Did You Know? August 3rd, 2021
PAINT BOOTH CLEANING AND SERVICING In the Regina Area
Paint booth servicing for most shops is something that is usually done when something catastrophic happens. For many shops there isn’t really anyone assigned to the job of maintaining the spray booth and even if there is someone, do you really want them to take a day to be non-productive and do that work? This is where Rod Jackson comes in.
“We clean exhaust stacks and booths for 60 percent of manufacturing and auto body shops in Manitoba. I have recently had interest from numerous Saskatchewan businesses wondering if we could come out to clean their booths.
We are coming to Saskatchewan in the middle of August to clean stacks for various body shops in the Regina area.
If interested please drop me a line, So I can answer any questions that you may have.
Average cost is $800.00 to $2000.00 depending on what the customer may require.
All work can be performed after hours, So there is no down time to production to customers.
I mentioned that Rod was heading to Saskatoon, actually he is looking to take care of shops in Regina and hopefully shops south of Regina. Looks like he is taking bookings starting August 20th so if you want to book him you can do so at firstname.lastname@example.org.
Rod has done a number of shops in the Saskatoon area and I’ve heard nothing but good things.
Last week I shared Dave Howe’s Gross Profit spreadsheet and I mentioned that to improve performance in the production efficiency of your employees a strategy that I have used is Labor Control Cards.
I would like to tell you that this was my idea but I have to come clean and give credit to Joe Hinkens, a body shop owner from Solvang California. You can check him out here: https://www.autobody.net/joe-hinkens-profile/ We actually had Joe come and speak to our SAAR members back in around 2002 and he is the author of the Bodyshop Operations Manual that although over 20 years old is still relevant today. Below is an excerpt from that manual that explains the Labor control Card. I have attached a PDF copy that you can reproduce.
Applying Labor Costs
The first step in recording labor costs is to implement the use of Labor Control Cards. The sample below is the actual size and has been designed so that a technician can place a packet of these forms in his or her shirt pocket.
|LABOR CONTROL CARD|
|1 – Metal|
4 – Mechanical
|2 – Refinish|
5 – Detail
|3 – Frame|
6 – Misc
Some computer management systems offer the ability to log labor times using a computer time clock that automatically enters the labor costs to the job. A computer terminal is placed in the shop and the employee simply enters the same data into the computer that he or she would ordinarily enter on a labor control card.
Applying Labor Costs
- Using a labor control card, each day the technician enters the repair order number, the task and the hours worked on each job during the day. Every productive employee should turn in a daily labor control card and account for eight hours or more if any overtime was worked.
- Hourly and Flat Rate employees should both use the same system. Even though flat rate employees’ costs are pre-determined, you still need to track the employee’s time to calculate labor efficiency and gross profit per hour.
- The Labor Control Cards should be collected at the end of each day and entered into the computer. Ordinarily, by selecting “Enter Labor Costs” from the computer management system menu, the user is prompted to enter the appropriate employee, date, task and hours worked on the job.
- After the Labor Control Cards have been entered, the computer management system automatically calculates the added employee benefit costs based on information given during the initial setup of the program. This automatic calculation will determine the true cost of labor and apply it to the appropriate repair order. This process is uncomplicated and simply calculates the hours worked times the rate of pay. true cost of labor includes Workman’s Compensation, State Disability Insurance, Sick Leave, Vacation Pay, Holidays, Unemployment Insurance, Health Plans, etc. Although benefit costs vary from one shop to the next, a simple rule of thumb is to add 30% to the employee’s base rate for benefits.
- For a flat rate employee, the labor costs are entered into the computer upon completion of the job by entering the flagged hours on to the appropriate repair order.
Keep in mind the objective is to maintain at least a 60% gross profit margin on labor.
Application & Suggestions
There are countless ways to put the information collected during the job costing process to work. Here are just a few:
- Identify the Least Profitable and Most Profitable Insurance Companies and the volume of work they each contribute to your monthly gross sales. Have this information available when negotiating pricing agreements. You may find that a particular insurance company contributes such a small portion of your overall business that it’s in your best interest to avoid overly generous terms in your negotiations.
- Identify the Most Profitable Dollar Range of Repairs, sometimes referred to as severity. You will find that high dollar jobs, usually in the $8,000+ range, often reveal a decline in profitability. Notice the term usually. Every shop is different and there are exceptions to the rule, but generally, the most lucrative jobs fall in the $2,500 to $5,500 range.
- Identify the Star Performers. These are technicians or service writers who consistently produce the best results in terms of productivity, customer satisfaction and profitability, just to name a few.
- Identify the Least Profitable and Most Profitable Vehicle Makes. With this information in hand, you can be much more selective in the work you take on, or be better equipped to price a repair appropriately on a vehicle make that has been less than lucrative in the past.
- Identify the Break-Even Point. With daily job costing, gross profit calculations are a significant part of the daily business operations. Initially, the number you will look for is overall gross profit dollars. When calculated on a daily basis you can project your break-even point on the calendar by figuring the average gross profit produced per day. You can do this by dividing the total gross profit dollars by the number of work days it took to produce that amount. You can compare this daily average with your monthly overhead to determine when you’ll hit your break-even point.
- Provide Feedback and Scorekeeping. As mentioned in the chapter titled The Effects of Measurement, measurement alone can improve performance. Let your staff “know the score” and the results will prove to have a positive impact on performance.
Mitchell Cloud Estimating (MCE) is here!
Ann Vincent sent me a note this past week to remind you that MCE training is happening every week on Tuesdays and Wednesdays through August 11th. Sessions begin at 10:30 am Sask time. There is a lot of great information shared during these sessions, including an interactive walk through of the MCE workflow that participants can click along with.
AutoCanada Collision Centre’s are looking for TOP TALENT in Saskatchewan! 🔝
Positions Include: ⚙️
☑️ Collision Centre Manager
☑️ Production Manager
…. And more!
With industry leading compensation there is no better time to apply!
I am almost finished putting the Eventbrite page together so that you can book yourself into our Fall Conference Events. I am just waiting on confirmation of a few details then I will publish the registration page.
Lots of great stuff already lined up including an evening with Lloyd & Sandy Giles as they share their 50 year career highlights with us on Thursday evening September 9th.
Friday you all get to meet Dave Luehr talking about Scheduling and Production Planning followed by Don Pogoda sharing his experience with “Gamifying your Workplace ”. Then we all get together for another Industry Trade Show where you get to meet our sponsors and suppliers – watch for some really cool new ones and reconnect with our long term ones!
Saturday we hear from the folks at SGI what the path going forward looks like now SQARP is fully implemented. Make sure you are there just after lunch when Paul Martin shares some exciting news about Saskatchewan’s financial future!
We will be hosting the event live but we also plan to broadcast the sessions in the event that people cannot attend in person.