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3M Presents Lean Training at NACE 2011

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I would like to open up a discussion about what I view as a business critical measurement.

 

I will put some thoughts forward and welcome other’s comments.

 

There are different schools of thought about how to calculate it.

 

Insurance Companies prefer “Life Cycle” where they measure from FNL (first notification of loss) right up to payment of invoice.

 

I have worked with some insurance companies who through repairer self-authorisation and electronic payments can get this parameter down to less than twenty eight days.

 

 

For me in the body repair business I prefer “Key to Key”

 

Again there is difference of thought on how to calculate, some count calendar days while others just working days.

 

For me I measure calendar days, this gives a true measurement and may show some serious flaws in your working practices. But this is the best way forward if you truly want to improve your business.

 

A lot will depend on your work mix and the average size of the jobs you undertake, but I would expect most well run shops to operate a key to key time in the region of five to seven days.

 

 

Some causes and effects of key to key times and the impact on your business are as follows.

 

Causes

 

  • Estimate Accuracy
  • Parts Availability & Delays
  • Workshop Utilisation
  • Tooling & Equipment

 

 

Effects

 

  • Cash Flow
  • Courtesy Car Cost
  • Customer Satisfaction

 

 

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Replies to This Discussion

So what is a good measurement for Keys to Keys how many days?
To me, the holy grail for cycle time keys to keys would be 5 days with an average RO of around $2000. The reason I chose this is because it elimiates a whole weekend of rental on average. Now, we can't bring every car in on Monday and deliver on Friday, so that is why you won't eliminate a weekend rental on eery job. I haven't gotten there yet, but hopefully some day. This is based off of calendar days.
We have been tracking our cycle time in earnest since March of 2010.
As of September 9 2010 our cycle time measurements are as follows

Cycle time - Keys to Keys 6.2 days {calculated using calendar days}
Cycle time - Repair hrs. completed per calendar day per vehicle 3.8 hrs.
Cycle time - Repair days 5.1 days {calculated using work days only}
Cycle time - Repair hrs. completed per work day per vehicle 4.0 hrs.
These numbers represent our average cycle time from the day we first started tracking until current date.

We track our cycle time because we feel that it is in fact a very critical measurement of how well we are running our business.
In the past we tracked technition efficiency, but cycle time takes into account the complete organization. Even down to finding new and better ways to get the vehicle {and keys} to the customer when completed instead of sitting a day or two, or through a weekend. And not forgetting to include all aspects even the detail department getting the vehicle ready for delivery.

The main reason to track cycle time is to use the information provided to improve the current performance.
At the begining we used 4.0 hrs. of work completed per vehicle per calendar day as a goal.
We then tracked our performance and the reasons for not attaining our goal as well as what methods helped us attain our goal.
We found many ways to improve our cycle time and are having fun with the challenge to continually improve.
Just the act of tracking helps to improve, and we are planning to break down our measurements to individual technitions, parts suppliers, estimator/sales personel, each department {metal , structural, refinish}, severity of repairs performed, length of time to send final bill, etc.

I found that tracking cycle time has improved our business tremendously and is a fun new way of keeping score. It is also very satisfying when you can measure, work toward, and see improvements.
I guess it really depends on your mix of work and severity. Rather than looking at a small repair and a major rework on a premium luxury vehicle and taking averages on completion times to determine cycle time, break the processes down and set milestones.

For a vehicle that has a damage report and a parts pre-order, consider this:
1) Time from vehicle arrival (first "keys" handoff) to disassembly for repair planning (AKA tear down): 1 hour.
2) Time to confirm readiness (parts order and initial damage report are accurate): 1 hour.
3) If the damage report and parts order are accurate, time to dispatch to a technician: 1 hour.
After dispatch, look at your technician proficiency and determine how many repair hours a tech should turn for each clock hour. Remember, the parts order is complete as is the repair plan (Work Order) before dispatch. The only time that the technician should have to stop production is to hand it off to the next process.

By breaking the process down to its component parts, you will begin to identify the root cause of the delays. Use a technique called the "Five Why's" to identify the real reason for delays. You cited parts delays as a problem. Ask and answer the question "Why" at least five times. Example: Parts are delayed: "Why? (#1) parts supplier has a 2 PM cutoff time for next-day deliveries and we missed the cutoff. "Why?(#2) the technician did not let us know that we needed more parts until later in the day. Why? (#3) technician did not disassemble the car until lunch time. Why? (#4) the technician did not receive the RO/car until noon. And on it goes until you find the root cause.

For a repair center, measure several milestones to determine where your issues are:

1) Customer drop-off (first key hand-over) to dispatch
2) Dispatch to completion (ready for delivery)
3) Completion to pick-up (second key hand-over)
4) Total Cycle time (keys to keys)

The only one of these cycles that we truly control is #2. As a manager or owner, you should have complete control of your production facility. Items 1 and 3 can be delayed for many reasons: waiting for a reinspection (item #1) or a customer delay in picking up their finished vehicle after notofication of vehicle readiness (#3). Excessive delays in #1 can also be caused by delays in dispatch and disassembly.

Don't try to eat this elephant in one bite.
Friends,
When we at DuPont have worked with repairers we have found everyone wants to solve the problem of slow cycle tme by evaluating the production processes. Instead we focus on the "Crash to Cash" cycle...

The ideas mentioned in Randy's post were spot on... Let me add to it...

DuPont has put a focus on the administration processes. If you value stream map the entire admin process you will see that is where your biggest amount of wasted time and steps lies.

With over 10 locations we averaged 240-300 steps in the admin process. When compared to smaller repairers with less people in the office we found less. Why? Transiton...

One solution we ask repairers to consider is to move towards a "Customer Care Manager" (Merge Estimator and CSR role) as the single point of contact with the customer and a Repair Process Manager (Merge Prod. Mgr and Blueprinter and even the Parts Coordinator role) to deal with the insurer/fleet customer and technicians.

When paired with our blueprinting process, parts management process, and some simple pull production controls, we have been able to reduce cycle time by 1 to 3 days depending upon the situation.

Call if questions 763-219-6041
Steve

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