All of us in this industry are aware of the buzzwords surrounding the metrics which all shops are measured by — CSI, severity, close ratio and cycle time, to name a few. Cycle time is one of those metrics that we all know is important, but do we really know why, or understand the implications that improving cycle time bring? My guess is no, based on my own experiences in dealing with the metric.
Years ago, when the industry first started to measure cycle time, it was considered a very important measurable that set apart great shops from average ones. It remains significant, but over the years the industry has fluctuated about where it should land on the importance scale. Some years, it’s at the top of the scale, and others it’s at the bottom. In fact, I felt cycle time was so important to the industry, that I spent a great deal of effort developing a 24-hour repair process that actually works. I tried presenting the process to several insurance companies, thinking that cycle time was so important, I would have DRPs clamoring for it. It didn't happen. No one really seemed to care, so I offer the process to my customers that need to have their repairs done super-fast. I have been able to help quite a few customers save on their rental expenses with the program.
It doesn't mean cycle time isn't important, it means it was just less important, at that point in time, than other measurables. Remember this, the faster you can move a vehicle through the shop, the faster you can get paid for the repair, and the faster you can bring in another job.
Sounds pretty important to me.
Some shops know their cycle time numbers and others do not. In fact, you can measure your cycle time as a shop, and an insurance partner can measure it, and come up with different numbers. How can that be if you are using the same data?
The way the data is used is the key.
I have always believed that you should measure your performance, document it and use those numbers to help you get better. You should do this in every measurable category, not just cycle time. What numbers do you use as a basis to improve? Whose numbers are the most accurate when you look at the way you as a shop owner measure it, or as an insurance partner does?
Let’s look at the idea of cycle time in simplistic, common sense terms. So many different things can affect it. Generally, when a shop has a lower-than-average cycle time, the perception is that shop is better performing than another shop with higher cycle times. This may not be the case. What if the shop with the lower cycle times did lots of smaller, bumper jobs that take less time to do, and the “poorer” performing shop did a large volume of train wrecks? Wouldn't it make sense that the shop doing the lighter work would have better cycle times, even if they did the same number of repairs?
No one can control severity. Whatever comes in your shop comes in. Severity greatly affects cycle time; therefore, it must be taken into account when calculating your numbers. Generally, most measurements are lump sum, including all the different sized jobs as an average. This works, but doesn't give you the numbers you need to improve. Unfortunately, the lump sum measurement is what most insurance companies use when gauging your performance. Again, these numbers can vary greatly depending on the manufacturer of the vehicle you are working on. Manufacturers with great parts distribution systems, like Toyota, will net far better cycle times than Subaru, who have a less efficient parts distribution system. So, you need to measure your cycle times based on manufactures as well.
Another difference is the points you are using as reference for your measurements — keys to keys, parts arrived to repairs completed, repair start to repair completed? What metrics make the most sense? Each one is important, but each one carries a different level of importance to different people. Think about it like this: You’re in a fast-food drive-thru and you’re hungry. Do you care if your experience is measured at each station in the process, or do you just care how long the entire process takes? Obviously, as a consumer, you really only care how long it takes once you pull in to the time you begin eating your purchase. Management cares about each step of the process so that they can refine each one to help speed up the overall experience. They measure them all and try to improve on each step in the process individually. The same holds true in the collision industry. If you can measure your cycle time using several different starting and ending points, you can look at which areas need the most help and focus on improving them. Herein lies another problem. How long should each of these individual measurements be? What is the industry standard? Is there an industry standard? There may be, but you can also use you own numbers as a basis to track improvement. Measure yourself and work to improve upon that.
We have established that cycle time is affected by many factors out of your control. What can you do to improve cycle time within your control?
- Cycle time starts with the most accurate estimate you can write. I have seen many estimators that take a quick look at a vehicle, write a skin sheet and move on. This results in missed damage, parts delays, supplemental delays and on and on. Take as much time as you need up front to really write a blueprint for repair, rather than an estimate. Disassemble the vehicle, take measurements of damaged structural components, and look closely at all the damaged components to see what can be repaired and what need to be replaced. Source used parts accurately; don't just guess at them. Verify that they exist at the yard and can be purchased. This goes for insurance company writers as well! I have seen countless estimates with used parts on them that don't exist and never have. The price is merely provided as a reference to get the estimate written. This practice hurts the entire industry and slows down cycle time tremendously.Even when writing an estimate for a cash customer, it is important to look at the vehicle carefully when they come into your shop looking for an estimate. I know many of us deal with customers that push you to hurry when they have their car looked at, but it’s always best to explain why you need to take a few minutes up front to write an accurate appraisal, as this will save time later on.
- Schedule your work as wisely as possible. Since all of us have experienced a drop off in business over the past few years, the natural tendency in any shop is to grab the job and worry about how you are going to finish it later. This practice isn't smart business, and isn't necessary. When a customer comes to you for an estimate, they are looking for resolution to a problem. If they leave the vehicle that day, or they schedule the repairs for a day when you have specified, you have achieved the same result — you have offered a resolution to their problem, with one difference. By scheduling the repairs when you have the parts and the manpower to complete the job with the maximum efficiency, you can guarantee better cycle times. Since you have written a complete estimate, ordered the correct parts and checked them before the vehicle arrives for repairs, the process will naturally go much more smoothly.
- Check your parts. This sounds almost elementary, but is an often overlooked step in the repair process. The parts may be correct, but may be damaged, so I suggest opening every box to verify the part is correct and undamaged on every delivery. The parts drivers might not like it, but I would rather have a driver mad at me than a customer or insurance partner. This takes discipline and organization, but is an important element in speeding up the repair process.
- Clean, declutter and organize. All of us have a great tech in our shop, one that can do anything and is better than all your other guys. Look at your techs’ toolboxes tomorrow. Is your best tech the messiest one in your shop, or is he or she the most organized? My guess is he or she is the most organized and that is part of the reason he or she is the best. The same holds true for your shop overall. A cluttered, disorganized shop is not going to perform, in any measurement, as well as a highly organized and clean one.
- Efficiently distribute your repair work. This is sometimes difficult, since all of us have techs with different levels of ability. It is possible, however, to make sure the right tech gets the right mix of repair work. This goes back to scheduling as well. If you only have one or two heavy hitters in the shop, don't schedule five heavy repairs for one week. You will fail before you ever get started. Also take into account your equipment and facility restrictions. If you only have one frame rack, how are you going to complete multiple structural jobs all at one time? Production management is key here. I try every day to give instruction to my staff regarding in what order jobs need to be done. I produce a paint list and a delivery list, and everyone gets a copy. We communicate clearly what needs to be done and when in production meetings, and elicit feedback from the techs regarding those projections. Obviously, your work mix will change daily, especially if you get tow ins and unexpected drop offs. Do the best you can to work these jobs into your schedule, following the accurate estimate guidelines, parts check ins, etc.
The real benefit to measuring and improving your cycle time is to you and your shop’s customers. Don’t do it because an insurance company wants you too. Do it because it will make you better as a collision repairer. You will have more satisfied customers and more repeat and referral business as a result.