By Tony Netherly
We have talked about having SOPs (Standard Operating Procedures) for collision shops for several years. For every shop that has taken advantage of their paint supplier’s value add programs, in an effort to be more profitable and lean, developing SOPs for the back of the shop has been pretty standard. It is also common for the front office to develop SOPs to satisfy their DRP relationships. While neither one of these is a bad thing and more often than not a good thing, would it be even wiser to develop SOPs that are solely for the purpose of making us more profitable?
This past week I spent three days observing two shops setting up new management software. I noticed that there are a few areas that need SOPs in order to keep your shop profitable and they all start in the front of the business. I want to spend a few minutes looking at five areas in particular:
Customer Contact
Most people select a repair facility within 24 hours of reporting their claim. Insurers want to settle the claim as quickly as possible for two reasons. They understand that good cycle time greatly affects customer satisfaction and cars that are delivered on time go away faster. As a manager it will increase your car count and CSI if you develop good customer contact procedures. Here are three things you definitely want to consider; calling back next day if you don’t capture the job when they come in the first time, how they want to be contacted – phone, text or email, and last of all how often do they want to be contacted.
Estimating
Estimates set the tone for the entire process and should be thought of as a sales opportunity instead of writing a repair order. While we may depend on software to write our estimate it is only as good as our understanding of the rules it operates by. You must know the procedure pages and what is included and not included to use the software efficiently. Every estimate should be written according to SOPs. For example if every car is has interior covering, prewash and battery disconnect as soon as they are put in process, that may be the first three lines of every estimate. If you always use certain products like panel bond adhesive and sound deadening every time you do a door skin these may be items added every time. Every shop has some things they concede to insurers for one reason or another but I find most of the time they just forget or get in a hurry and fail to get it on the estimate. Some simple SOPs prevent these costly mistakes.
Parts
Cars delivered late have been blamed on the parts guy more than anything else in the collision industry. While it is a troubling area in our industry, many of the problems we have are self inflicted. When a wrong or damaged part is received and not caught right away the 10 to 20 steps involved in getting a part turns into 30 to 40 steps. Here are three things to look at when developing SOPs for your parts process; when and how do you initially order your parts, what is the process for checking them in when they are delivered, and how do you handle returns? It is crucial to have hard SOPs in this department if you want to deliver cars on time. I am amazed how many dollars worth of parts I find lying around most collision shops. In many situations it may be all of the shops profit for the week or month.
Vehicle Tracking
When you are a small shop and only have a few cars in production it may not be a problem to keep up with them, but when you have a few total loss vehicles, a few towed in that you do not have a claim on and a few that have been sublet out, it becomes a whole new ball game. Throw in a few wrong parts, supplement issues and a technician not showing up; all of a sudden production becomes a real problem. Keeping track of the vehicles and keeping everyone informed especially the customer is an even bigger challenge. Having SOPs for each of these will make it much more manageable.
Delivery
The car is finally finished and the customer is called. How many times have you thought today is the day we start hitting sales goals for the month and find you missed some damage or the customer has already left to go out of town for the weekend? When it comes to delivery almost hitting the promise date is not good enough. Make sure you have SOPs that include inspecting the car, finalizing the bill and calling the customer. It is a shame to blow the whole job at the very end.
There are a ton of things you may want to develop SOPs for, but I think these five may be the most important. Does SOP in your shop mean Standard Operating Procedures or does it mean Squandering Your Profit? •
Tony has worked in the collision industry for over 32 years. Starting as a technician and working up to manager as well as spending time as an estimator and vocational instructor have given Tony a wide-angled look at the industry.
Tony is also Tennessee’s busiest I-CAR Instructor and the Executive Director for the Tennessee Collision Repair Association. You can contact Tony at 731-394-5628 or E-mail Tony at tony.nethery@yahoo.com
