August 2000
Gus's Garage

Gus and I have just finished a 3-hour meeting at Charlie’s Café. I have found that the only way to get a shop owner’s attention is to get him away from the shop.

Gus has agreed to a quarterly contract of my services. (You may have thought I work for free!?) I will visit the shop once a month to help develop strategies, processes, and to provide coaching and implementation.

I pulled out my notebook and looked at what I had jotted down while walking through the production spaces as a part of last month’s visit. There were several areas that had stuff, as well as essentials.

As I walked through from the metal section, through re-finish, and looked around, I observed:

1. 4 vehicles in aisle - 2 re-assemblies - 2 small 1-day jobs;
2. Pick-up bedside - tool box- edged parts for assembly;
3. Tear-off parts - new parts - floor jacks - garbage can-stuff;
4. Banker friend’s "project car" - 67’ Mustang;
5. Major toolbox - garbage can - parts - stuff;
6. Masking paper - parts to be edged - garbage can-stuff - part stands;
7. Shelving - paint cans - storage locker-stuff.

The paint area is new. There is a downdraft heated spray booth and two double prep decks (vented and curtained). The metal & detail area has 8,000 sq. ft. of space with 10 metal bays and 2 detail bays that are separated from metal by a 6 ft. block wall. There are 2 frame racks and a computerized measuring system in the metal shop. Alignments are outsourced.

Gus’s business strategy focuses on quality repairs, projecting a professional appearance and conducting business with integrity and honesty. Gus has also responded to the growing demand in his area by increasing capacity and adding new equipment.

Gus depends on three key individuals: his son Fred who is now the lead painter; Frank, a metal technician and his longest employee; and Joe, his top metal tech who just came on board 18 months ago.

During this morning’s discussion with Gus I was able to complete last month’s assessment objectives.

I found that Gus’s concerns were based on a recent increase in comebacks and late deliveries. He noted that a couple of insurance adjusters had told him about an increase in customer complaints, which was unusual for Gus’s.

Gus and I reviewed his initial goals:

• Reduce stress on Gus
• $2.5 million sales
• Son to manage shop.

We then layered in these problems:

• More comebacks
• More late deliveries
• Customer complaints
• Cash flow concerns.

As we looked at this total picture it became evident that Gus’s drive to respond to growing customer demand by increasing capacity and sales had caused him to lose his customer focus, the very basis of what made Gus’s Garage successful. In the past year, Gus had focused solely on generating higher volume to keep up with demand and pay the bills.

I walked Gus through an exercise to illustrate how important it is to focus first and always on customer satisfaction. I wanted him to realize that, if his company maintained a focus on the customer, sales, profits, and morale will fall into line.

I had Gus list some primary needs and demands of his customers. When he finished, I listed the business outcome of satisfying each of those needs:

Customer Needs	Business Outcomes
On time delivery	Improved scheduling and resource allocation
Zero defects	Reduced waste and work
Fast turn-around	Improved cash flow

Gus also added that if he could achieve those outcomes, his high stress level would be reduced and sales should further increase. He got it exactly!

Before I suggested tactics, I wanted to be sure that there were not any threatening cash issues. We did a quick review of his financials.

Although there were areas that needed attention, the only immediate issue was the receivables. I had suspected as much from all the files piled on Gus’s and his estimator’s desks.

My objective then was to establish a set of action plans that can be successfully implemented during the next 30 days.

We determined to begin by improving repair cycle time as this could have a combined positive affect on both cash flow and on-time delivery.

I made sure that Gus understood that both the vehicle and the paperwork associated with the repair order had to be completed at the same time - meaning that all supplements had to be complete and submitted at the time the vehicle was ready for delivery.

Although he cringed at the thought of all the pending supplements and the challenge his estimator and he currently have in keeping up with the paperwork, he agreed to make the commitment. We devised a simple tactical plan, as shown in Chart 2:

Tactical Plan

Communicate to the entire staff the relationship of repair turn-around times and customer satisfaction. Communicate to the entire staff the action plans with timelines and accountabilities. Perform daily measuring and reporting of repair cycle times. Create a simple yet significant illustration of management's commitment to lead changes.

Gus and I agreed that there would be no reduced cycle time expectations at this point and that the main concern was to gather and record data for benchmarking. Our intent is to establish a measuring system, test Gus’s leadership and follow-through skills, and to see if measuring and reporting will affect overall shop performance.

With Gus’s input I have created a simple spreadsheet to record eight data points for each RO with the data entered when the car is delivered. Some of the data he will record are the number of days on-site, the dollar size of the job, the job category, and the number part orders.

During the next thirty days, there are four basic action steps that I have asked Gus to address:

1. Measure
2. Report
3. Complete paperwork
4. Clean up the shop.

Next Month: JJ will review the spreadsheet and identify issues with job turn-around times.

Depending on how Gus responded to comments on shop clutter and cleanliness, JJ will develop solutions to maintain shop order and organization.