­ing be­tween the lines, it seems ap­par­ent that the rise of the panel shop groups have been the saviour of the Cana­dian col­li­sion re­pair in­dus­try – as op­posed to what is left of their UK col­leagues.

I’ve al­ways main­tained there is strength in num­bers; it’s the nat­u­rally op­po­site strat­egy of “di­vide and con­quer” that has worked so well for in­sur­ance com­pa­nies the world over. So why isn’t it hap­pen­ing here in New Zealand?

Yes, there is def­i­nitely a place for a pro­fes­sional body rep­re­sent­ing all re­pair­ers, but the time of the in­de­pen­dent panel shop has passed. You can try to pre­serve history, but un­less you are a state spon­sored mu­seum you are in all prob­a­bil­ity on a hid­ing to noth­ing!

And the point is…

The point of this month’s ar­ti­cle is that change is es­sen­tial and you must em­brace it to re­main rel­e­vant. It’s time to do your home­work; buddy up with some like-minded and pro­gres­sive work­shops, and do it bet­ter. There are some great so­lu­tions out there, and ther­mo­molec­u­lar tech­nol­ogy, a key as­pect of ro­botic paint cur­ing has got to be on top of your re­search list. Con­tact their oper­a­tions man­ager: [email protected]­v­o­lu­tion.com

If you’ve been hit by re­cent ra­tio­nal­i­sa­tion of re­pair net­works you have some ad­di­tional chal­lenges ahead. Ne­ces­sity is the mother of in­ven­tion, so it’s time to beat the bushes look­ing for an­swers.

You might start by look­ing at that tired old ex­cuse for a web­site that has yet to be changed from when it was first es­tab­lished. As per last month’s ar­ti­cle, you re­ally need to think about what might at­tract a per­spec­tive em­ployee, as well as a cus­tomer look­ing at hav­ing a car or fleet re­paired.

We live in a time when it’s OK to be larger than life, hence the pop­u­lar­ity of so­cial media.

Panel shops do amaz­ing things with bent, rot­ten and wrecked cars – check out a TV show on the web (or Sky TV) called “Count­ing Cars”, about a work­shop in Las Ve­gas full of guys with at­ti­tude.

You might even have a crack at mak­ing a video or two about the good stuff you do and ham it up for the cam­era. It’s easy enough to upload a video to YouTube or Vimeo and link it back to your web­site.

Just for a laugh you might even send out a link in an email to some of your key cus­tomers. But, be­fore you do, call Mark Seymour 027 758 5585 – he’s been talk­ing quite a lot lately about some cool ideas and ways to cre­ate prof­itable busi­ness.

Ideas are the easy bit, ac­tion is much harder. It’s so much eas­ier to bitch about a prob­lem than fix it. As al­ways, I en­joy a good de­bate and you can email me at pe­[email protected] with your con­tact de­tails and why I’ve got it so hor­ri­bly wrong.

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