Tracking business performance is an integral part of running any successful collision shop. Yet knowing what to track specifically, isn’t always as easy as it seems.
When it comes to Key Performance Indicators (KPIs), being able to both monitor and extract the data is essential.
At Simplicity Car Care, Vice President Domenic Prochilo notes that breaking down KPI management into specific phases can go a long way to helping a shop not only establish benchmarks but build upon them moving forward.
He says that for shops that have recently joined a network, focusing on phase one of KPI management, including monitoring cycle times, touch times, average severity and total loss ratios is key.
When it comes to writing estimates, Prochilo notes that it’s critical to ensure that the number of estimates is weighed against the number of actual repair orders that come in. “There’s not going to be a lot of business if all we’re doing is writing estimates,” says Prochilo.
At Fix Network, Technical Trainer Stu Klein explains that if an insurance partner can provide scorecards, it can be an ideal foundation with which to track KPIs. He does note, however, that in most cases, dollars spent on the repair and the customer experience are often a top priority.
“If a shop is focusing on KPIs that directly affect [these aspects] they will be on the right track.”
Ted Williams, Director of Business Solutions at Sherwin-Williams, notes that often, while shops frequently measure cycle time and touch time another critical KPI, labour utilization, gets overlooked.
“The opportunity here is significant,” he says, “as most shops waste as much as 60% of their available labour.
As an industry, Williams says that often, far too much time is spent on traditional, individual metrics around margins, rather than the activities that have the greatest impact on those margins. “We also don’t connect these metrics to get the desired outcome,” he explains.
Therefore, to effectively utilize KPIs, focusing on labour utilization is critical, because it impacts other key metrics including cycle time, touch time, parts & materials, CSI and the shop’s overall profitability.
Besides monitoring current performance metrics, KPIs can also be a good yardstick with which to measure operational improvements over time; yet doing that effectively requires looking at how consistent specific KPIs are over a certain period.
“You need to look for consistency per quarter, both good and bad,” says Les Pawlowski, General Manager for Symach, in Canada. “Focus on KPIs that show consistent underperformance and learn how to improve them.”
He notes that focusing on KPIs quarterly allows the shop to account for as many variables as possible, including staff absence or holidays, parts delays, equipment purchases, consumables, building upgrades/maintenance, etc.
Pawlowski stresses, however, that every shop is different and how and what KPIs they should be measuring depends on their own specific set of metrics.
“A lot of it goes back to repair planning and process,” he says. “Does the shop have a productive workflow process? Are they performing repair planning?” He notes that if they are not, then the KPIs themselves simply aren’t of any significance.
“At this point, you’re basically throwing darts at a wall,” he says.
Ultimately, if the shop can consistently identify which areas of the business are underperforming on a quarterly and annual basis, it can then work towards a solution and gauge the effectiveness of that solution through KPI tracking and monitoring.
Osvaldo Bergaglio, President and Founder of Symach, also notes that shops have an opportunity to really measure repair efficiency by measuring the number of hours each technician spends repairing a panel.
If the metrics clearly show that one technician is generating higher revenue per panel repair than another, shop management can identify where the inefficiencies actually are and take steps to improve them.
Tools and technology
Today, the right tools and equipment are essential when it comes to tracking KPIs and also improving efficiency within the shop.
Sherwin-Williams’ Collision Core platform features a Scorecard that can be used to find opportunities at daily meetings or monthly improvement sessions.
“Everyone should have a scoreboard that clearly shows what they are responsible for on a daily or weekly basis. Scores should be posted consistently, so they know how they’re doing,” says Ted Williams.
By having each member of the team understand what their obligations are and how to fulfill them, the result is not only an effective way to measure performance, but also accountability.
- Painters knowing how many vehicles/hours are expected each day
- Body technicians knowing how many hours are expected
- Estimators are aware of how many repair plans they need to write
“Everybody needs goals,” says Williams. “The Collision Core Scorecard provides the KPIs; the data you need to know and the data your team needs to know.”