| Why Should You Read The Digi-Lean™ System? |
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Business Opportunity or Path to Irrelevance
The collision repair industry is facing another major challenge to change and remain in control of their own destiny. Similar to the 1980’s when ARMS initiated the Job Costing movement and the 1990’s when automated estimating became the norm instead of the exception, changing to a Digi-Lean™ Operating System is the next change necessary for repairers to remain competitive in the 21st Century! I truly believe that implementing a Digi-Lean™ Operating System will have as much, if not more impact on the survival of collision repair businesses as ARMS did in the 1980’s!
With many business altering changes happening in the business environment around them, collision repairers are, once again, being forced to consider some major adjustments in the way they operate their businesses. Some of the biggest issues collision repairers have today are rising administrative costs, increased pressures to do more with less, decreasing margins, increasing insurance company influence on consumers and repair processes, pressure to complete repairs faster than ever before, finding and keeping qualified technicians, ever changing environmental and legal requirements, and much, much more.
In today’s collision repair business environment auto body shops are being asked to assume many of the claims and administrative processes that were previously being performed by the insurance companies. It is no accident that insurance companies are enjoying record profits lately. In addition to reduced accidents and claims and a good investment environment, they have also “off loaded” a lot of their Loss Adjustment Expense to collision repairers. By accepting these administrative processes repairers have assumed what we call Repair Adjustment Expense, which has led to a dramatic increase in administrative expense for collision repair businesses.
The collision industry is not the first industry to face such changes. Several other industries, both large and small, have faced similar challenges, and for those businesses that did move to a Digi-Lean™ System, the returns were nothing less than DRAMATIC.
Some of the industries that have faced similar challenges and have gone down the Digi-Lean™ path are the manufacturing, re-manufacturing (job shops), governments, dental, medical, and legal industries. Now I know what you are thinking….... The collision repair business cannot be compared to all of these industries, especially, dental, medical, or legal offices. Well I beg to differ.
Here are just a few similarities between a collision repair business and a dental, medical or legal office.
» All deal with “customers” that want their product or service better, faster, and cheaper
» All deal with shrinking margins
» All are facing ever increasing difficulties finding and keeping talented employees.
» All deal with TONS of documentation!
» All have office personnel that create, process, and file that documentation
» All manage a customer “file”
» All MUST document everything that is being done with regard to the “customer’s” file.
» All must communicate with several individuals and/or companies on every “file”
» All “bill” for their time and/or activities
» All must document their costs associated with a “file” to measure their profitability
» All must manage digital images, videos, audio recordings, and other “digital” files.
So while the collision industry has been complaining about DRP’s, shrinking margins, increased insurance “meddling”, more total losses, shrinking times from the information providers, and other “issues”, many service, job shop, dental, medical and legal organizations have already decided to implement a Digi-Lean Business Operating System and below are some of the documented results.
» One hospital reduced costs by more than $25 MILLION dollars per year
» One city department was able to reduce costs by $200,000 per year
» Office productivity improved by up to 50%
» Document storage was reduced by almost 80%
» Printing and filing costs were slashed by more than 70%
» Administrative costs per office employee were reduced by more than $4000.00 per year
» Internal and external communications improved dramatically
» Customer satisfaction improved by more than 15%
»Overall, businesses that implemented a Lean and Digital Based Operating Model estimated that for every dollar they invested in digital tools, software and implementation costs, their return on that $1.00 investment was almost $30.00.
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