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Letter to the Editor

Making Every Square Foot Count

Efficient small shops can maximize production without adding square footage

Can good things come in small packages in the Collision Repair Industry? While calculating "sales per square foot" is a more common exercise in the retail sales industry than it is in collision repair, it's a figure that can tell shop owners a lot about how well their operation is producing.

For example, a shop owner doing $800,000 in annual sales might not think he's doing as well as the shop up the street that has $4.4 million in annual sales. But if the first shop is 4,000 square feet and the second shop is 22,000 square feet, the two operations are actually quite similar; each turns out about $200 in annual sales per square foot of production space, just about the industry average.

Both those shops might be able to learn a lot from Mark Cantrell, co-owner and general manager of McLeod Autobody in Kirkland, Wash. Cantrell's business grosses $3.3 million a year in sales out of a 10,500-square-foot facility, or about $315 a year per square foot of production space.

Steve Waldren of Paramount Auto Body in Reno, Nevada, can top even that. His second-generation business has racked up annual sales of as much as $4 million - in a shop with just 8,800 square feet of production space. That's a remarkable $455 per square foot.

Cantrell and Waldren are among the shop owners proving it doesn't take a 20,000- or 30,000-square-foot facility to rank among the nation's top shops. What it takes is a determination to get the most out of whatever space you have.

Here are some ideas shop owners with small- to mid-size shops have used to maximize production without adding square footage.

Extend your hours

"As an industry, our shops are closed more than they're open," said Tony Passwater, president of AEII, an industry training and consulting firm. He recommended tracking how long each vehicle is in your shop's paint booth. If it's two hours, and you're only open eight hours a day, it's clear you're never going to be able to produce more than four cars a day.

There are two ways to address that, according to Passwater. First, there's technology - infrared, roll-on primers, faster curing products - that could cut the booth time needed per vehicle.

But extending the number of hours per day that booth is operating - and making you money rather than sitting idle - could be another good option. Not ready to add a complete second shift? Passwater suggests at least having one or more paint preppers come in early enough to have a vehicle in the booth ready to be sprayed right away when the painter arrives.

"You also want a car sprayed the last thing in the evening, too," Passwater said, so that at least some of the overnight "downtime" is used curing a vehicle until an automated timer shuts the booth down.

Better scheduling

Waldren said that, like a lot of shop owners, he used to practice the "in on Monday, out by Friday" form of scheduling, often bringing in a week's worth of vehicles on Monday, and leaving Friday with a nearly empty shop.

"We used to look at that full lot on Monday and think, 'We're going to be sitting fat this week,'" Waldren said. "But when I started paying attention to it, the more cars we had on the lot, the less production was actually taking place. Production was actually slower when the place was packed because instead of having to move one car to move another along, we were having to move two or three cars. So it was actually bogging down the process."

Waldren said the shop now uses a type of "load leveling" scheduling. (See "Smarter Scheduling" in the June issue of INSIGHT.)

"I figured out how many hours of production I can get through my shop in a week, and balance that out," he said. "I know we can produce so many hours this week, so I divide that by five and that's what I schedule into it each day."

Get the shop organized

Waldren said several years ago he realized that even in a smaller shop where a technician doesn't have to go far to get the tool or part he needs, a lot of that tech's valuable production time can be wasted walking around or looking for something. He told his crew it was time to get organized - only to have his top technician open up his toolbox with every tool neatly lined up in place.

"He told me, 'When your shop looks like my tool box, let me know,'" Waldren said. "And there was a lot of truth to that. So I went to work and now it does. Now I'm telling them their tool boxes should look like my shop."

The key, Waldren noted, is clearly indicating where things are to be stored so employees don't have to hunt around the shop for what they need.

"You don't need a lot of stuff in this industry; you just need to organize your stuff, and train people to return it to where it belongs after they use it," he said.

Cantrell is also an organization fanatic.

"We've determined that if we can help a technician complete just three-tenths of a hour more labor a day - just by making sure he has or can find what he needs quickly - that adds up to $3,000 a year," he said.

Use a marker to outline where each tool is to be stored in the tool room or area, Cantrell recommended. Labels, he said, tend to fall off, or confuse those who may call tools by different names. After watching a technician spend several minutes digging through a box of chains to find the length he needed, Cantrell created a "chain board" on wheels that makes it easy to bring all the chains - which have been color coded by length - to the job.

A grocery store pricing gun can be used to quickly add a work order number to all the parts for a particular job. And having a good supply of clips and fasteners on hand will pay off, especially since a number of suppliers offer a quick barcode and scanner system that will help track and bill for clips and fasteners on a per-job basis.

Better pre-production processing

Stopping a job mid-repair - to get insurance authorizations, or because a needed part hasn't been ordered or has not arrived yet - especially hurts smaller shops because there isn't space to let a lot of in-process vehicles just sit.

That's why a production system Toyota has developed for its dealership body shops strives to eliminate such work stoppages, according to Randy Profeta, body and paint business development manager for Toyota Motor Sales USA.

"Of the dozen or so shops using the process, one of the most successful was an 8,000-square-foot shop in south Florida that in nine months doubled the volume it was producing to $400,000 a month, without adding people or additional resources" Profeta said. "All we did is streamline the process."

As part of the system, he said, before a vehicle moves into production an estimator has torn down the vehicle enough to determine what parts and authorizations will be needed. Only after all the parts are in hand, and customer or insurer authorizations are received, does work proceed.

"We've found that each time a technician has to stop a job in-process, that adds an hour to the amount of time spent on that vehicle," Profeta said. "Under this system, once repairs begin, the process doesn't stop."

Profeta said being more thorough up front also eliminates the wasted time of making four or five parts orders for one job.

Smarter shop layout

Profeta said if most shop owners sketched out how vehicles actually move through their shop over several days, the drawing would very quickly "look like spaghetti."

"One of the Toyota system's key principles is: If you want to eliminate waste, eliminate the excess movement of people or resources, in our case, vehicles," Profeta said. "We find that technicians spend a lot of time - as much as several hours - each day moving cars. Shops should be laid out so a vehicle gets through the process with the fewest amount of moves."

The Toyota system relies on two production lines, one dedicated to repairing heavily damaged vehicles and the other fixing damaged but drivable vehicles that can be completed in an assembly line fashion.

Waldren said other keys to producing more out of smaller shops is freeing up as much floor space as possible - by getting rid of project vehicles, unused equipment and anything "gathering dust" - and by reducing the number of stalls per technician. He has 15 technicians and painters - plus three frame racks and a paint booth - in his 8,800-square-foot shop.

"Getting them used to having less space has taken time, but they begin to see the benefits of not having three stalls with cars just sitting in two of them," he said.

Nearly every shop owner at some point has wished for more shop space. But Waldren and Cantrell say most shop owners - even those with small shop footprints - can find small ways to boost production without spending a dime on expansion.

"I think it's actually better to limit yourself by saying, 'I'm not going to put up any more brick and mortar or hire any more people to solve the problem," Waldren said. "There are just a lot of things that can be done within your existing four walls to increase productivity."   o

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