By Rachael J. Mercer
Accelerating Cycle Time (ACT) is one of the quickest and most-efficient ways to go about increasing profit margins. In today's collision centers, cycle time can be one of the most difficult aspects on which to get a grasp. But in his Friday afternoon Congress session, Kent Carlson said cycle time is a key area that must be measured; and those results harnessed to accelerate cycle times.
"Measuring is essential," said Carlson. He gave attendees several things to consider when evaluating cycle time. "Since cycle time does not have a standard definition in this industry, the first step involves defining the cycle time that you wish to improve and then measuring it. Improving cycle time will help bring about customer satisfaction, positive referrals from those customers, and will further improve your relationship with insurers.
Carlson explained that an understanding of cycle times can help collision shop owners compare the performance in their shop over a certain time period, compare the performance of various shops (particularly for multi-location owners), establish benchmarks for cycle time and help improve repair delivery estimates.
Class members were provided with formulas for measuring cycle time. Variations for the formulas were discussed that allow collision shop owners to measure productivity based on production days vs. calendar days, the size of job, payment sources, the vehicle make and the employee making the repairs, as well as other variables. Carlson also presented class attendees with a table showing the maximum number of vehicles that could be on-site while balancing production levels with cycle time goals.
Carlson pointed out that these measurements, along with the understanding of their variables, is important to the process of goal setting. Without a thorough understanding of the components that make up cycle time, it is difficult to set goals that boost profitability and decrease cycle time.
"Rewarding yourself along the way is important," explained Carlson. "Set up milestones that help you recognize when you've met certain goals. Stay on course; celebrate the progress you've made; and prepare for the work that remains."
Carlson examined some of the contributing factors to poor cycle time-including poor management of workflow; an imbalance of vehicles and productivity; and poor scheduling. Managing constraints and improving communication are two more steps that must be completed in order to accelerate cycle time.
Other steps include creating a workplan, streamlining the parts processes, segmenting the repair process and optimizing staff utilization. Organizing space is a key element to accelerating cycle time. Carlson said, "There are five 'S' words that explain the organization process: standardize, sustain, sort, straighten and shine." He went into detail, explaining to class attendees the ways in which their shop can utilize the "Five S" plan.
Lastly, Carlson explained that as cycle time improves other items fall into place. Increased productivity and less stress make it possible for collision shop owners to begin looking for ways to expand. Developing a marketing plan is important, too, as shop owners will need to find additional sources of work to keep their more productive operation busy.
Carlson finished by telling attendees, "Select your destination, and commit yourself to taking the necessary steps to get there."