Becoming Tactically Lean
By Steven J. Feltovich, Manager of Business Consulting Services
The term ‘Tactically Lean’ just sounds good, doesn’t it? Who doesn’t want to operate their business, their department or day-to-day work faster, easier and more efficiently?
The truth is that most organizations, large and small, follow business/operational processes or workflows that are disorganized, disconnected and chaotic. Critical tasks are skipped, overlooked or delayed. The coordination and collaboration between teams or people is disjointed. Add this to the fact that people generally accept the operational shortcomings of the status quo, because they have become habit or simply “the way we’ve always done it.”
The reality is that processes need to be continually tweaked in order to evolve with business requirements. Consider why the processes you originally implemented do not work well today: the world has changed, your business has changed, the tools and technology your people use have changed. In fact, when you think about it, just about everything has changed, except the process itself.
You can’t help but wonder, “Isn’t there a better way to conduct business?”
The Current State of Collision Repair
For the past thirty years, advancements in the collision repair industry have primarily evolved from innovative tools and technology. But the game has not really changed that much in most cases; we still bring in most of the work on Mondays and scramble over the speed bumps in order to deliver completed vehicles by Friday. And then we carry over a few vehicles to the following week that did not get finished, while we pile on another batch of customers’ cars that were scheduled – not to mention any additional drop offs or tow-ins that show up. None of this weekly chaos has really challenged enough shops to look at the deficient processes and systems in these key business areas: scheduling, estimating, parts procurement, body, paint and final assembly. These are not connected by very well-defined processes that are executed daily. Simply put:
“We have become very comfortable with dysfunctional business systems.”
The average repair still consists of 16 to 18 labor hours, 9 to 11 days of car rental, and the average technician touch time on the job per day is 2.5 hours. These averages represent the same numbers that have been posted for the industry for well over fifteen years. This clearly indicates that there is tremendous waste in collision repair processes, if it takes more than twice as long to get a customer’s vehicle repaired and back to them as it took the technician to actually do the work. No wonder customers and insurers question all of the time in between the vehicle drop off date and the actual delivery/completion date. The collision repair industry is spending its energy in the wrong places and continually avoiding to address broken processes.
The Starting Point
It all begins when more vehicles are scheduled than can actually be completed/delivered on the promised date. This creates uneven work flow and imbalance in the workshop that stresses the employees. Hence, the work production pace is slower than it could optimally be, because all the vehicles are loaded in the workshop in large batches. The problem is compounded by having technicians producing wasted labor hours on vehicles that never get completed and delivered on time. Why is that? Because the labor they produced is just sitting in inventory queues: in body (waiting for a supplement or parts correction), in paint (because there are too many vehicles in paint), in final assembly (too many coming back from paint all at once to reassemble).
Controlled Scheduling –> Even Workflow
We must begin to understand that it is not about getting more cars in, but rather all about getting more cars out. The shop must be scheduling to its current output capacity: the number of cars brought in daily should equal the number of cars delivered daily. This is a basic math problem, and it can be solved by your shop’s historical data on the cars you already average per day, per week, per month. Yes, you will have to build in the time for the shop’s average tow-ins and drop offs, but remember you have the data on these averages to get it leveled out as quickly as possible. Once this is implemented, you will be able to modify the scheduling process as new learning takes place ─ scheduling is a critical component to being ‘tactically lean.’ As the saying goes, “The only constant is change.” Your new process is not going to be perfect out of the gate. And as we learned earlier, the world around you is constantly changing, so revisit your processes again and again and again. When you get the scheduling area right, many of the problems downstream disappear and the work will be produced in a much less chaotic manner with less stress on all of the employees as well.
“The right processes deliver the right results!”
Regardless of size or complexity of the business, the basic lean principles apply. If you have a process or workflow from which you want to gain control, visibility and efficiency, consider applying these Six Steps to Tactically Lean:
Drive Customer Value
Jeff Bezos – The Amazon Way, world’s #1 online retailer with the highest customer rating – “obsess over the customer.” “The best customer service means the customer doesn’t need to call you,” Bezos says, noting the most common complaint from Amazon shoppers is, “Where’s my stuff?” To that end, Amazon measures success in customer contacts per units sold. “We endeavor to drive that down every year, and the way we’re driving that down is by delivering [people’s] stuff.” Why am I using Amazon examples and business strategies for application to the collision repair industry? The answer is a question to you: who do you think has conditioned your customer in terms of a flawless, consistent and satisfying buying experience? Amazon has! Does your current business model protect you from becoming outdated, irrelevant and eventually obsolete?
Generally speaking, the person best positioned to improve a process is the one actually doing the work. So get out there and talk to your people who are actually doing the work. In addition to gathering their feedback and new ideas, this is also a great way to find out if individual people can be doing more–or perhaps different, more valuable things–than they are currently doing. Let your team participate in helping you build a better business model.
Implement New Processes
A robust process eliminates problems upstream before they occur. The right processes deliver the right results! Amazon has identified the 3 things customers hate: defects, delays, and out-of-stock items. Amazon has provided you with the answers to the customer satisfaction test; the criteria is not any different for the collision repair customer, except in our minds. Amazon raised the bar for an extraordinary customer experience in the 21st century. Today’s customers are armed with knowledge and are therefore empowered and impatient. Traditional shop processes are antiquated, painfully slow and will never be capable of driving the value that today’s customers are demanding. Every business today is under the customer’s microscope. Therefore businesses are being tasked with building in quality processes from end-to-end, to ensure that defects do not go down the line and ultimately get passed on to the customer.
Did you know that many manufacturers (Toyota – Toyota Production System, TPS) literally count the physical steps that their production workers take between job stations? They know that eliminating a few simple feet of walking can have a significant impact on productivity. Apply the same scrutiny to your own shop’s process or workflow. What step or steps in the process can be removed, shortened or improved? Look for where the errors are occurring that produce waste or require rework.
As we learned earlier, the world around us is constantly changing, so revisit your process again and again and again. We recommend that the entire team or team leaders conduct short meetings and review the processes and workflows (what’s working and what is not). How often? Of course, the answer depends on many variables. However, as a general rule, we recommend reviewing business-critical workflows daily in order to create an environment for continuous improvement.
Measure & Keep Score
We prefer to say “keeping score.” The point is that you want to be able to tell whether something is working or not. All the analysis and estimating in the world cannot replace real-world testing. So get your new-and-improved process implemented and start keeping score. Are things taking less time or more to get done? Is the quality of the work being performed improving? Be patient. No one really knows the outcome of the game based on the score in the first minute. Let your new process run for enough time in order for you to make decisive decisions and changes with confidence.
The Journey to Becoming Tactically Lean
The first step is to be honest with yourself and recognize that you have a business problem. Then you will need to size up your business based on the way it is truly operating: your current processes are costing money, wasting time and resources, and there must be a better way of doing things. Unfortunately, this is as far as most shops get, and they do not move on to the next stage. They decided to solve their problem, but then stopped short of taking any action. As a result, the process does not change, and their results do not change. Become a change agent! Don’t just talk about it, get into action. Read articles and books; we always recommend starting with The Toyota Way book or audio. Attend seminars and training programs on the subject of TPS/Lean. Consider hiring a creditable lean consultant to assist you on getting your ‘Tactically Lean Journey’ up and running on the road to success.
Steven J. Feltovich is the Manager of Business Consulting Services, Sherwin-Williams Automotive Finishes Corporation. He has been a consultant to executives in the automotive and insurance industry in North America, Central America, and the U.K. for over twenty years.