Tackling the Parts Shortage

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Bill Davidge, Director, OEM Strategy & Equipment for CARSTAR. Photo courtesy of CARSTAR

A growing trend towards a repair-first strategy is changing the collision repair industry, by eliminating bottlenecks, improving efficiency, and reducing the environmental impact.

While parts and labour shortages continue to be an issue for many collision centres, an added problem is that there hasn’t been a significant change in strategy as it relates to repairing parts in the shop environment. That said, progress is being made. Insurers have and are continuing to change some of their policies regarding the repairability of certain parts (that previously were deemed non-repairable) and this a trend we hope to see continue.

Remaining challenges

There are still obstacles that remain, however. Firstly, these changes in policy aren’t yet enough to have a meaningful impact on shop operations and secondly, there are still few alternative options for collision centres that are experiencing parts delays. These have resulted in several problems, namely that even obtaining recycled or aftermarket parts in lieu of OEM components is proving difficult and that shops cannot provide their customers with alternatives for timely repairs on vehicles because there are no workarounds available. As a result, cycle times have been dramatically increasing which is negatively impacting the shop, the insurer and the customer. 

They do say, however, that necessity is the mother of invention. And there have been instances where shop owners and managers have gotten very creative in trying to deal with these issues. In some cases, we have seen owners purchase broken parts from alternative markets to pair with the existing part to create a complete, fixed part from various previously broken pieces. Additionally, many owners are looking at recyclers in the United States to purchase parts from. 

Focus on repairs, not pricing

Before the issue of parts shortages began to arise, collision shop owners would not think of this option due to the price of shipping. However, the focus has shifted to finding the part and fixing the car as soon as possible, rather than focusing heavily on pricing.

This approach has also required a shift in mindset. Today, many collision centres will analyze a part and determine whether it is possible to repair it, without having cost become a big factor. The store will then work with the customer and insurer to explain the situation and options, as well as have further discussions around costs versus waiting on a new part.

Further adding to the improving repairability situation is the growing popularity of processes such as glue pull repair (GPR) for body panels. While it has taken a little longer for the industry to adapt to this type of repair process, it has been catching on and there is also incredible room for continuously improving this technique.

More progressive

Additionally, OEMs are becoming more progressive as it relates to the environmental impact of ruling a part non-repairable. If a piece is considered as such, it tends to end up in a landfill, adding more waste, something that OEMs are increasingly looking to avoid. While this is a welcome trend, there has not been a huge benefit to collision centre profitability due to the overwhelming volume that stores have been seeing. Repairing parts, especially following new processes for a repair that previously wouldn’t have been done, is taking longer, causing the cycle time to increase.  

Furthermore, the increased cycle time that results from adopting new processes, makes it harder to turn cars and make more profit. Additionally, the pressures of KPIs, such as customer service scores, have been pushing facilities to continue to provide safe and efficient repairs, most often resulting in replacing parts. Rising labour costs continue to reduce profit associated with the repairing of panels in addition to the materials required to restore the panel to a “like new” condition prior to painting. 

Multiple increases

These materials include primer which is yet another aspect of the challenges our industry faces, with multiple price increases throughout the year being, for the most part, absorbed by repairers.  

Nevertheless, as time goes on, the benefits of a repair-first strategy are likely to increase. For insurers, one of the benefits of taking a repair-first strategy is the cost of the repair. Insurers can have some cost control, and in some cases when there is a parts availability concern, they are able to reduce rental car costs. Additionally, vendors can see benefits in equipment and material sales to complement new processes because of a repair-first strategy. Also, by investing in training shop technicians, particularly via hands-on workshops or programs, with vendors and collision repair networks taking an active role, the result can make a big difference in shop productivity, reputation and ultimately, profit.  

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Categories : Collision, Commercial
Tags : CARSTAR, Management


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