Wednesday, 28 May 2014 23:06

Retro News: June 1994, 1999, 2004, 2009

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Automotive Service Association Position, Certified Automotive Parts Association, Collision Industry Conference

20 years ago in the collision repair industry (June 1994)

The association representatives at the Society of Collision Repair Specialists (SCRS) Leadership Conference meeting were in unanimous agreement on one issue: insurer involvement in parts purchasing. A resolution, passed unanimously, recognized the right of insurers to pursue programs they view as cost-saving, but called for the insurance industry to consider repair industry concerts when developing any such program.

The resolution listed some of the industry’s concerns regarding insurer involvement in the ordering or purchasing of parts, specifically that:

  • Insurers will use such program to force or intimidate a shop to use parts suppliers with which the shop does not want to do business.
  • The programs would substantially reduce shop profits.
  • Inefficiencies could result from delays caused by such problems as inaccurate parts numbers used in the electronic process.
  • Return of parts might be more complicated because of the distance of the participating supplier, for example.
  • The quality of service provided by parts suppliers may suffer if the choice of suppliers is limited by such a program.

—as reported in Collision Expert

15 years ago in the collision repair industry (June 1999)

How much more money can the insurance industry squeeze from collision repairers? Try $2 billion to $4 billion. That’s the figure presented in an article called “Achieving World-Class Claims Performance Using Innovative Supply Chain Management” in McKinsey’s Property-Casualty Insurance Annual.

How could the insurance industry realize this savings? By creating super direct repair programs.

“In general,” the report said, “channeling more repair volume to fewer network participants leads to better prices and other concessions.”

David Friedman, one of the authors of the report, amplified the point.

“Let’s say State Farm says to their DRP providers, ‘We think you’re the best of the best and we’ve got a new higher-grade program where we’ll channel even more work to you, and we’ll have less inspection.”

—As reported in The Golden Eagle. By mid-2000, State Farm was piloting a “Select Service” program with Sterling Collision shops (prior to that chain being owned by Allstate) in several markets; the program eventually replaced the insurer’s “Service First” program, significantly reducing the number of participating shops.

10 years ago in the collision repair industry (June 2004)

Tom McGee would like everyone in the collision industry to ask themselves two questions: What led you to get into this industry, and did you ever expect when you started out to be doing what you’re doing now?

McGee, the CEO of I-CAR, posed those questions to about 60 people attending an I-CAR “industry forum” in Chicago, IL, as a way to introduce his concept for some websites to help attract more young people into the industry.

“Nobody ever explains the career opportunities,” said McGee, who said he’s now the head of an international training organization but started out in the auto body “hobby class” in his high school. “I use the example of touring the DuPoint lab and looking at people who used to be technicians now working in the chemistry area in product analysis. Guys who worked in the stall next to me at my first job out of college now work for GM and Daimler-Chrysler. Did I expect them to go there or me to go here? No. But we don’t show parents what these opportunities are to allow them to understand that kids can make a good career and living in this industry.”

McGee, drawing on his own experience as the father of three kids, ages 7 to 12, suggested that I-CAR develop age-based websites that would include such interactive activities as racing and other games, drag-and-drop customizing of vehicles, trivia and printable coloring books that would give kids reasons to visit the sites…The sites would let kids tinker with cars “virtually,” and also help them see that collision repair skills can lead to rewarding careers not only within shops, but also with paint companies, information providers, and insurers.

—As reported in Autobody News. I-CAR launched two such websites in 2005. CollisionCareers.org is still live, though it is fairly static and offers little in the way of career path “stories” as it did in the early days. CollisionKids.org is no longer an active site. McGee left I-CAR in 2008 and is now with the Automotive Training Institute.

5 years ago in the collision repair industry (June 2009)

Tony Aquila, CEO of Solera, Inc. (the parent company of AudaExplore), told the 250 IBIS attendees (shops, insurers and vendors from about two dozen countries) that businesses moving forward can take one of two roads.

“I think you can just focus on ‘faster, better, cheaper,’ but to me, that’s a dead-end,” he said. “It really doesn’t take you anywhere, because eventually, you can’t make it that much cheaper, and you start to erode your profitability, then you start to lose your enthusiasm and vision, and everything kind of unravels. Or you can focus on what we believe, which is ‘faster, better, more valuable.’ Focus on high-value things that allow you the opportunity to innovate. Because then price is not the issue. It’s about the value you are delivering. We make no bones about it: When we do something, we want to get paid for it because we’re doing something high-value.”

Aquila was asked how his company’s shop customers can use that concept when they feel continually squeezed by insurers.

“If the customer is saying they want cheaper, then I would argue to my people that we’re not doing a good enough job providing more value,” Aquila said. “When you focus on just price, the value curve is out of the equation. That means innovation is not happening. You’re not giving them more services. When customers say to me, ‘We need it cheaper,’ then I immediately think: What do I have to do to add more value so they stop talking about cheap. Because cheap sucks. It’s not good for any of us. What we need to concentrate on is how do we get the waste out of the process.”

—as reported in CRASH Network, June 29, 2009.

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