Frederick, Colo.--The economies of scale are working in the favor of Gary Mahnke, who owns and operates four Mahnke Auto Body shops, part of the Fix Auto network, and an estimating center with his family in the Denver region.
The ability to share overhead expenses with multiple locations and draw business from dealerships and existing DRPs have played a part in the better-than-expected results for the Mahnkes’ new shop that opened in Frederick last December, Mahnke said.
“If I’d known what we were coming into, I wouldn’t have done it,” he admitted, pointing out that planning for the shop north of the metro area began more than two years ago. However, under the guidance of Gary and Judy Mahnke’s son, Sam Mahnke, the 13-employee shop is performing well.
“Sam is really good at dealership relations and pays attention to CSI—near 100 percent,” Mahnke said of his son, who also played a major role in the design of the 17,000-square-foot facility, which cost nearly $2 million to get up and running.
“We expected to be at $80,000 a month, but we’re now closing in on $150,000,” Mahnke said, adding that they broke even the second month.
The centralized corporate functions, such as accounting, human resources, and insurance relations, which total $30,000, are shared among the four shops, reducing the operating expenses for each location, Mahnke said.
“If you’re a single shop, it’s getting tougher and tougher,” he said, adding that the shops currently work with three DRPs and are seeking out more. “The insurance companies want to deal with someone on hundreds of claims, not dozens.” Many insurers seek out consolidators or networks, he said, which is why he joined the Fix Auto network in 2003.
A single point of contact for Fix Auto’s 11 Colorado facilities is Jim McMullen, business development manager for Fix Auto locally.
“I’ve always been insurance friendly,” Mahnke said, adding that they train their employees to do the same. “There’s no use in fighting insurers—just fix the cars.”
Key performance indicators (KPIs) are recorded in the Fix Auto network and frequently shared among the 140 shops, located in the mountain states and on the West Coast, Mahnke said.
“The intershop competition works,” he said. “Between the shops, we talk a lot.”
If a shop performs well in CSI, for example, its name in the report appears green--hence the moniker for the Fix report is “Going Green.”
“If you have bad CSI, you’ll be at the bottom,” Mahnke said, adding that the average CSI score for the Fix network is more than 95 percent.
“Profitability is the main benchmark,” he said. “You have to look at everything to get there. We’re always looking at ways to lean things out and cut costs.”
Sam Mahnke said he pays close attention daily to three benchmarks in each job—hours per day (HPD), dollars per day (DPD), and days in the shop (cycle time). Each job is displayed on a color-coded whiteboard in the shop’s conference room that’s updated daily, he said.
The minimum for HPD is five, $500 for DPD, and an average of four days for a complete repair, Mahnke said. “If you meet two of the three, minus longer cycle times on big jobs, you’re still OK.” Jobs colored green are good, red, not so good, and black, bad.
To keep cycle times low and efficiently move vehicles through the 15,000-square-foot production space quickly, Mahnke said he paid attention to the body, paint, and detail departments. Once cars enter the production area, they typically don’t exit until they’re complete, he said.
In the paint department, Mahnke said he installed a down-draft Garmat booth with no floor pit, complete with Accele-Cure fans for a future waterborne conversion from the PPG Nexa Autocolor they now use and purchase from FinishMaster.
Another key equipment purchase for the shop is the 440-volt Pro Spot i4 inverter spot welder that Mahnke said he first saw at the International Autobody Congress and Exposition (NACE) in Las Vegas last fall.
The i4 welder that they purchased from Aces of Denver is fast and accurate, Mahnke said, pointing out that a body technician can input specific vehicle data and the welder accesses a database that tells the technician where to weld and how much juice to apply. “This is helpful with the different steel strengths.”
When designing the facility, Mahnke said he sought out the advice of nonindustry people for a fresh perspective.
Advice was gleaned from Mahnke’s friend who owns a construction company, and his wife Lori Mahnke, a psychology major, who recommended that the building walls have fewer right angles with more glass that reduces customer anxiety and is more welcoming.
While Mahnke oversees operations in Frederick, his siblings are actively involved in the family business.
Gary Mahnke said his son Joshua serves as general manager in Golden, son-in-law Jason Mondragon runs the Arvada shop, while Dan Sarno (not a family member), runs the Brighton location. His wife, Judy, is involved in the corporate operations, while daughters Tori Mahnke serves as operations manager for all stores, and Beth Mahnke, human resources manager.
Mahnke said he quit repairing vehicles at his Westminster location in January 2008 because of overlap with his Arvada shop, converting it into an estimating center.
