Choice Of Building Lot

In many cases, location is a prime consideration in the planning stage when a new building is being considered for a collision repair facility. Many “prime” locations are not in any way realistically suited for a collision repair operation. If the production needs (including parking) are not at the forefront of the decision making process, then irreversible mistakes can be made that can cause the business to ultimately fail. Typically, you need three parking stalls for every repair stall, i.e. a ratio of 3:1.

For example, a friend of mine who had spent over twenty five years in the industry (and had owned his own shop for over fifteen years) decided he wanted to build a new facility so his children, who worked in the business, would have a solid foundation for their business careers.

He picked a lot that happened to be in a superb location from a customer traffic perspective. However, from a production point of view, it was terrible. The lot was situated on a fairly steep hill, it was too small and it had insufficient room for parking.

He built a two storey concrete building with large diameter round concrete pillars supporting the second floor. The footprint of his building was about 3,500 square feet in area (total area 7,000 square feet). He jammed the spray booth in one of the rear corners of the building and the preparation stations against the back wall.

His was a busy shop. He had cars parked up and down the street, down the side of the building and in the main aisle of the shop. On many occasions, as soon as a car was loaded into the spray booth, two or three cars would be parked in front of the spray booth doors in a line. When the painted car was ready to be moved out of the booth, two or three technicians would get in the parked cars and drive them out onto the street, try to find parking for them or drive them back into the shop! This happened many times over the years…until my friend who eventually couldn’t take it any more sold the business.

I know this is an extreme example, but make sure that there is a balance between the production needs and location requirements.
Size Of Building

In the early nineties I, like many others, thought that with the increasing pressures to reduce repair costs, the collision repair landscape of the future would consist of facilities that looked like large remanufacturing plants. Today, I do not see ultra large shops dominating the collision repair industry in the foreseeable future.

What I do see is an industry model where the majority of the collision work is repaired in 15,000 to 25,000 square foot facilities. In a service industry there has to be a balance between production needs and service needs.

The costs associated in keeping say, a 100,000 square foot facility operating at 85% + of its production capacity twelve months of the year would be significant, in terms of maintaining the high market share that would be required and keeping customer service levels high.

I think in many cases, although not all, the efficiency gains made by economies of scale with an ultra large repair facility would be offset by the increased sales, marketing and service costs. And this does not deal with the increased production management and sheer size issues associated with an ultra large facility.

Building Design

It makes sense to most of us that a rectangular shaped building with more of a square shape would be most conducive to moving vehicles around from a production perspective. A minimum building width of 50 to 60 feet is very desirable, if it is possible.

Pillars

Even if construction costs are higher, these will be more than offset by the potential production capacity increase in a pillar free, open production area.

I know a very successful multiple store collision repair shop owner who happens to be in the construction business as well. He is known as the ‘steel beam king’ to his staff. He typically has no pillars in the production area of his body shops, if he can avoid them. He bridges and then removes any load bearing pillars that he can with steel beams.

Overhead Doors

To maximize production capacity and reduce cycle time you must minimize the time any job spends in a repair stall with nothing happening to it.

Whether you plan to build a new facility or upgrade an existing one, whether you plan to lease or own, make sure you have sufficient overhead doors in the production area of the building. I have seen many body shops that have solid building designs that are ideally suited for a vehicle remanufacturing operation flawed by the lack of overhead doors or with overhead doors that are too narrow.

A friend of mine has a number of collision repair facilities where he has an overhead door leading to the covered parking area in every repair stall (each body stall is fully equipped). When a job is stalled because of parts issues, the vehicle is simply rolled out of the stall into the covered parking area and a new job is brought into the repair stall.

Question: How many stalls does each technician need in this type of facility?

Shop Layout & Design

Even if the building design is good and the lot size allows for ample parking, the shop layout is critical when it comes to maximizing production capacity. Talk to as many people as possible about your shop layout ideas. The paint companies have shop design capabilities as do some equipment manufacturers.

It is critical here that you study the types and sizes of jobs you typically work on. The production shop layout will largely depend on the mix of jobs. There are two schools of thought as to basic shop production styles. I believe the production process for shop layouts should be:
o preparation and paint shops should be organized in a multiple or single production line

o the metal shop or body shop should be treated as a production line for light and medium hits and a as a job shop for heavy hits.

