Fixed Operations
Bodyshop Management Control
By Dave Dunn
Keeping track of the profit picture in the bodyshop can be a challenge. Dealers use a variety of criteria to "measure" bodyshop performance. All too often, dealers resign themselves to the cliché "out of sight out of mind." Hence, you see most dealership bodyshops in an out of the way location. Dealers who are genuinely proud of their bodyshops promote them as a source of pride within their organizations and to the public.
Dealers who are proud of their bodyshop's financial and service performance all have one thing in common. They "know the score."
Know The Score
If there is one passion I have that I share with the dealers who are winning, it is keeping score. Notice; I said keeping score, not measuring. Often, dealers confuse measurement with scorekeeping. According to Charles Coonradt in his book "Scorekeeping for Success," measurement is typically viewed from a negative perspective whereas scorekeeping is fun and positive. In other words people do not like to be "measured," but most of us enjoy "keeping score."
One common problem that I see is this: The dealer attends a 20 group meeting and compares notes with fellow dealers. He then returns home and drops a bunch of comparisons and statistics on the bodyshop manager in hopes of motivating him. That, my friend, is measurement. Normally the dealer points out deficiencies in his bodyshop's performance from a financial comparative perspective. Not very motivational.
Successful dealers have learned that people respond much better to scorekeeping. A dealer who believes in scorekeeping sits down with his bodyshop manager and determines what is "good." A question you may ask now is; Do my people even know what "good" is? Next, develop a system for keeping score relevant to "good" on an up-to-the-minute basis. This scoreboard should be accessible to all employees. They, above everyone else, need to know what "good" is and whether they are performing above or below the standard of "good."
An example of information that can be tracked and shared would be production data.
- Cars out Daily and MTD. (literally the number of units repaired and out the door)
- Dollars of production out Daily and MTD. (the dollar value of repair orders completed)
- Hours out Daily and MTD. (the labor hours generated on closed repair orders)
- Gross Profit Daily and MTD. (the profit after direct cost on closed repair orders)
- Work Available.(the sum total in dollars and hours of backlog, cars yet to be repaired)
This information can be easily logged from closed repair orders. It can then be posted on a visible scoreboard. An erasable 3ft. x 2ft. board works well.
As the staff tracks production they are aware on a daily basis of what "good" is. (The Goal) They are also aware at what breakeven is for the month. At the point that gross profit equals breakeven they are aware of the fact that they have cracked the nut or began to make net profit. If your bodyshop management staff knew that overhead was $40,000 for the month and they knew that on production day 18 they had produced $41,000 of gross profit can you see how excited they could become? Everybody likes to know how they are doing while they are still in the game. It is no fun to get a report 10 days after the game is over telling you that you lost. Share the score while the game is going on. Too many dealers keep information proprietary. People need and deserve to know how they are doing. We recommend this scoreboard system for every bodyshop, even the ones which have computers.
Do you know the score? Does your bodyshop manager and his staff know the score? Every dealer I have ever dealt with who is happy with his bodyshop's performance can answer YES!
Dave Dunn is the most respected consultant in the field of collision repair management. Dave owns and operates Masters School of Autobody Management in Santa Barbara California. Dave also owns Dave's Auto Body in Galesburg Illinois. ddunn@dealeronline.com
