September 2000
Gus's Garage

When we were at Charlie's Café this morning, I was very eager to see how Gus responded to the four basic action plans we outlined the prior month.

For the past 30 days Gus and I had spoken on the telephone several times to clarify the action plans that we agreed to during my last visit:

• Measure - use the spreadsheet provided
• Report - publish a cycle time report
• Complete paperwork - finalize all RO billing at time of vehicle delivery
• Clean up the shop - clean-up clutter in shop

During our conversations I repeatedly emphasized that we are staying focused on cycle time improvements. I had to keep reminding Gus that he decided that his first objective is to improve customer service and cash flow. In addition, I explained to Gus how a cycle time emphasis would also contribute to:

• Eliminating wasteful practices
• Improving operational efficiency
• Improving quality
• Increasing teamwork

We reviewed the spreadsheet that is being used to gather cycle-time data. Figure 1 is the first report. The additional data points will not be listed on the report but used for internal analysis.

Figure 1.

JobCategory	Estimator	# of RO's	Avg. $	Avg. # of part deliveries	Avg. # days vehicle is on premises
I. Less than $1,000	Gus	15	570	1.2	3.9
	Kelly	21	610	1.2	3.3
II. Between $1,000 & 2,400	Gus	10	1810	3.8	7.5
	Kelly	26	1835	2.8	10.7
III. Greater than $2,400	Gus	6	4067	6.5	26.7
	Kelly	6	3120	5.0	20.7
Totals		84	$1571	2.7	9

Sales last month were $132,000. Kelly handled 63 percent of the 84 total repair orders last month and 61 percent of the sales dollar volume.

58 percent of the RO's were DRP sales.

The average DRP sale was $1817 and the non-DRP was $1052.

The lower sale price of the non-DRP can be associated with drive-in traffic and customer pay work.

84 percent of the dollar sales volume came from Categories II & III while the unit volume of those same categories was 57 percent of the total sales units.

Gus had also wanted to include the technician's names on the report, but I advised against it until we first attend to management and administration issues that affect cycle-time before pointing the finger at the technicians.

The report clearly illustrates that there is a relationship between RO dollar size, the number of part orders received and the number of days the vehicle is on site.

Gus suggested that he try to improve the numbers one category at a time, beginning with Category III. I thought that was good idea. Category III had 12 units or 14 percent of the total, but 34 percent of total revenue. Each job in Category III averages 25.5 days on-site with 5.8 part deliveries.

All but one of the heavier hits was a DRP job. A simple improvement strategy will be easier to manage within the DRP environment and also because there are a fewer number of files to address.

We established a beginning goal of 21 days on-site for the heavier hits and 4.5 part deliveries. The strategy is to have Gus handle these heavier hits since he is in the shop more than in the front office. Kelly, the other estimator, will handle the entire Category II & I files.

Gus will be responsible for writing the estimate and generating a parts order within 24 hrs of the car being towed-in or dropped off. When he completes that step, he will give the file to Kelly to perform a quick QC of the estimate & part order and return the file to Gus for final ordering and processing.

In addition, Gus will attempt to reduce the part orders to a total of three: the initial & 2 supplement orders.

Measuring and reporting the eight data points was the hardest thing for Gus to get a handle on. He wasn't able to start measuring until a week and half after my last visit. Everyone, including himself, had missed making the proper file entries for his office manager to record into the spreadsheet when she closed the jobs.

Approximately 46 percent of the files were also still open and not finalized at the time the customer picked up the car. Although both Gus & Kelly had reduced the backlog, they were still not completing their paperwork on time. We agreed that this figure should improve to 75 percent during the next 30 days. Cindy, the office manager, will be responsible for finalizing all Category I jobs the day prior to customer delivery. If the files are unclear or not properly documented, Cindy will perform and print a "pre-closing" final repair order for Gus to review and return the same day.

As for the clutter in the shop, the shop was much cleaner (swept up, less sheetmetal), but shop flow was still restricted due to the improper use of the work bays.

See the original comments and numbered reference location for last month's comments.

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. Shelving - paint cans - storage locker - stuff
6. Major toolbox - garbage can - parts - stuff
7. Masking paper - parts to be edged - garbage can - stuff - part stands

I specifically noted to Gus, that he has to keep the floor flow of the shop clear. He had set up a good flow from metal to paint, but has let the technicians expand their work areas to now obstruct the flow and force cars to go outside the building in order to get to the paint department. Gus will have to re-establish and maintain this company policy; there are no space or storage issues in the shop.

I also introduced to Gus a one-page document with selected quotes from the shop floor manual Implementing World Class Manufacturing by Rubrich & Watson.

• "Profits are the reward of customer satisfaction."
• "In manufacturing, customer satisfaction is defined as meeting a customer's expectation for the quality, delivery, price, performance, and service of its products."
• "Customer satisfaction requires execution by the entire plant team on the customer's requirement."
• "From the time the order is received until the customer has successfully received the product, everyone must be focused on the customer."
• "The engine that drives customer satisfaction is people, not equipment or products."
• "People are the most underutilized, but most flexible assets in our facilities."

I often refer to these quotes as a type of guiding principles for collision repair operators to follow.

Gus's objectives and action plans for the upcoming month are:

• Report weekly: Complete the report every day & publish it weekly to the staff - put the weekly reports on clipboard with old reports underneath for easy reference.
• Gus handles category III files only
• Kelly does a quick QC of each of Gus's repair orders & parts orders
• Remove the unnecessary clutter between paint and body
• Have the office manager close-out the less than $1,000 jobs