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How to Make More Money in the Paint ShopPosted 11/24/2003By Curt Harler
Experience shows that will not work. But there are a number of ways to speed up paint jobs and keep more of gross income as bottom-line profit. "If you can't increase the amount you charge up front, you've got to watch expenses at the back end," says Rusty Rauls, general manager of FIX Auto Collision in Anaheim, Calif. His 16-stall paint area covers about 6,000 square feet and is run by Todd Burdette. "The most important thing is a steady crew," Rauls states. "Turnover is a killer." Constant retraining costs time and money. Inexperience results in mistakes - which also cost money. In a shop that does $350,000-$400,000 in monthly sales, a percentage point or two adds up fast. While it is Burdette's job to dot i's and cross t's, Rauls instituted an incentive program that keeps everyone on the same page. "Next part of the equation is hiring the right people," Rauls says. "Pay them well and, sooner or later, the throughput becomes more efficient." Michael Anderson, owner of two Wagonwork Collision Center shops in Alexandria, Va., agrees that the crew is the foundation of paint shop efficiency. "Like many shops, we've always worked a team system," Anderson says. Mike started as an employee under his father, Andy, and purchased the shop from his dad. Wagonwork has been an I-CAR Gold Class Shop since 1991. They are members of Standox Refinishing, the Automotive Service Association and the Coyote Vision Group. The center is an Audi A-8 Select Repair center and is one of the few in the United States with the appropriate tooling and training for repairing this aluminum vehicle. Quality Control "We have in-house quality control check sheets, developed in-house," Anderson continues. He models much of his quality program on what big OEMs like General Motors Corp. and Toyota do in their plants. "They check end-product. They also regularly check the stamp that makes the part. Likewise, we developed sheets for each segment of the repair process for employees to check off at certain segments of the job. It's not a lack of trust in the workers, but it keeps quality in their minds," Anderson says. Anderson reinforces the idea that the paint shop is the body shop's customer and vice versa. "We want to tear down that wall - have the metal side understand they must give the paint shop a better product and have the paint shop realize they can help the body people by being sure compound is out of the cracks." Vernon Crump, body shop director at John Eagle Collision Center in Dallas, also keeps a close eye on the bottom line. Although they are part of a large dealership, working with Lincoln-Mercury and Aston Martin, Crump notes that they are no different than any independent shop. "We're only as good as our last month's figures," he says. For that reason, he too keeps close tabs on the bottom line. One of the best economic decisions he made, Crump says, was opting not to take any up-front money from paint companies when they opened their new shop three years ago. Some companies will offer between $75,000 and $200,000 in incentives for a shop to sign on to use their systems. They use BASF products and PPG paints, especially for the Aston-Martin work. The materials come from the same supplier. "Instead of opting for up-front money, we opted for a big discount on liquids," Crump says. That discount amounts to about 30 percent. "Our profit on paint material is about 12 percent of our gross profits," Crump says. "That's big. Huge." The Collision Center is a 75,000-square-foot operation with 52 employees. The paint area has three painters and six preppers working out of six booths and three prep centers. "Everyone is on commission," Crump explains. "We pay paint and prep work on book rates for prep and spray time," he continues. Other jobs like buffing are done by separate people and they are paid separately from a different budget. Techonology Tips Rauls found two pieces of technology that are boosting the bottom line. One is a recycling system from FRS Environmental, Corona, Calif. In brief, leftover paint or thinner is placed in a bag and put into the system's container. The lid is closed overnight and the next morning Rauls has crystal clear thinner and a brick of waste. "Every four months they pick up the waste. It costs 10 percent of the cost of liquid pickup," he says. In addition, he buys less thinner. "We cut material cost by two-thirds," Rauls says. Collision Center will use UV curing on small areas or for spot jobs. "We use that cure process so as not to tie up a booth," he says. Another savings was the recent switch in the clear coat to BASF's 5300. "It flows better and is easier for buffing out," Crump says. Although he knows the product has been around for a while, he says they simply never got around to testing it out until recently. However, he likes what he saw. Both Rauls and Crump independently picked up on the 3M Paint Productivity System. Commonly referred to as the cup system for mixing paints, it eliminates a lot of waste, especially on short jobs. "In the past, we used to waste a half-liter of paint. Now we're not wasting paint, we can mix a lot closer, and when we are finished, we simply throw away the liner," Crump notes. Less cleanup is another benefit. Rauls likes the fact that his jammer can keep moving along without pause. "It saves time and is more efficient," Rauls says. Anderson is sold on waterborne paints. "Yes, waterborne takes longer to dry," he concedes. "But you save time in the long run since you get better coverage. Rather than applying four coats, you may have to apply only two or three. "It blends better," he says, "and it does not mottle as easily." People Power
Wagonwork developed its own set of standard operating procedures and put them on a CD-ROM disk. Working with the DuPont Performance Alliance, they now require every new employee to go through the CD-ROM. "The manual is not generic from a paint company," Anderson says. "It is very specific to Wagonwork. It really cuts down on errors." "We have all our buffers and sanders cross-trained on other jobs," Crump says. This means that it is easy to fill in should a worker go on vacation or simply get behind. The shop is organized around nine teams, with painters set up as lateral support groups for the nine teams. "But if one team gets weighed down or behind, we shift the work around," Crump says. Everyone knows there are insurance formulas to follow and target dates to meet. "That means the painters are willing to stay late or work Saturdays if they have to," he adds. The shop recently finished Jaguar training and is certified on the new Jaguar aluminum car. "That is a sizable investment for us," Crump says. The payback is in happy customers. FIX Auto is a large operation, but each shop (or group of shops) is run locally. One of the key components to success in a town is happy customers. FIX Auto surveys all customers immediately after a service is completed. If there is a problem with the clear coat or the color match, the shop will pick up on the customer's complaint before it has a chance to fester. "It changes the way people do business," says Douglas Kelly, president and COO of FIX Auto USA, Los Angeles. FIX Auto works with its customers from the initial report through the claim filing, car rental, repair and post-job survey. While some shops have the FIX Auto name, many are not branded. Think of it as the collision shop version of "Intel Inside" - customers buy a Dell or Compaq computer but have the peace of mind that a brand-name organization is behind the product. Not only does corporate push reports out to its shops (and to its vendors like Hertz and Geico), but the firm's own inspectors work with a shop's technicians to understand what they are doing right and wrong.
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