Saturday, 31 January 2004 17:00

CIC scraps plans to audit effectiveness of CAPA

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From "unintentional fraud" to "estimating database abuse" and the added costs created by the lack of standardization among direct repair programs, the Collision Industry Conference (CIC) plans to address a wide range of topics in 2004. 

CIC participants met in Palm Springs, California, in mid-January for CIC's annual planning meeting. Roger Wright kicked off his second year as chairman by overseeing a brainstorming session about what industry issues CIC committees should be assigned to tackle in the coming year. More than 60 topics and issues were assigned to about a dozen committees.

But perhaps the liveliest discussion during the two-day meeting occurred as one topic was taken off the table: A CIC committee's plans for an independent audit of the effectiveness of programs that purport to certify the quality of non-OEM parts.

At two CIC meetings in 2003, the CIC Parts and Airbags Committee described its plans to ask such organizations as the Certified Automotive Parts Association (CAPA), the Manufacturer's Qualification and Validation Program (MQVP) and parts distributor Keystone Automotive - each of which certifies or brands certain non-OEM parts as superior - to fund and participate in an independent audit by a qualified third-party.

But participants at CIC in Palm Springs voted 40-6 (with at least an equal number not voting) to scrap the plan just days before it was set to launch.

The co-chair and members of the Parts and Airbags Committee maintained that CIC only would be calling for the audit and setting its parameters. The audit itself, they said, would be conducted by an independent third-party - that met qualifications set by CIC - and would be funded by the parts organizations that chose to participate.

"There are several non-OEM parts entities in our industry that are telling us that they provide a superior part for 'x' reasons," said Rod Enlow, co-chairman of the CIC Parts Committee, saying there is confusion about which programs' parts are actually comparable to OEM. He said his committee saw a process audit - similar to that the OEMs require of their Tier 1 suppliers - as the best way to determine whether the parts certification or compliance programs operate according to their own guidelines and if they accurately identify parts comparable to the OEM.

"It will be underwritten by the participants," said Enlow, whose committee estimated the cost to CAPA or other participants at between $42,000 and $56,000 each. "CIC from a liability standpoint is simply recommending that this happen. The participants voluntarily will agree to do this or not do this. If they don't agree to do it, it's over... It's not our audit. It's just an audit that we're recommending."

But opponents to the plan said the resulting report could be perceived as a CIC endorsement or indictment of one or more of the programs.

"There's no reason that CAPA, MQVP, Keystone or whoever wants to participate can't do exactly what you're saying [without CIC's involvement]," Rick Sherwood, owner of the Detroit-based consulting firm OEM Collision Repair Resources, said at CIC in Palm Springs. "My concern is CIC is going to be in the position at the end of the audit of having MQVP, CAPA and Keystone or whoever participates saying, 'The CIC audit process proved we deliver quality parts...' CIC is not in a position to have that happen."

Let the market decide

George Gilbert of Ford Motor Company said he felt such an audit was unnecessary.

"My point is that a continuing audit process, along with a continuing fit test, as it were, goes on every single day in body shops across the country," Gilbert said. "And just like those [non-OEM] mechanical parts that are sitting out there on the shelf, they either perform or they get off the shelf...You don't need a certification program; you let the dynamics of the marketplace determine what parts get put on the car and what parts don't."

Others opposing the audit said the committee could meet its mandate to address non-OEM parts certification by enabling representatives of each of the programs to explain at CIC how their program differs from the others and is better at accurately identifying top-quality non- OEM parts.

For his part, Enlow said he hopes the committee's efforts will result in an audit even without CIC's involvement.

"If not, it's going to put to us right back to square one, where you read the rhetoric, you go to the websites, you make your decision on who makes good parts and you use them," he said. "The hurtful part is, we've worked on this thing almost a year. And nobody had said anything [negative] about it until today. So you've wasted a committee's efforts for the better part of a year."

CIC committees get assignments

Although the audit plan was shot down, the CIC "Parts and Airbags Committee" was handed a list of new topics to address in the coming year, including: specifications for reconditioned parts, uniform parts ordering guidelines, realistic phase-out of mercury-containing parts, and continuing discussion of issues surrounding use of non-deployed airbags from salvage vehicles.

Here's a run-down on what some of the assignments other CIC committees were given during the planning meeting in January.

A newly-formed "Human Resources Committee" has been asked to research ways to control the rising costs of employee benefits; will offer information on overtime regulations; and will discuss how and why employee satisfaction studies can help businesses.

Among the topics the "Education Committee" will address in the coming year is uncertainty among some repairers regarding "repair vs. replace" decisions in structural repair, a problem some CIC participants view as a partial cause for the increasing percentage of vehicles being declared total losses.

CIC's "Estimating Committee" will look into issues regarding errors in the estimating labor databases and what percentage of database times are based on actual time studies of the procedures. It will also look into the issue of "database abuse," in which estimators don't use the systems as intended in order to manipulate repair costs. The committee also will report on the various paint materials calculation tools available.

Fraud committee renamed

The CIC "Fraud Awareness Commit-tee" was renamed the "Ethics Committee" and was asked to continue to look at ethical and legal issues surrounding referrals of customers to particular shops. Given concerns raised in the last year regarding what some state regulators are viewing as fraud by shops, the committee will also examine the issue of "unintentional fraud."

For 2004, the "Industry Discussions Committee" was asked to create panel discussions or other presentations on what insurers are looking for, and on parts distribution issues such as shops ordering certified non-OEM parts but receiving non- certified, or dealers limiting sale of certain parts to shops meeting OEM "certification" requirements.

Among the questions the "Information Technologies Committee" was asked to address: What are the technical barriers to importing an estimate created in one system into one of the other estimating systems?

The "Insurance Committee" will look into the long-standing issue of insurers requiring shops to use a particular estimating or imaging system. It will also research the added costs - for both shops and insurers - created by the lack of consistency among direct repair program administrative procedures. Delays in the removal of total loss vehicles from shops will also be on the committee's agenda for this year.

The "OEM Committee" has been asked to bring information to CIC from the automakers regarding repair issues on hybrid vehicles.

CIC's "Legislative Committee" will continue to keep participants abreast of proposed and enacted state and federal laws; will examine in particular some of the regulations being enacted or more widely enforced by the California Bureau of Automotive Repair (BAR); and will explore issues surrounding consumer disclosure and consent regulations.

The next CIC meeting will be held April 8-9 in Nashville, Tennessee. For more information, visit the CIC website (www.CIClink.org).

John Yoswick is a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988.

 

 

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