You may be surprised to learn that many body shops create a “repair plan” at the end of the repair when everything has been documented and the final bill is created, according to Tim Ronak, senior services consultant at AkzoNobel.
Rather than a repair plan, he said this is more like an invoice that includes all of the labor, parts and materials needed to put the vehicle back to pre-accident condition.
“The objective of repair planning is to accomplish this before beginning the repair, not after,” said Ronak. “The goal is to eliminate any production delays from missed parts and labor procedures by identifying them up front.”
Over the years, Ronak has worked closely with body shops to assess the effectiveness of their repair planning process. He recently spoke to a group of body shops in Honolulu, Hawaii, about the recommended steps to effectively create and implement a thorough repair plan.
“A shop will never complete the job efficiently unless repair planning is done correctly and an accurate work order (repair plan) is created before you start production,” he said.
The following is based on information shared by Ronak in the class, which was sponsored by Island Concepts, based in Honolulu.
Q: How would you describe repair planning?
Ronak: Repair planning is not just taking a car apart and trying to figure out all of the damage. It is fully documenting everything you are going to need done to that car to fix it 100 percent. In essence, it’s a roadmap to follow.
When a vehicle leaves the body shop, the assumption is that the vehicle has been repaired correctly. You don’t want to wait until the very end of the repair to make sure everything is done properly.
Typically, shops began repair planning to reduce delays and supplements, and improve cycle time, efficiency and customer service. Many shops continue to follow the process to some degree, but they aren’t always consistent or working to a defined standard that achieves predictable results.
Q: How has repair planning evolved over the years?
Ronak: Traditionally, shops would write an estimate and then follow up with supplements, which were sent to the insurer for reimbursement. Over time, shops began to routinely tear down the vehicle during the repair process. Eventually, they started tearing down vehicles and fully disassembling them prior to the repair. This led to what we consider ‘informal repair planning’ where the shop focuses on a complete initial estimate or repair plan. Some shops now engage in formal repair planning where everything is fully documented. Highly-evolved shops will audit the repair planning process as a step toward continuous improvement. This involves measuring the accuracy of the repair plan, tracking supplements and creating action plans to ensure future repair plans correct for these errors or omissions, achieving a continuous improvement loop.
Q: What is the purpose of an estimate and how does it fit in with repair planning?
Ronak: These days, writing estimates is still the norm in the industry. Ironically, an estimate is a guess—a rough approximation of what we think the job is. It helps a shop decide if it is going to be working on a small, medium or large job. It also allows an insurance company to determine how much it should put away in reserves.
It’s important to keep in mind that until you can perform electronic scan diagnostics on the vehicle, you can’t ascertain what it is going to cost to fix that car.
Even when shops write a repair plan, many still find value in writing a preliminary estimate. Not only does it help demonstrate to the customer that your shop is detailed and going to do a thorough job on the repair, but it can also help identify the critical or difficult-to-source parts needed, allow you to compare and quantify different repair strategies, meet the insurance requirements, assist with scheduling and eliminate bottlenecks.
However, while an estimate provides an approximate cost of the repair, a repair plan will ensure you determine the exact cost as an accurate repair plan is the definitive guide to the precise process you will follow to restore the vehicle to pre-loss functionality.
Q: What should shops be aware of during the repair planning process?
Ronak: There are three primary areas of focus in the repair planning process. First is compliance with the manufacturer recommended and required procedures, while considering insurer mandates if you are in a contractual agreement. We are finding that the manufacturers’ guidelines are mandatory and coming on extremely quickly. Shops must read and follow OE procedures every time. The materials used in vehicles today are very different than they were 20 years ago. There are very specific ways to repair a vehicle, and in some cases, extremely specific ways to disassemble a vehicle as well. It is important to know this prior to beginning any work on the vehicle. Most importantly, deviating from these procedures places shops in the position of assuming some avoidable repair-related liability for the repair. It’s important to remember that liability differs from a warranty. A warranty is a limited scope that guarantees you’ll redo the work. It’s very different from liability in that you assume all of the consequences of how that car is repaired. You’re liable for life and several recent court verdicts have validated that as a legitimate concern.
