Time to redress the imbalance – in parts
The Professional: By Mike Monaghan
I’m certain that those of you who have been around as long as I have – and many of you who haven’t – one area that will not have escaped your notice is the massive impact that parts supply, or the lack thereof, has within bodyshops. I’m not talking about prices or discounts, but the ramifications of late deliveries and long delays, or incorrect and damaged parts.
It’s not massive, you might say, considering the volumes of business in parts across the industry, but have you heard of the 80/20 rule, or Pareto principle, which states that 80 per cent of the effects come from 20 per cent of the causes?
We know in a perfect world the best way to progress a car through the shop is to ensure all parts are available before we commence the repair. We have great estimating processes these days with VDAs. In the US they even have something called a blueprint teardown where a short amount of time is allowed by the insurer to partly dismantle the car to ensure all damaged parts are recorded, which helps reduce supplementary estimates and those associated costs and delays.
Even if we had all of the above resolutely in place, the challenge to the bodyshop comes when the parts are not available from the supplier or they arrive damaged.
The bodyshop then has to set about making a comprehensive adjustment to its scheduling, work planning, transfer of technicians, moving of vehicles, courtesy car costs and much more.
The consequences of this carries into all the performance measures required by most insurers or work supply partners, affecting cycle time, delivery planning, front-of-house calls, and increased administration, to highlight just a few.
One that is often overlooked but has a significant effect on a bodyshop’s performance as well as an effect on the technicians and administration staff, is their mindset performance and attitude. It’s a natural feeling of frustration and anxiety when something that is outside of your control causes you increased worry and workloads.
This has been the parts supply issue for a very long time in the bodyshop world. In many other industries when there is a lack of performance in the supply that has consequences for the buyer there are mechanisms in place for penalties to be applied due to business interruption costs associated with the supply breach.
Why has this never been adopted by the bodyshop industry? Surely the time has come for a balance in contractual obligations. The suppliers remain for the most part unaffected financially, the insurer is largely and equally unaffected, but the bodyshop suffers all of the associated costs and impacts.
What does this all mean and why do so many people still view the bodyshop as a “moaning” sector, never satisfied with just having the work directed to them? Simple really – the giants of the industry, the parts suppliers, remain unaffected and the bodyshop is expected to suck it up, get on with it and be grateful.
I’ve heard it said: “That’s what the discounts are for!” But with the erosion of discounts on parts these days, the sums no longer add up. Insurers have the phrase “leakage costs”, well so do bodyshops but no one seems to acknowledge the effects of such loss.
It leaves me with this reflection on yet another aspect of our industry which has been left exploiting dysfunctional market conditions, whereby the industry lacks any cohesive means to hold the giants accountable.
Surely now is the time for the giants to do the responsible thing. We have a very rapidly changing landscape within the collision sector, one in which the best must survive. But we risk this if they cannot return the margins necessary to sustain their investment development.
It is a symbiotic relationship which requires balance for the greater good.
Mike Monaghan is the crash repair industry professional’s professional. Each month in this column he brings into focus the most pressing concerns facing the collision repair industry. His lifetime of experience is used today in training and mentoring the automotive aftermarket. To find out how your company could benefit from his Auto-Motivate programmes, please email [email protected].
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