Predictive analytics can help save and sell.
A cost reduction pilot that Domenic Prochilo rolled out in just a few of his Simplicity Car Care shops has resulted in a 50 percent reduction in paint and material costs in less than six months.
That’s largely due to a number of different software tools included in the pilot project. Prochilo, Vice President of Operations at Simplicity Car Care, notes that the amount of sales in these shops has remained the same. “The results are coming in better than expected,” he says. “We were hoping for a 25 percent reduction, which was a lofty goal on its own.”
Technology can help not just with inventory management, but also communicating from the back of the shop to the front office. “Today’s collision centre management systems have bolt on apps that can be used with mobile, or added to an iPad or mobile device,” explains Prochilo. “Technicians can communicate additional findings, like a supplement, and communicate by voice or text along with pictures. Some shops are using this technology almost as a triage centre, when a vehicle comes in.”
Less time waiting
Technicians, estimators and parts managers get involved in the estimatics up front, as well as the paint department. “They can illustrate how many variants there may be without seeing the front office staff,” says Prochilo. “So, there’s better throughput because there’s more damage capture up front and less time spent waiting. It feeds that goal of, how many units can we get through a bake cycle in one day?”
Although paint and materials are on the lower end when it comes to cost and showing as a percentage of sales, that’s where shop owners focus since these show up regularly. “How much am I billing for paint and materials?” asks Prochilo. “All paint manufacturers offer an online ordering process, which can reduce human error.”
Technology now allows shops to have a certain number of SKU numbers. “Artificial Intelligence is able to determine how much inventory you would need for the next 30 days moving forward,” describes Prochilo. “Based on my ordering habits for the past 90 days, the system will note that I should order eight kits of clearcoat.”
The inventory software is so precise at picking up a shop’s behaviours and habits, some shops are ending the month with only five to 10 percent of the inventory still on the shelf.
According to Jeff Labanovich, General Manager at CARSTAR Canada, there’s going to be an explosive impact of software tools in the collision repair industry.
“We’ve been having conversations with some vendor partners in western Canada, where we deal with a lot of hail,” he says. “They’re deploying some technology that will get into dent counting. We already see that type of predictive modelling in the U.S.”
A predictive analytics company can take data and make calculations about a repair. “If I’m replacing a bumper headlight and a fender on a particular vehicle, predictive analytics will show the other parts that will get replaced 89 percent of the time as well,” explains Labanovich. “It’s great to have that x-ray vision.”
Shop efficiency tools are labour intensive, as they require accurate data capture that needs to be constantly ongoing. “It’s accurate date collection, time management,” says Labanovich. “These are more impactful in being able to fine tune the production of your shop.”
Insurance partners want a streamlined approach to information exchange. “When the tools are used properly and dates and comments are updated correctly, it cuts down on the phone calls and emails,” says Labanovich. “There has to be a commitment to doing it religiously with a very high degree of accuracy.”