Out of the Crisis.Org

[Bud]

Procedures determine the character and personality of any
business. By following its own procedures, either loosely
or faithfully, a firm makes its products, delivers them to
its customers, and takes money in return. If not, how else
could they do it?

Our previous point was that by changing only a few of its
procedures, some firms have become vastly successful.
Others have even created entirely new industries, simply by
changing the way they do things.

For example, 100 years ago people wanting to buy groceries
would write a list, go to a store, and give their list to a
clerk. Then they stood idly by while he collected all their
items, packaged them up, and then calculated the total
price. (Here is a question; who was in control of their
transactions, and why does freedom or control matter to
customers?) Then they took their packages and left.

Then a man named Saunders realized those procedures could
be improved; and drastically. He stocked his store with the
exact same merchandise that other stores had, but displayed
them out in the open on floor to ceiling shelves. He
arranged his shelves to form a single, winding path through
his store, ending where a clerk was stationed at the cash
drawer. Customers had the freedom to touch and examine
things before they bought them, to look at things they had
not planned on buying, and controlled their own, leisurely
pace through the store. This made customers, and browsers,
feel like they were not ‘asking permission' to buy things,
which was a different experience for them.

Thus by changing only one procedure in his selling process,
Saunders transformed shopping from a chore to entertainment
for his customers, and created the concept of modern
supermarkets. He became fabulously successful, and made and
lost several fortunes, all by delivering the exact same
products, but by different procedures.

Here is another example. Fifty years ago, motorists,
stopping at roadside restaurants, were used to waiting a
long time while chefs cooked their orders. Fried chicken
was popular, and back then food prepared in advance would
not keep. When customers were finally served, the procedure
was for them to season the chicken to their own taste,
using only the salt and pepper at their tables.

Then a restaurateur named Sanders discovered the pressure
cooker, which by much experiment, he then converted into a
pressure fryer. His new procedure of frying chicken greatly
reduced his cooking time, and therefore his customers'
waiting time. (Just how patient are hungry people, waiting
for food? The control issue, again) Sander's second
procedural change was to add spices directly to his frying
batter, which made better tasting chicken than the former
‘salt and pepper' routine . Therefore, by changing only two
of his restaurant's procedures, Sanders created Kentucky
Fried Chicken, and became a pioneer in the fast food
industry.

It might look like I use a lot of examples from the food
industry, but in the South food is what we do. More
importantly, people make more decisions on where to eat
than they do on where to get their cars fixed, many more,
and we can learn from that. Before people decide to buy
anything, whether food or car repair, they go through an
information gathering process. By studying the phases of
that process, you can tailor exact advertising messages to
people in each phase, but that is another post altogether.
For instance, what does a person who has already made a
purchase want to see in your advertising? Reassurance. They
want to know that they made the right decision. That is why
people who have bought new cars continue to read the ads,
after their purchase.

Back to the point, our product is car repair. Very few
shops have found ways to deliver that product to their
customers in very unique ways, and to become truly ‘special
places' for customers. So, to simplify, let's exclude them
from the discussion. The typical independent shop (and I am
proud of them) delivers the product in an industrial type
building, often in an off prime location, during narrow
hours. The customer has to bring the car in. For the
majority of the independent shops, there is only one unique
feature that identifies them as being ‘different' from, or
better than, their competitors. Look at it from the
customers' point of view.

Other ‘shops' deliver the same product, but differently, at
the customer's home or business; they go mobile.

Lastly, new car dealerships offer, by their procedures, a
much different experience for the repair customer.
Historically, dealers in the US have only about 25% of the
repair market. So independent shops, simply copying dealer
operations, are also copying their weaknesses as well.

Some are saying the repair market is changing to the
dealerships' favor, only because of increasingly complex
technology and the expense of tooling and information. Only
by the passage of time, it seems, will business slowly
shift away from independents to dealerships, increasing
their 25% share of the market.

However, dealer procedures are changing more rapidly than
that. While many independents debate whether to spend ten
dollars a day to give health coverage to a top tech,
dealers are recruiting those same techs, luring them with
complete benefit packages, and using their skills to expand
their service departments into multi-line operations. To
compete with whom for the car repair dollar?

