Wednesday, 25 June 2014 16:46

Retro News: Highway to Hell, Blueprinting, Rekeying Estimates, State Farm and OEConnection

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

If the collision repair industry does not get clearly focused on what the mission is, it will be doomed to dance to whatever tune the insurance industry wants. Probably something like that old AC/DC hit, “Highway to Hell.”

Bill Clinton was elected president of the United States because he kept the country focused on the economy. (His slogan, “It’s the economy, stupid,” became famous. To win in their ongoing economic struggle with the insurance industry, collision repairers have to concentrate on the car owner. “It’s the car owner, stupid.”
Collision repairers are too busy tripping over their own swords to realize that pleasing the car owner every time is a key to survival. Instead, many are more worried about pleasing the insurance companies. They claim that since it’s the insurance companies who are writing the checks, it’s the insurance companies they should be satisfying. Ultimately, though, it’s the car owners who write the checks. They, after all, pay the insurance premiums.
I predict that in another 10 year, the American public is going to wake up and realize how monstrous a financial institution the insurance industry has become.
– excerpted from editorial by Sheila Loftus, editor of Hammer & Dolly published by the Washington (D.C.) Metropolitan Auto Body Association, July 1994

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

CIC’s “Research and Development Committee” is continuing its exploration of a ”new body shop operating model” to improve customer service and “cycle time” – the length of time between the accident and the time repairs are completed and the insurance file is closed.
At the meeting in July, committee chairman Randy Stabler said the average repair claims process is 10 days – including four or five days before repairs begin. His committee, he said, is looking into ways to reduce the inefficiencies before repairs actually begin, including the current estimating process.
“All of the things that are bottlenecks in the repair process are a derivative of an inaccurate estimating system,” Stabler said. “The back-end repair process is never going to be efficient and accurate if we don’t start out with an accurate blueprint.”
Among his committee’s initial recommendations are:
- Improve the estimating systems so that they create that “blueprint for repair” in plain language easily understood by technicians and vehicle owners.
“If the estimate is more than just an accounting of what we’re going to charge or pay to fix the car, I think we’re going to have faster cycle times, happier consumers and lower overall costs for everyone,” Stabler said.
- Reduce inconsistency in parts names and labor terminology used by the estimating systems and vehicle manufacturers.
- Eliminate confusion and inefficiencies by having insurers distribute their pricing guidelines.
- Stop insurer “micro-management” of each individual repair charge.
“Can you imagine someone going in for surgery, and the doctors finding something else that needed to be done but not doing it because they had to stop and call for authorization?” Stabler said. “That’s not an efficient model. ‘Pull it and we’ll come back and see the damage after it’s pulled’ is a flawed notion. That in the long run does not save the insurer or consumer money.”
– As reported in The Golden Eagle. It was at least five years before the “blueprinting” aspect of “lean processing” was being widely discussed in the industry, and still 15 years later it is far from universally adopted by shops.

10 years ago in the collision repair

industry (July 2004)
The Collision Industry Conference (CIC) “Information Technology Committee” reported that rekeying estimates that shops could be receiving electronically from insurers is costing the industry an estimated $17 million or more each year.
Based on a survey of 44 shop owners at a previous CIC meeting, the committee believes that about 28 percent of the 9 million auto claims require rekeying of estimates, which takes an average of 21 to 33 minutes per estimate. Assuming a wage of $20 per hour for the shop employees rekeying the estimates, “that basically says there are 2.52 million estimates that are rekeyed each year by body shops, costing a minimum of $17.64 million,” Cindy Schnier, co-chairman of the committee, said.
–As reported in Autobody News, July 2004. In 2013, CCC Information Services and Mitchell International launched services that enable a participating insurer to enable shops not on that insurer’s DRP to download the insurer’s prepared estimate, eliminating the need for the shop to rekey the initial estimate.

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

Shop owner response was mixed last week to the announcement by State Farm that it was no longer requiring its Select Service shops in California and Indiana to use OEConnection for electronic parts ordering.
Debbie Moore of Diamond Collision Services in Avon, Ind., said that despite some glitches with the system over the past year, it has eventually worked well for the shop.
“We’ve been using it on all our orders, not just State Farm jobs, and will continue to do so at least for now,” she said.
But a Southern California shop owner who asked not to be identified said State Farm’s decision came at an ideal time; his shop’s server had just crashed and he now wouldn’t have to reload the OEConnection parts ordering software on the replacement computer.
“It’s kind of been a pain, and some of my dealers really didn’t want to mess with it,” he said of the parts ordering system. “You almost always had to do follow-up phone calls (to the dealer) with it, so if I have to do that anyway, I can do without it.”
State Farm’s George Avery said although the insurer was “suspending” the requirement to use electronic parts ordering and had no plans to roll such a program out nationally, State Farm saw the test as valuable because it demonstrated electronic parts ordering “has value.” He noted the Select Service agreement still gives the insurer the right to require electronic parts ordering.
“We encourage the repairers to use it if they would like,” he said. “It works. It has advantages. Now that the test is done, we know moving forward that we have already tested that functionality.”
State Farm began the test of electronic parts ordering in two markets in 2007, with a half dozen automakers offering the insurer parts discounts through the program. The program was rolled-out in 2008 to all Select Service shops in the two states, but the number of automakers offering discounts continued to decline until State Farm halted the discount portion of the test earlier this year.
– As reported in CRASH Network (www.CrashNetwork.com), July 20, 2009. State Farm subsequently said it seemed inappropriate to seek OEM parts discounts at a time when automakers were struggling economically and in some cases filing bankruptcy. But it saw enough potential benefits to electronic parts ordering that it sough proposals from companies to develop an electronic parts ordering system – which led to the launch of State Farm’s mandated use of PartsTrader in 2012.

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