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Manage your Work Providers
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It is a common sentiment amongst bodyshop owners that work providers have a stranglehold on the repair industry. They dictate pricing and turn around times; how estimates are produced, and a myriad of other aspects of your business. In no other industry does the work provider have such control over a third party’s business.
Regardless of the control that work providers have, there is no denying that without their continuous volumes of work, most repair facilities would not exist today.
When you look around the industry, the most progressive and rapidly developing repair facilities rely heavily on work providers, they have to! Speculators will often comment that the razor thin margins required to supply these large facilities with the volumes of work they require, is simply not worth it. But are these large facilities actually profitable, or are they losing money?
The answer is simple – operators with the right tools and information are highly profitable, those without are indeed losing money, and fast!
WebTRIM works closely with some of the biggest repair facilities in Australia. We often encounter new clients that have won large volumes of work through contracts with work providers, and after a short period realise that maintaining such a contract is not as simple as initially anticipated.
By using WebTRIM, you can specifically analyse every aspect of work that you have done for a particular work provider – we will explain how this directly impacts on your profitability in a minute. The information available to you is broken into three sections:
General Information
- For any period you choose, you can look at various types of cycle times, actual sale rates achieved (for both panel and paint), profit levels, average repair costs, numbers of jobs, sales volumes, and more. Information can even be drilled down based on type of impact!
Industry, Group & Regional Statistics
- We not only provide you with in-depth knowledge of your own business, but also provide you with detailed information with the results of other repair facilities dealing with the same work providers. You can literally view the average cost of repairs for a particular work provider in comparison to your own, not to mention information such as average achieved sale rates, parts percentages - the list goes on. All of this is available to you live, you no longer have to wait weeks, or even months for this critical information – it is updated constantly, and requires absolutely no data entry! Not only this, but we are able to define various groupings so that you can compare your results to your local region; a particular type of repair facility; or a more general comparison to all WebTRIM clients across Australia. This is discussed further under ‘Live Benchmarking’.
Severity Analysis
- As you are no doubt aware, certain work providers analyse your business based on a severity rating system. The primary issue with severity ratings is that it is too much of a gray area for most repair facilities. The work provider will dictate to you their expected dollar value per severity point, and tell you at the end of the month (a) what severity rating you are on, (b) what dollar value you achieved, and (c) if you don’t improve on this figure, they are going to start taking work away from you.
- The critical issue with this severity system is that you simply don’t know how you are traveling until it is too late. WebTRIM provides you with the knowledge and tools to know how you are performing right now. We provide you with calculators so that you can quickly estimate the severity points on a repair before you even start the work, and with a target dollar value per point – it will indicate the expected total value of that repair by the work provider. Secondly, we provide you with reports to show the actual severity rating on the vehicle, in comparison to the severity rating assigned by the work provider. Thirdly, our reports are able to estimate your actual severity rating per month, and the subsequent dollar value per point.
We continue to stress that the right information and tools can greatly impact on the profitability of your repair facility, but how?
For starters – the simple matter of watching your average repair cost. If you know that your work provider analyses your performance solely based on average repair costs, and that you are starting to get too high, you might be inclined to take on smaller jobs to drop the average down. The information available to you will also indicate the worst performing work providers in terms of profitability. You may decide to reduce work levels for these low profit bearing providers, and shift your focus on the more highly profitable work providers.
The industry statistics could highlight that your parts percentages on jobs are too low, which invariably indicates that your average cost of repairs is probably too high. These statistics may also indicate that your used parts percentage is too low in comparison to others – which could be another barrier to gaining greater volumes of work from a work provider. On the other hand, you may find that you are making higher margins on panel or paint than others in your region – allowing you to focus attention on other work providers not doing so well.
Severity tools and reports can open a Pandora’s box of opportunity. As stated, it is still very much a gray area in the industry. You will basically be well ahead of the game, and can be comfortable in knowing how your severity rating is traveling for the month, and the value of each point. Since the work providers utilising severity ratings rely very heavily on this information, monitoring and controlling your rating will have a positive influence as to how work providers will view your business. The reports to compare your assessment of severity, with that of the work provider can even be used to highlight errors in initial work provider severity assessments, or at bare minimum, will aid in your understanding of how and why a particular severity has come about.
Beyond the key areas mentioned, we can work with you to help identify areas of concern, and aid in providing solutions that will maximize your profits. Most importantly the information we provide is easy to understand, and can be applied to any size facility.
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