What Exceptional Collision Managers do Daily to lead their team to victory:

Transcription

1 What Exceptional Collision Managers do Daily to lead their team to victory: Gary Edwards Edwards & Associates Consulting February 12 th 2015 Exciting Industry: Every morning, Approximately 8% of all drivers will find something to HIT! That makes Collision Business Recession Proof Collision Center s Profits What Exceptional Managers Do Establish Performance Standards & Guides Financial Objectives Measuring Department Assets Managers Work Plan Motivating & Coaching Employees 1

2 Performance Standards: Guides: Current Performance: 2

3 Lets begin by talking about a few key performance indicators of your Department Collision s Inventory of Goods to Sell is Time The Collision Manager faces unique challenges not typically faced by Managers of other businesses. The Collision Shop s inventory consists only of time. Gross Profit on Labor Sales Guide = 65% Formula: Labor Sales - Cost of Labor Sales = Gross Profit Dollars Gross Profit Dollars Labor Sales Dollars = Gross Profit Percentage 3

4 Gross Profit on Parts Sales Guide = 38% Formula: Parts Sales Cost of Parts Sales = Gross Profit Dollars Gross Profit Dollars Parts Sales Dollars = Gross Profit Percentage Gross Profit on Materials Sales Guide = 45% Formula: Materials Sales Cost of Materials Sales = Gross Profit Dollars Gross Profit Dollars Materials Sales Dollars = Gross Profit Percentage Net Profit on Material Sales Guide = 30% Formula: Materials Gross Profit Dollars ($) Shop Supplies Dollars ($) = True Materials Cost True Materials Cost Material Sales = Net Profit % on Materials 4

5 Gross Profit on Sublet Sales Guide = 10% Formula: Sublet Sales Cost of Sublet Sales = Gross Profit Dollars Gross Profit Dollars Sublet Sales Dollars = Gross Profit Percentage Gross Profit on Total Department Sales Guide = 50% Formula: Total Department Sales Cost of Total Department Sales = Gross Profit Dollars Gross Profit Dollars Total Sales Dollars = Gross Profit Percentage The Key to achieving a high departmental gross profit is to manage the individual items that contribute to total departmental gross profit: Labor Gross Parts Gross Materials Gross Sublet Gross 5

6 Technician Proficiency = 170% Formula: Tech FRH Clock Hours = Proficiency Example: 13.8 FRH 8 Clock = 170% Proficiency Estimate Closing Ratio (70% Walk In / 90% DRP) Financial Objectives: What is my break even number? How many hours to reach this number? More Importantly What do I need to produce to Net 20%? 6

7 We Need to know: The Departments Current Expenses & Sales Averages How do we determine? Our Current Expenses Total Personnel Expense YTD $140,475 Total Semi Fixed Expense YTD $139,756 Total Fixed Expense YTD $65,206 Total Expenses YTD $345,437 7

8 Our Labor Sales Customer Paint & Body Labor $481,733 Customer Paint & Body Labor $298,674 Warranty Body Labor $8,711 Warranty Body Labor Gross $6,914 Internal Body Labor $12,688 Internal Body Gross $7,950 Data to calculate Expenses Total $345,437 / 12 Mo. = $28,786 Monthly Annual Labor Sales $503,132 / 12 Mo. = $41,928 Monthly Gross Profit % # Of Technicians ELR Technician Proficiency 8

9 Measuring Department Assets We spoke earlier about time and our block of ice analogy, lets now talk about your facility potential: Formula: Bays X Hours Open X Avg. Days Monthly Example Potential: 15 Bays X 8 HRS X 21 Days = 2520 (100%) 15 Bays X 12 HRS X 21Days = 3780 (150%) 15 Bays X 13.6 HRS X 21 Days = 4284 (170%) 9

10 Successful managers measure daily/weekly Estimate Tracking Log The Estimator Performance Summary form provides additional valuable information that helps determine the average values of estimates and closing percentages. 10

