In November, I had the good fortune to visit both Japan and China having a chance to both examine firsthand the collision repair industry in both countries and, in Japan, to speak to shop owners, insurers, and suppliers at two Repair-Tech sponsored seminars.
Repair-Tech is INSIGHT’s Japanese licensee, producing a Japanese language version of INSIGHT for distribution to their Japanese INSIGHT subscribers.
In addition to INSIGHT, Repair-Tech is the exclusive licensee for Motor’s parts and labor times database, and through an affiliate represents I-CAR in Japan.
Collision repair in the metropolitan areas of Japan that we visited was quite advanced in relation to most shops in the U.S. By this I mean that the concept of industrialization as defined as a combination team labor and process production in use.
At large shops, e.g.: 40+ technicians, a team labor approach coupled with careful scheduling allowed quick completion of small to mid-sized repair jobs.
For example, on repair orders of up to $1,600, in by 9:00 AM, out by 4:30 PM, with the vehicle being picked up at the owner’s home or business and delivered back the same day being the norm.
Just how do you get one day turnaround for an under $1,600 repair and two days for up to $3,000? It’s a two part "trick:" first, getting the parts delivered, and here it is possible when OE dealers deliver up to four times per day and have very complete parts inventories. The second aspect is the utilization of a team labor approach and production line flow both in the metal department and in refinish. Only for heavy hits are vehicles moved into individual "stalls" for unibody pulls and metal repair.
Typically in metropolitan markets there is little on-site storage of vehicles waiting to be repaired, except for the undrivables, which may also be stored off-site. Repairs are scheduled and the vehicle is usually picked up by the shop, either at the owner’s home, place of business, or his OE car dealer. In many cases, an estimate has been written either at an OE dealership or claims center and the parts required have been ordered and delivered to the shop by the dealer based on that estimate.
DRP is only beginning in Japan, and in the case of DRP the shop writes the estimate and orders parts when the vehicle arrives at the shop.
When the vehicle arrives, metal department work on small to medium sized jobs is begun by a "team" of three. Disassembly as required is done and metal repair accomplished. On a one day job no unibody straightening is undertaken; however, the vehicle is usually checked at completion for alignment.
After metal work, the vehicle moves into refinish, where another team of three takes over, moving the vehicle into a prep area, which may in fact be the whole department. In some cases, it has full floor grating, tracks for vehicle movement, and an overall vacuum system for dust removal through the floor grates.
In the refinish department, most shops we visited had multiple booths and oven areas contiguous with the booths which were most commonly side loading, using the same floor track system as the rest of the refinish area.
Materials used were primarily of Japanese manufacture, with little evidence of major market penetration by U.S. or European manufacturers.
In most shops we visited, the vehicle was given a light "color sand and buff" treatment to remove any dirt nibs and to "dress up" the job for delivery. In Japan, vehicle maintenance is taken seriously. Most cars are kept clean and well-polished, and are typically 0 - 5 years old.
Rental or courtesy cars are not usually provided by either the insurance company or the shop, except in unusual cases, and this is one of the reasons that owners and insurers demand fast turnaround.
Profit Margins in Japan were reported to be lower as a percent of sales. For example, on parts the typical GPM was 10 percent to 15 percent. On labor, the figure rose to 50 percent to 65 percent, based on a door rate that was effectively twice to three times that of the U.S., and a clock to flagged hour ratio of perhaps 110 to 125 percent, book and judgment times being closer to actual clock times.
On materials, most shops reported GPMs of 15 to 25 percent, using on-site intermix and computerized scale systems. Almost all work except some light-trucks was basecoat-clearcoat.
Of particular interest was Body Repair Technical Training Center, the training repair center and brainchild of Mr. Isao Inoue, President/Publisher of Repair-Tech Publishing, Inc. The facility was built several years ago and is a state-of-the-art site for training and in-service. The amount of time, planning, and expense involved in such a place speaks volumes about the value placed on the training/educational aspects of the industry in Japan.
Such was the case, too, in visiting Nagoya, where Toyota’s Body Repair Training and Research Center is located. Quite an experience! Their facility employs over 150 staff members, including trainers, and a research/training shop area of perhaps 45,000+ square feet.
One of the more interesting systems was an automated buffing and clean-up "robot," which was programmed to clean up and polish out the entire vehicle unattended. ("NO photos please!!")
Toyota "approves" equipment, supplies, materials, and repair techniques for dealers’ use. While we did not visit them, I understand that Nissan, Honda, and Mitsubishi have similar albeit smaller facilities and programs.
In summary, my perception was that in metro areas, where space is at an absolute premium, Japanese repairers have developed "industrialized" shop layouts and procedures which reduce significantly the time required for a high quality repair.
Would all of their "systems" work here? Probably not. U.S. shops experimenting with "team labor" have usually abandoned it for a variety of reasons, the primary one being the difficulty of developing an effective pay plan. U.S. OE car dealers will make four deliveries a day about the same time hell freezes over, and, lastly, low cost space in the U.S. typically acts as a deterrent to "industrialization." Work flow with floor track systems and large areas with under floor dust removal systems are difficult to cost justify.
There are lessons to be learned however, and in future articles that we will be receiving from Repair-Tech, some of the techniques, systems, and shop layouts will be detailed.
As regards China, interesting but not much to learn, except that given cheap enough labor, anything can be repaired (e.g.: lots of guys sitting on floors, beating metal back into shape). Next month we will cover Body Shop Adventures in China in a little more detail.
Charlie Baker, Publisher
Reprinted from the January 1997 Issue of Collision Repair Industry INSIGHT.
© 1997 Collision Repair Industry INSIGHT. All Rights Reserved
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