Measuring Collision Center Performance Posted 11/03/2006 By Rachael J. Mercer Bernie Blickenstaff began his Friday afternoon Congress session on "Measuring Collision Center Performance" by stating three objectives for the class. "Each attendee should grasp three points," said Blickenstaff. "First, they should understand the importance of performance measurement; second, they will learn to improve the performance of their collision center; and third, they will be able to benchmark performance with non-competitive collision centers." Blickenstaff explained to class members the process of "MBO"-measuring by objectives. He encouraged attendees to ask several questions of their businesses. First, where are we? Second, where do we want to go? Third, how do we get there? Fourth, how are we doing? He encouraged collision shop managers to determine goals and objectives, develop action steps to achieve those goals and then to measure their performance. Attendees were urged to work towards managing those items under their control. For example, Blickenstaff explained the difference between internal and external variables. While collision managers are not able to control the economy or environmental regulations upon their business, they are able to influence productivity, materials useage and customer satisfaction. "Focusing upon items which are out of your control will only lead to frustration," Blickenstaff said. "Instead, focus on interpreting your numbers. Your collision center's numbers have a story to tell-make sure you're ready to listen." Benchmarking the performance of your collision center is important, according to Blickenstaff. He explained to attendees the difference between several standards. Collision managers have many options when making comparisons against standards-including national and regional averages, along with comparable facilities and performance group members. Measuring your progress and using your own standards as a benchmark is vital to improving your collision center's performance, according to Blickenstaff. The importance of collecting timely and accurate data by which to measure your collision center's performance was emphasized during the class. Without accurate financial data (including gross profits, sales and cost), it is difficult if not nearly impossible to accurately measure collision center performance. "Non-financial data such as labor hours, clock hours, daily booth operating hours, the labor rate and other items are also important when discovering how your collision center is performing," said Blickenstaff. Attendees were shown ways in which they could utilize Microsoft Excel to graph, chart and plot their progress, particularly in employee productivity. Blickenstaff and the attendees worked through the formula designed to determine the collision center's effective labor rate (ELR). He suggested ways in which the ELR might be skewed and also told attendees ways they could maximize their ELR. Blickenstaff provided class members with ways to compute their paint and materials sales rate, and then said, "managers need to measure paint and materials sales and costs independently." He stressed that paint and materials sales are the third largest sales opportunity any collision center has. In closing, Blickenstaff said, "Manage what you can affect by measuring performance and setting goals, maintain accurate and timely financial and non-financial data, and watch your KPIs. They will enable you to measure your progress and compare performance with others."