MSO - Performance and Expansion

Most MSOs, in particular those that are Private-Equity backed need to aggressively expand to suit the EBITDA requirements of the PE Investor. Expansion typically comes though the ability to attract new business, either by M&A activity or performance outcome. This is where the challenge lies:

Acquisition brings in different culture and processes, which creates inconsistency. Inconsistency is the enemy of a great USP, therefore a catch-22 situation occurs, where expansion dilutes the ability to attract customers because variability in outcome increases - yet expansion is required. In addition, margins are typically eroded.

The Challenge

Solutions

Network Performance Alignment: Parker Collision Intelligence (PCI) can provide a structured benchmark audit to understand the differences between collision branches, then measure it against high performance shops and provide a gap analysis. This will challenge peoples beliefs about what is possible and how to bridge that gap.

Capacity Modelling: From the resource, the physical constraints and the market analysis we can determine and provide optimal throughput models to ensure that throughput aligns with the cost base, and deliver significantly better GP1 margins.

Continuous Workflow Architecture: PCI specialisation is SOPs to reduce K2K time, create predictable deliverable outcomes through TOC based workflow design. Consistency in output, combined with significant throughput increases (between 15 - 30% in MSO sites) from the same staff resource. This is the key to a great USP, let alone significantly increase EBITDA margins.

Management Layer Design: As business scales, it's essential to establish a balanced management team around skills, responsibilities and hierarchical layers. Our experience from 70% YOY growth has established some key benchmarks for management performance as well as structure.

KPI Accuracy: KPIs typically fit into two distinct types - those that enable immediate action and those that are 'business weather'. We design and develop performance measurement that enables almost instantaneous action in order to right the wrong.

Insurer Confidence Programmes: As MSOs expand, there reaches a point were insurers feel uncomfortable with the volume of work placed in the group. Managing this is critical for continued growth. Our relationship and understanding of insurer indemnity, subrogation and desired outcomes can significantly help progressive insurer carrier client growth.

Guerilla Marketing USPs: Defining a USP is critical to stand out from the crowd. A USP you can say 'so what' to isn't a USP. Consistent outcome, whether is be cost/friction reduction, speed of repair, extraordinary CSI/NPS get insurers excited. Once we've defined yours (and met them), we have a unique TOC based marketing programme to grow your business.

Independent Bodyshops

Independent bodyshops come in all shapes and sizes, from niche restoration to small independent groups repairing mainstream vehicles. These are complex businesses operating against large PE owned MSOs fighting for recognition with the right customer. Because many bodyshops are owned by people who used to be on the shop floor, or are second generation family run, the knowledge and skillsets in operations, management and marketing for today's marketplace are not formally learned, they need support in order to compete.

In countries where there is an over-capacity issue, margins are eroded and survival can be challenging. Profits are difficult to maintain, with inflationary costs ever increasing, seemingly nor mirrored by labour rates. These pressures are the daily lives of the independent that we only know too well.

The Challenge

Solutions

Creating the USP that drives work to you: Until you can do something different to your competitors, and in particular larger MSOs, then you'll struggle to attract customers. There's always something hidden, and it's our job to find it, develop it and help to market the outcome.

Performance: Most people think that keeping technicians busy makes a profitable bodyshop - this is a myth that is far from the truth. Throughput has little to do with technician efficiency, and a lot to do with constraints in your business. As Theory of Constraints experts, PCI can identify your constraints and build a production system around them. Managing constraints is the single most profitable thing that you can do. Unfortunately it's totally counter-intuitive, and difficult to achieve without core understanding, nuances of implementation and managing it when it goes out of shape - that's where we can help.

Key-to-key time (or touch time in USA/Canada): This is where it gets interesting. K2K time in western civilisations tends to sit at between 7-14 days. This is normal. Our solution enables you to halve where you currently stand, making you super competitive on cost to insurers, increase your CSI with policyholders and reduce significantly the high cost of courtesy vehicles, parts inventory and fixed costs per vehicle.

Work in Process (WIP): Heres the scary part. Most bodyshops carry at least twice as much WIP as they need. WIP looks like sanity (I'm busy), but we'll show you that it's your worst enemy. PCI processes massively reduces WIP in order to reduce chaos, focus on flow, manage issues and significantly reduce costs. Reducing WIP will change your life, even though it's scary at first - but we're here to hold your hand - pulling not pushing production.

KPIs that matter: Bodyshops measure some weird 'stuff'. Things like technician efficiency, staff utilisation or shop productivity. This is 'business weather' - basically metrics you can do little about. PCI focus on flow - on a team that work together to ensure flow occurs consistently and a predictable outcome every time. The KPIs you need to use to immediately interact with 'flow' are the ones you need most. Again, it's part of our proven DNA to help you define and measure business success.

Identifying and managing constraints

Theory of Constraints Pull production methodology - Drum, Buffer, Rope (DBR)

Your Tailored Solution

Because every business is different

We work with all shapes and sizes of bodyshops - independents, franchise and large MSOs. Requirements are always unique, so please come and talk to us, free of cost or obligation to see if we can help. If we can't we'll be honest and tell you - that's a promise.

And if you want to find out more about Bodyshop Revolution.AI, check here