As an example, I know of one shop in the United Kingdom that has split its shop in two including the reception area, with a wall separating the two halves. The total shop area is approximately 40,000 square feet.

The production line side takes up about thirty thousand square feet and is designed for the repair of light and medium hits. The heavy hit side of the business has its own spray booth, frame repair equipment, hoists, and mechanical department.

This shop realized that not only were the repairs of heavy hits interfering with the production flow of the larger volume lighter hit jobs, but also the personalities and skill sets of the technicians were different. Some techs had a short attention span and smaller, less complex repairs suited them, while other technicians wanted to sink their teeth into large jobs with more complex challenges.

Equipment Balance

When it comes to budgeting for a new shop or an upgrade to an existing facility, it is important to balance production equipment requirements with the investment required for each piece of capital equipment.

Owing to the planning required and the focus on permits and construction issues, (in many cases) the budget is used up by overspending on the spray booth, preparation stations and mixing room, leaving insufficient funds to purchase adequate frame repair equipment.

In most collision repair facilities the metal shop contributes over 40% of revenues and probably significantly more in terms of profit dollars. This is not the area where equipment should be considered as an afterthought!

In addition to frame straightening equipment are Mig welders and three phase spot welders, as well as short wave infra red curing equipment.

Ensure that you have made provisions to have sufficient (and the right type of) electrical power (i.e. 3 phase) available so you can use a high performance inverter spot welder and be able to install short wave infra red heaters in the preparation stations.

Equipment Budget

As a follow on to equipment choice is the actual budget allowance for capital equipment purchases, or the investment required for production equipment.

Owing to the nature of the collision repair industry, it has a technician driven production model. Your goal is to increase the productivity of your techs and then reduce the number of stalls that a tech requires to be productive. Then increase the number of productive techs in your facility.

An obvious way to increase the productivity of a body tech and reduce the number of body stalls that he requires to be productive, is to give him his own frame equipment, measuring equipment, Mig welder, a mid rise lift and an infra red curing unit. Owing to the price of high performance three phase spot welders, it makes sense to have one welder per 6-8 metal techs.

Equipment Choice

When we buy anything we always want value for money. Sometimes, however, we get confused with absolute price and value. In most cases, when we buy capital goods that are somewhat complex in nature, we tend to not always have the ability to compare ‘apples with apples’. We do not always do a good job of gathering sufficient information about competing products to determine the true value of the different types of equipment. We also do not always do a good job of clearly identifying the specific needs and uses for the production equipment so we can better evaluate competing products and their respective prices from a features, advantages, benefits and specific needs point of view.

For example, a customer I used to deal with built a superb 25,000 square foot building for his new body shop in the early nineties.

I was asked to help him regarding equipment selection and shop layout. I thought he did a very good job of choosing the right equipment and the right amount of equipment (he equipped every body man with their own anchoring measuring and pulling equipment, etc).

However, when it came to him buying the three European down draft booths from the spray booth distributor, he got stiffed. I gave my customer the appropriate specifications that I knew were needed in a spray booth (to maximize quality of the job, minimize process time and being cognizant of the fact that paint materials were trending to higher solids, etc).

Of course, I was not involved in the negotiations and sales process between my customer and the spray booth distributor; afterwards, my customer wished I had been.

As is fairly typical in the purchase of high dollar products some haggling took place and the actual price came down from the original quoted price by approximately $20,000 plus some other bits and bobs were thrown in to close the sale. Unfortunately, when the spray booths were delivered and set up it was obvious the distributor had been able to reduce the sale price by lowering the booth specs.

I can personally tell you that the three spray booths never worked properly. After a couple of years, the booths were upgraded and performed a little better, but they never delivered the performance that both my customer and I wanted.

Summary

In conclusion, if you are planning to build a new shop or upgrade your existing facility, there are some crucial factors that could have a profound impact on the success of the project. The viability of your business could be jeopardized if you make some poor choices in the early stages of the project. Take note of the factors mentioned in this report and use the warnings and examples to supplement your own experience and knowledge.