Even more so, OEMs will study the advantages that
independents have over big operations, and to incorporate
those procedures into, you guessed it, dealer service
operations.

The product will remain the same for quite some time, car
repair. The procedures by which it is delivered, though,
will change more rapidly. Why? Because procedures can make,
or break, a business.

[MattFMN]

I feel that the big thing holding "top techs" from quickly migrating to the dealerships is the pay scheme. Flat-rate is a different article, but has to be addressed here because when they figure out that they can pull in the truly top techs with guaranteed wages (salary, hourly, etc) the independant shop owners/managers will be forced to do as you say: analyze their businesses and procedures. Independant shops, atleast around here, seem to be a little more laid back. Hours are still turned, but the atmosphere is slightly more enjoyable. As dealerships start realizing these things, there will be less and less holding back techs from going to such places. As a diagnostic tech, my greatest envy of the dealer is they have the right tools (they get them sent to them whether they want them or not) and information. Later, Matt.

[Bud]

Hello Matt,

You are right about all that. For a long time I worked for independents, thinking that was the best way to stay in tune for owning another general repair shop. Finally I took a job as a used car tech at a busy dealership, mainly because most of the independents around here don't offer that or many other benefits

It has been geat, working on everything from A to Z, having big-company benefits and a great income. They also encourage the hundreds of people that buy used cars from here each year to return to us for service, activily competing with all the local independents.

[bbraun]

Matt
I think we all have a tendency to see others strengths and not their weaknesses. The dealership definitely gets all the special tools that they may or may not need sent to them. At many dealerships around here though, those special tools are either thrown in a big box and hard to access, located in a tool area 200 yards away, or damaged by improper use by an earlier user. These tools are DEFINITELY not free, or even what I would consider reasonably priced. I can buy Kent Moore or Miller Tools cheaper through a local tool vendor than I could get at dealer price when I worked there. Anyway, these tools are expensed to the shop account. If shop profits fall, the mfg is not going to quit sending tools...where's the money going to come from...yeah, the techs, one way or another. The simple answer is that you need to have enough gross sales to cover expenses and have profit left over.
I happen to think it's unconsienable to consistently charge more time than you have in a job. How many times don't you see the dealerships charging full book time for changing brake shoes, changing wheel cylinders, and bleeding the brakes (3 labor ops) and then shortcutting the job.
I don't know about anywhere else, but around here I have absolutely no problem paying my techs a salary (not flat rate) and buying the special tools I need to get the job done. Don't get me wrong, I don't pay them hourly their same flat rate rate, but both of them make more here than they did.
I just think there's too much fat in the vast majority of dealerships, and they're still convinced that car sales is king...how many dealerships do you know where the top tech makes as much as the top sales people. I think we're going to have to work, but I ain't afraid to compete with the dealership

_________________
Bill Braun

[MattFMN]

That's my point, though. Your shop cannot be used as an example, for you are an exception rather than the rule. Most independant shops just don't invest training, tooling, and benefits. Usually the dealer provides most of that, but with a conditional pay scheme. Some of the "better" dealerships have guaranteed salaries, but fall very short of what an indy would provide. But if they hit their "quotas" they make much more than they would at most indy shops. I'm just saying that if you are not providing a fair wage (that takes into consideration cost of living, and tool investments), benefits, tooling, and training; that if the dealers start to figure out all they have to do is provide consistent compensation it will be very difficult for techs to say no. Shop owners, like yourself, may think nothing of it and adjust accordingly (or better yet, you may not even have to) but it seems too many find this illogical (improving their processes, improving efficiency, treating employees like they would like to be/have been treated, etc).
Screwing over the customer isn't just a dealer deal, many indy's fall right in line and over-charge (and under-charge) for their repairs. 6hrs for a GM 3.1/3.4L intake gasket replacement where the tech can consistently do it in 4-4.5hrs. The tech is happy, he made time but may lose it back because the shop isn't busy. The customer finds out how long it really took/takes and feels they overpaid. The shop owner who preaches honesty and integrity is contradicting him/herself. But, I think this is a separate discussion. Thanks for the response! Later, Matt.

[Louis Altazan]

Hi Bud,