There have been many articles written in the industry about the concept of "lean processing." Most of those articles explain the ideas behind the "5S" as house-cleaning and organization, the shift to a team concept, and the ongoing search for wasted steps, time, and energy.
But what do those concepts really mean for a shop moving beyond the theoretical to the practical? What is actually different at shops implementing lean? And perhaps most importantly, what different results are there, if any?
The shops interviewed for this article emphasize that you can't skip understanding the overarching concepts or any of the other processes involved in "lean" and just implement the things that they are doing. Lean will look different in various types of shops, and it is an ongoing process, not just a few subtle changes that lead to a final "state of lean."
But too often, discussions of lean don't offer enough practical ideas of what implementing it may look like at the shop-floor level and don't always talk about the potential upsides and pitfalls that "going lean" may bring.
Tough at first
For Canadian shop Owner Ken Friesen, going lean began with a moneymaking purge. After a careful review (or a "sort," according to one of the five S's of lean) of exactly what equipment and tools his business, Concours Collision in Calgary, Alberta, was using regularly, Friesen cleaned house.
"We decommissioned over $100,000 worth of equipment, including a frame rack that we sold off" he said. "We had competitors who thought we were going out of business because we were advertising so much equipment for sale."
Bringing in a little cash at the start was probably good, Friesen said, given the months that followed.
"All that money you're going to pick up (selling unneeded equipment) you're going to lose in initial profitability," he said. "It was very, very painful in the first eight months."
Friesen, who has owned the company for more than 27 years, said he almost felt like he did when he first opened the shop, struggling to make decisions without calling the consultant helping him with the restructuring of his business.
"We lost a lot of money in profitability that first eight months," he said, echoing what many shop owners implementing "lean" say. "But from that point on, things started to pick up. Now we've been at it more than three years. I'll tell you my company was doing just over $7 million 3 1/2 years ago. It now does just over $6 million, so probably about $1 million less in sales. But we have made more profit dollar-wise than I've ever made in my entire life."
Patty McConnell of Old Dominion Collision Repair Center in Eugene, Ore., has gone through a similar process, working the past two years with her son (and shop general manager) Dustin Caldwell to implement lean concepts at the larger of their two shops.
"We can both say hands-down that the biggest challenge and the hardest thing was changing the culture of the shop," McConnell said. "Technicians are notorious for being independent thinkers and doers: 'This is my car, from beginning to end.' In this system, it is strictly a team effort. Nobody owns the vehicle. To change that culture has taken us two years."
That change has come at the loss of some long-term technicians who weren't willing or able to adapt and left, she said. She said any shop making the change should expect some turnover. And as with Friesen, McConnell said the first year was brutal on the shop's numbers.
"They all changed, and it all looked horrible," she said. "The first six months I kept going to Dustin saying, 'Are you sure this is a good idea?' We had higher employee overhead because we hired too many porters/detailers. We didn't have a good gross profit on body labor. Even our supplies and materials expenses were up."
Now two years in, however, McConnell said she feels the change is beginning to pay off.
"Our body labor finally looks good again, and our bottom line is finally back looking like how we thought it would look the first year," she said. "Sales are up. Net profit, of course, isn't where we want it to be, but I don't think it is (at any shop) these days. But are our numbers better than they would have been if we hadn't made the change? Definitely."
What lean looks like
So what looks different at shops that are working through the lean process?
McConnell said that at her shop, you now see people working together: three disassembly techs, for example, working on a single vehicle. Every vehicle in the shop has a parts cart, labeled with the customer name and RO number. Before being moved into production, vehicles are completely torn down so that a complete repair order and parts list can be created.
That process, sometimes referred to as "blueprinting," has been much discussed in the industry in large part because some insurer procedures and expectations can make it difficult if not impossible. McConnell acknowledged that some insurers, intent on measuring how quickly an initial estimate is uploaded after a vehicle arrives, don't see the overall cycle-time advantages that blueprinting offers.
"But two of our three main DRP programs love it," she said. "For one of them, it's just what they wanted, so they were really excited when they found out we were doing this."
(Getting more insurers to remove the barriers to making that process work is one goal of a Collision Industry Conference committee's letter this past spring to the top 25 auto insurers in the country. The committee has proposed what it calls a "complete repair process," which essentially begins with "blueprinting," that it believes could greatly reduce the number of supplements, which carry significant costs for both shops and insurers.)
Shops implementing lean generally point to visual clues in the shop that help everyone see possible slowdowns in production flow. One shop, for example, painted an area on the floor in front of its paint booth; the shop's paint prep team knows there should always be a vehicle on that area, ready to move into the booth as the one ahead of it moves out.
Similarly, the "set" (or "store") of the five S's of lean often involves creating "shadow-boards" with clearly outlined places for every tool, serving not only as a good reminder of where to find and return an item, but also a quick visual way to know when something is missing or not where it should be.
One thing that's not as visible but crucial to the successful implementation of lean processes is the right employee pay plan. Switching from an individual flat rate or commission basis to more of a team plan can be stressful for everyone, McConnell said.
She said her shop has had to refine the plan several times over two years to create one that works well. Technicians now receive a point rating, assigned by their team leader and the production manager, based on such factors as technical ability, team effort, communication and organization. That point rating and their actual clock hours worked determines that technician's share of a pooled pot of produced hours, she said.
Could some of the benefits of lean be achieved without the disruptive nature of a pay plan change? Steve Schaefer of the five-location Schaefer Autobody Centers in St. Louis, believes it can.
"We have situations running individual flat rate. We have situations running commission as a team," Schaefer said. "I believe some sort of connection between pay and productivity is always important. I don't believe those issues are really any different in a lean environment. We've worked it both ways.
"Team pay seems initially like an easy way to get everyone thinking the same way," he said. "But then over time, the disconnect between the individual's performance and the measurement of their performance causes problems. So there just has to be some form of feedback."
Schaefer, for example, said it may run counter to your goal of having the entire shop view a job as complete only when the vehicle is returned to a satisfied customer if a commission or flat rate employee is paid for his work on that vehicle even if it still remains in the shop in other stages of the process.
It's never done
One underlying message about lean that shop owners who are well into implementing it almost universally seem to have for others is this: Despite what any consultant, industry panel, paint company or trade publication article may say, be prepared for a challenge and for things to look worse--perhaps for months or longer--before they look better.
"I'd be lying if I said it has been easy," McConnell said, adding that she rarely hears anyone in the industry talking about some of the pitfalls of lean. "It can be devastating when you think you have it all figured out and people just don't grab hold of it like you think they're going to. And you've also got to be prepared to do continual change. It's not just ever done."