For collision shops that want to improve cycle time and decrease unnecessary work-in-process (WIP), scheduling is a necessity. However, I also believe far too many shops over-complicate scheduling, spending hours trying to predict the future using unstable labor hours. What I mean by unstable is that some people and even electronic scheduling systems attempt to schedule work into the shop based off an initial estimate that is probably inaccurate.
For as long as I can remember, people have been trying to create the perfect scheduling system and the perfect scheduling system has remained as elusive as a herd of purple unicorns. There have been some impressive looking solutions, but unless the shop using it has a precise estimate on all the cars in the system, and also can perfectly predict the work-flow, the scheduling factors will constantly be changing and render the system useless in most cases. So, what can be done?
Several years ago a friend of mine, industry consultant, Ron Kuehn, showed me a better way that has helped many shops better manage their cycle time measurements. You can’t over-think this stuff, you must keep it simple! Here is a system my Elite shops use that works as well as anything, and it doesn’t cost anything. All you need to understand is two things:
- How many vehicles can I fix each week on average to meet my revenue requirements?
- What is my optimum WIP?
How Many Vehicles
Determine how many repair orders your shop repairs each week on average and then bring that number of new jobs in each week. Just don’t bring them all in on Monday! The best shops in the country bring nearly the same amount of new repair jobs into their shop each day and they also deliver the same amount of repair jobs each day. The more sophisticated shops will triage, or categorize the size of job to create better workflow out in the shop. Here is an example of a simple scheduling tool created only using an Excel spreadsheet.
This scheduling template was created for a shop that produces 25 vehicles on average each week. Using some historical data from their computer management system, we were able to determine an approximate work mix based simply on dollar amount. CAT 1, 2, & 3. For starters, if you can simply just count the vehicles regardless of job size, you will still be miles ahead of most shops.
As you can also see from the example schedule at the top, this shop feels comfortable bringing in new repair jobs each day of the week. As mentioned earlier, some of the best shops literally bring in the same number of vehicle every day, even on Friday. My advice is to start with a schedule such as the one shown, and as you continue to improve our processes, and your confidence increases, you can then begin to progress towards the same number of new jobs each day.
What is the right number of vehicles or labor hours you should have on the property? That depends on a couple factors, but is still relatively simple to figure out. You multiply your shops daily average throughput (how many vehicles you deliver each day on average) multiplied by your average cycle time days. Let’s use the same shop that we used for the scheduling example above which can produce 25 repairs a week, or 5 repairs per work day. This shop has an average cycle time of 10 days. To maintain a cycle time of 10 days and produce 5 cars a day, it will need to always have about 50 vehicles on the property.
5 vehicles X 10 days = 50 units (WIP)
If you wanted to improve your cycle time, you would need to reduce your WIP count or increase productivity. For example, if you wanted to reduce your average cycle time from 10 days to 8, you would need to reduce your average WIP unit count to 40 units. Or you would need to increase your throughput to more vehicle each day.
5 vehicles X 8 days = 40 units (WIP)
Bringing It All Together
Don’t overthink the scheduling part, it will only stress you out! Just think of it as needing to bring in enough vehicles to maintain your optimum WIP which is simply a result of how closely you can match your output with your input. Keep in mind that whenever your WIP count climbs above your “optimum” WIP number, your cycle time will suffer, and if your WIP count falls too far below optimum, it might further improve your cycle time, but it could also negatively affect your revenue goals if you run out of production ready work. You can also count WIP hours instead of WIP units/vehicles, but typically counting units will get the job done! Each day, if you keep an eye on sales vs. goal, and WIP count and make the necessary adjustments, you will be amazed how it will improve your collision repair business.
Watch the free video training I did with Ron Kuehn at the Elite Body Shop Academy to learn more best scheduling practices!
If you would like more information please feel free to contact me at firstname.lastname@example.org