11 Estimate Performance Summary The Estimator s Performance should be measured daily/weekly to ensure the Manager knows if additional training is needed. A performance summary spreadsheet will allow the Manager to know how well each Estimator is doing as well as his/her department is doing at capturing business and converting to jobs Use a Daily Operating Control (DOC) to Monitor Assets A Daily Operating Control (DOC) is the best way a Collision Manager can monitor how the Collision Department s performance is tracking against the objectives that he or she has set. 11

12 There are four common financial tracking techniques which, when used together, provide the Collision Manager with an effective tracking system: 1. Use a Daily Operating Control (DOC). 2. Regularly review of the Collision Department s financial statement. 3. Focus on controllable expenses. 4. Use trending reports. Managers Work Plan Successful Managers Plan their days and work their plans: Failing to plan is planning to FAIL DAILY Make sure a vehicle is in every technicians stall prior to the technicians showing up for work Make sure that Receptionist, Estimators, and other support staff are in on time and ready to begin greeting customers Make sure Parts has pre-pulled items needed on repairs in the shop and that these have been delivered to the technicians Spend the first hour in the estimators offices and in the shop making sure that everyone is at work, they have the right attitude, and that the work is flowing smoothly Review completed repair orders and job jackets from yesterday check for: All areas of the job jacket are filled out Everything is in the jacket in proper order The repair order and the estimate match The Quality Control Check sheet is filled out and the customer signed that they received a copy Are all monies due collected, if not, is the guarantee to pay signed Pull a copy of the Financial DOC report and review it to ensure you are on track with your forecast 12

13 WEEKLY Post Technician Performance results Post Service Estimators Performance results Personally check on any jobs that are over three days old Prepare technicians and consultants pay reports and submit to the office Check with the other managers to see if there are any issues they need you to address Review receivables to ensure timely payments Pull the job jackets on any over age receivables and determine the reason why payment has not been received. Review CSI follow up survey reports and discuss any out of line conditions with the necessary person(s). Set aside time to council with employees whose performance is sub-par Hold a meeting with your support staff, be sure to cover The shops performance so far this month Recognize superior individual performance Hold a brief training session on 1 item, for instance practice doing a vehicle walk around prior to writing the estimate, or practice doing a friendly meeting and greeting Review the Open Repair Order Report for tickets open more than five days and have your estimators show you a good reason why any ticket has been open for more than one week MONTHLY Prepare your own Work In Progress Report and submit to the office. Perform a Materials Inventory and submit it to the office Review the financial statement Look for trends Check gross margins to expectations Compare sales to forecast Compare expenses to forecast Prepare an action plan for out of line items Pull a copy of the Financial DOC report and review it to ensure you are on track with your forecast Hold a shop meeting with all Collision department employees Motivating & Coaching Employees In today s world the Collision Managers have become a Coach for the body shop; it is important to the success of your department that YOU clearly communicate expectations to the staff. 13

14 Effective Managers: Develop a process to get work through their facility as efficient as possible teach this process to everyone Process Management is the Key to Success! Examples: Examples: 14

15 How & Why.. Fewer missed or wrong parts + Fewer supplements = Less down time & more efficiency Reduced Cycle Times! Effective Managers: (also) Define a vision of the future Set goals for all employees to achieve Create a customer focus that is central to every task Establish clear and visible values Set and maintain high expectations Clear Objectives are Defined for Each Position Each job position has clearly defined objectives, duties and responsibilities Each employee knows what their individual performance objectives are: - Daily - Weekly - Monthly - Annually 15

16 Communicate Goals, Objectives, and Forecasts to Employees To get employees to achieve the desired goals, objectives, and forecasts, the Collision Manager must keep them fully informed. One way is to establish a Performance Tracking Board in the shop to remind employees where the department is, compared to where it needs to be. 16

17 Effective Managers (Like Successful Coaches) Know They Cannot Play the Game Effective managers utilize coaching and counseling techniques to train and develop individuals They do not attempt to lead by example, or by demonstrating repeatedly that they (the manager) are the greatest Instead, they spend their time coaching, planning, reviewing, and counseling employees on proven methods, to perform their jobs better Questions? Gary Edwards Edwards & Associates Consulting Corporate Training Center For free Newsletter & Tools visit: 17