LeanTec automates shop paint and material inventory management
Franklin, Tenn.—Paint and material waste and shrinking profit margins are common problems for collision shop managers. LeanTec, an inventory management system that organizes paint and materials inside secure cabinets, carts, and stockrooms, was created by a PBE distributor to reduce waste and increase profitability, said Ryan Ketcham, LeanTec national sales manager, adding that a shop visit often shows the need to organize materials.
“We have found 13 big gold rolls of 80-grit sandpaper throughout the floor on the body side, and they’re dusty and dirty, with some hidden in the corner, and it’s not clear they’ll ever be used,” Ketcham said. “And in that same shop, we found 72 different rolls of attachment tape in three different sizes, partially used and opened. But the distributor keeps loading them up in their own cabinet, because they just see empty spots. And the techs will just keep grabbing new ones instead of searching for the open ones.”
LeanTec’s system requires the technician to use an app with a unique code on a iPod Touch to scan and gain entry to product storage to reduce waste, increase accountability, and help distributors automate the ordering process and avoid emergency “hot shot” orders.
LeanTec’s genesis was in addressing the need of a dealership group’s fixed operations director, who couldn’t figure out why paint and materials margins were shrinking in the 26 collision repair centers he oversaw, Ketcham said. And because dealerships are accustomed to monitoring data such as CSI scores and sales data, they’re “starving for data” in this segment and have been a receptive market, making up about 65 percent of the shops using LeanTec systems, he said.
“They knew all of these metrics when it comes to oil changes and mechanical, but for collision, they were blind to it. They didn’t know what products were used, they didn’t know what jobs they were going to, and they didn’t know where they ranked against other people in the country — or with themselves. They couldn’t fix the problem without knowing where these things were going.”
Now, at a glance, a manager can see customized reports on any or all locations and compare their paint and materials performance.
Vending machines were tried at first, but the way many products are packaged by the manufacturer (such as a roll of 50 or 100 sanding disc sheets, a roll of molding attachment tape, or a large box of body clips) made that impractical. LeanTec can be configured for individual carts, cabinets, or stockrooms, customizable to how each shop prefers to dispense products.
Overall, most shops will strike a balance to encourage efficiency, with the technician “stocking up” with what he will need to get through the workday or the next few days and scanning the bar code of only products billed to the repair order, such as attachment tape (sold by the foot or yard), clips, and fasteners, and the painter pulling any toners or gallons of clear needed for the day.
“It’s streamlined to cut down on how much product you have on the floor, and the technicians are now trained to go to the cabinet to get what they need, because that’s now their ‘store.’ The distributor delivers to just the cabinet.”
If the shop buys clips and fasteners from one source and paint and materials from another, the system can be configured to automatically order from multiple vendors. The minimum/maximum stock levels can be customized, along with how often orders are placed. It means less time spent by a distributor’s sales representative stopping by the shop to take inventory and place an order, which may interrupt the shop’s workflow.
“Instead, they can go out and fix real problems for shops and get new business for the distributor. Before they do their site visit, they log into LeanTec and they can see on their dashboard what the shop’s paint and material profitability are right now. Here’s their cost-of-sales on associated products and paint, here’s their usage per tech. It shows who’s spending all the money, so to speak.”
The reports give shop managers and distributor representatives information to improve procedures.
“If they have a big jump in detail products, I’m going to make a note to check the booth to see if we’re getting dirt in it because it needs maintenance. And if they’re using a lot of Trizact and buffing compound, I’m going to check with the detailer: are they sanding and buffing entire panels? Or are they [as expected] denibbing and buffing?”
Retail purchase price varies, with the distributor typically buying it and selling it to the shop. Depending on how many users the shop has set up to use LeanTec, there is also a monthly fee of $100 to $300 for the Prophet-C software, which is integrated with a distributor’s POS system and with the shop’s CCC ONE.
“We are seeing recoverables for shops of $3,000 a month, so the ROI is beyond tenfold. obs are automatically assigned to the techs in the system, and materials are automatically added as a line item on the estimate. So no one has to remember to hurry up and get it added before the job goes out.”