Another part of the repair planning process includes administration. To ensure you are doing it effectively, you absolutely have to be auditing. This includes auditing for accuracy and complying with the insurer and manufacturer guidelines. I advise shops to set up a good system for uploading information to the management system and insurer. It’s also important to obtain approvals, communicate, and order all necessary parts one time.
The third part of the planning process is disassembly. Shops should identify all damaged parts up front, including clips and fasteners, as well as all structural and suspension labor operations, and body and refinish labor operations. They should also be aware of all mechanical, sublet and non-included operations and the specific repair methodology.
Q: What is important to know in regard to a complete repair plan?
Ronak: There are four key factors to consider: accuracy, efficiency, speed and value.
Accuracy is key in repair planning. To ensure accuracy, there must be a reduction in supplements, downstream work stoppage and parts orders.
In terms of efficiency, a repair planner needs to stay focused with minimal distractions, pay close attention to over- and under-scheduling and have a standardized process in place.
Repair planning can impact the speed of the overall process. Although a repair planner should ideally work at an aggressive pace, remember that the desired end result is quality over quantity. Rather than massive throughput, we’re interested in accurate throughput.
Finally, repair planning can add value to the downstream operations. This enables continuous flow, reduces stoppage, and allows a facility to produce more billable hours. It can also improve cycle time and CSI.
Q: What is the best way to get started with repair planning?
Ronak: To set up a good repair planning process, it’s critical that a shop has a good parts process in place. In the average shop, parts are about 42 percent of sales. Therefore, in a shop that brings in $100,000, that represents $42,000 in sales. If the average shop makes 25 percent, that’s $10,500 profit, leaving $31,500 per $100,000 in sales. Ordering parts is often a big, complicated and poorly-managed process in a body shop and yet is the single largest expense. If you address the inefficiencies you have with your parts process, many of the challenges you have in production and the business will go away.
Once you create a process, it’s critical to find someone in the shop who can maintain it.
Q: How does repair planning “feed” production?
Ronak: Think about the concept of having two separate businesses. Shop “A” is repair planning, also referred to as build-down, that feeds Shop “B,” which is production. The purpose of repair planning is to reduce the variability of typical collision work. Shop A accomplishes this by transforming a damaged vehicle into a predictable state of work for Shop B.
One of the challenges shop leaders often have when they implement repair planning is that the structure of the business isn’t necessarily capable of supporting repair planning on an ongoing basis. As a result, the moment the process breaks down, they default to their previously used method.
Q: How can I ensure my shop is successful?
Ronak: One of the single biggest things shops need to do is make sure they have a complete repair order. When a damaged vehicle is completely dissembled and all of the operations are identified, the parts department is able to order and verify the parts prior to the vehicle entering Shop B.
The goal is to understand that repair planning feeds production. By having that complete repair order in Shop A, it almost guarantees that that car is going to flow right through Shop B.
Q: What is the importance of measuring effectiveness?
Ronak: Shop leaders and owners often don’t measure their repair planning efforts, but it’s very important to do so. All successful organizations measure effectiveness in critical operations or activities. It’s all about scheduling and understanding the capacity of each stage of production. The only way you can do that is understanding what is needed at the beginning of the repair.
Many shops find that estimators and repair planners are writing supplements, sometimes daily. That’s a defect in the repair planning process. If this is happening, I recommend investigating why those defects occur and then creating strategies to minimize them as much as possible.
Another important component is auditing. As I mentioned previously, to really be doing repair planning, you absolutely must be auditing the process to be successful in the long-term. The key to repair process speed and efficiency is to slow the process up front to ensure a free-flowing and disruption-free production event that will not deviate from the accurate initial repair plan.
Part one in a two-part series.
Stacey Phillips Ronak