Tracking productivity in an auto body shop isn't as simple as calculating how many widgets have been sold each day, week or month. Unlike a traditional retail environment where salespeople move merchandise out the door, a body shop has only intangible inventory--damaged cars in need of repair and the time-intensive labor required to make it happen. In this environment, it's productivity, not sales of parts, that dictates return on investment (ROI). The more cars repaired, the better your ROI.
Motivate your employees and keep them happy. Richard Ward, owner of Russ Ward Auto Body in Anaheim, Calif., swears by this simple yet effective technique to keep his body shop humming. "The reality of it is that you need to keep your employees motivated," says Ward. "I have a veteran staff that has been here for years. We don't change over employees and always treat them well. We do all we can to give them as much responsibility as possible."
Customers pick up on this positive vibe and are more likely to be forgiving when turnaround time is less than optimal. "As long as we are putting a good product out, we will deal with the time frame," adds Ward. "The ideal job is $2,200 with a three- to five-day turnaround. That is the most profitable."
Let the market drive your shop's size. Mike Day, manager for body shop business development and facility planning for Toyota Motor Sales USA, advises carefully considering the portion of the market that your shop can successfully serve. Otherwise, you may wind up with a shop that's either too big or too small -- and in either case, your shop's productivity will suffer.
If you're planning to open or expand an auto body shop, a multiple of $100 per person in the area's population will give you a rough estimate of the market's annual collision repair sales. This figure will help you decide how large or small your shop should be based on what portion of sales your shop can capture. However, be wary of overbuilding, even if your sales estimates are high. Even a midsize shop of 10,000 to 12,000 square feet can realistically bring in $2.5 million per year.
Use a production line system. Dave Finkelstein, owner of Golden State Collision Centers, which has four locations in the Sacramento, Calif., area, paid particular attention to his paint shop's production line when designing one location. Vehicles move from prep and mask right into one of two drive-through paint booths, streamlining the paint process and maximizing use of the shop's equipment.
Measure your stalls' efficiency. Leonard Lassak, owner of Thoroughbred Collision Center in Auburn, Wash., uses his stalls as barometers for his shop's productivity. For instance, if your shop is open 174 hours a month, each stall should be in use 174 hours that month, or as close to it as possible, for maximum efficiency. Anything less than that is a waste of space.
Also consider the ratio of stalls to paint prep stalls and booths. For every 10 body stalls, you need roughly two prep stalls and one booth. Otherwise, you'll have some areas that are not in use during the course of a day.
- "Tracking Productivity and Efficiency"; Wipfli CPAs and Consultants; June 2008.
- Richard Ward; Russ Ward Auto Body; Anaheim, Calif.
- SearchAutoParts: Effective Shop Layout Can Maximize Productivity, ROI
- Photo Credit Jupiterimages/Photos.com/Getty Images
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