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Letter to the Editor

Go Lean But Don’t Starve

Well, last month our feature article suggested ways to be “cheap,” and this month, we are suggesting “going lean.” Am I editing a woman’s magazine or an industry newsletter?

Although I would love to share some diet and fashion tips with you, the “lean” in this month’s feature revisits the innovative but very common sense production philosophy of Lean Processing discussed on these pages several times before now - this time with comments and advice from collision repair facility owners who have implemented the process. Their warnings about what can at first be a bumpy ride and always demands their constant attention make for valuable instruction. Change is never easy, but, given the current economic conditions, tightening the belt is essential in any body shop that wants to succeed. The Lean Process can be compared to a diet - the kind of diet that requires a definite change in lifestyle and a long-term commitment to goals.

Cutting the fat and waste from a collision repair operation, adding up needed expenses, considering steps required to improve repair quality and turn around times, and determining prices to set for shop work should be obvious topics for discussion and decision by shop owners and their accountants. What is my profit goal? What are my expenses? How do I plan to reconcile these two key numbers?

Many shop owners around the U.S. have been feeling some angst about a few extra items that have been thrown into their financial math by their biggest customers, auto insurers. INSIGHT has been hearing grumbling about a category of dollars that insurers label “the cost of doing business,” which, as one body shop manager in Detroit commented, seems to include anything the shop has purchased and has needed to use during a repair, for which the insurer does not want to pay.

Another concern voiced by shop managers in Michigan is who determines - and by what method - the prevailing competitive price for labor and paint in any given area? See page 11 for some pretty skinny dollar amounts.

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