More than 80 body shop professionals from across Hawaii gathered in Honolulu for professional growth and development during the January Collision Industry Experts Event (CIEE). The event was hosted by Island Concepts, based in Hawaii, and AkzoNobel.
Scot Takemoto, an owner of Island Concepts, has attended the AkzoNobel CIEE for the past two years in California.
“It has been phenomenal and that’s why I wanted to bring it here to Hawaii,” he said. “I believe that for our industry in Hawaii to become healthier, we need to have opportunities like the CIEE to become stronger and more unified.” He plans to hold the event each year in the future.
“When we start thinking about one industry, one group of owners, managers and technicians, at the end of the day, we just have to look out for one another,” said Dan Carranza, AkzoNobel’s national sales director for vehicle refinishes in the U.S. and Mexico.
Carranza said the event offered the opportunity for shop owners, managers and vendors to network and connect, as well as rethink how they do business.
“I feel very certain that at the end of the day, you will have either learned something new or made a new connection that’s going to impact your business,” he told event attendees.
Team members from Island Concepts, left to right: Todd Stogdell, Samantha Crowton and Scot Takemoto.
Tim Ronak, senior services consultant for AkzoNobel, pointed out the unique environment in Hawaii. “Most people claim to be on an island and you really are,” he told attendees. “A lot of the business practices that occur on the mainland in the U.S. start to proliferate out here, and you need to be aware of those changes as they come.”
Brandon Okahara, an owner of Oka’s Auto Body in Waipahu, HI, said his team is always looking for the best “bang for your buck” when it comes to learning and development.
“When an opportunity presents itself for our team to learn about new products, gain technical information, and allow for personal development and networking, we’re all in,” he said.
Like many other events he and his partners have attended, they have noticed changes occurring in the industry.
“It’s important to see where the industry is going and where we need to position ourselves,” said Okahara. “Whether it be technology, equipment or revenue streams and where your next sale is coming from, many different factors affect change and we need to learn how to embrace it.”
Duane Bullard, owner/manager of Big Island Collision Center in Kailua-Kona, attended the event with three employes -- his painter, manager and estimator -- and said his shop tries to keep up with the latest trends and training.
“Anytime we can have training in Hawaii, without flying to the mainland, it benefits all of Hawaii,” said Bullard. “Shops are inclined to send more of their technicians and staff locally than sending them to the mainland, which helps all customers on the islands.”
He said it’s always good to have his staff attend educational events, even if it is something they have been exposed to before.
“You always pick up something new as so much information is shared during these training sessions,” Bullard added.
100% Disassembly Parts Staging
Mike Anderson, owner of Collision Advice, gave two presentations during the event. During the first, he shared some of the benefits of 100% disassembly, including improved cycle time, decreased stress and chaos, fewer supplements, more efficient mirror matching, ensuring on-time delivery, and minimizing the time parts are ordered.
“100% disassembly helps justify the operation and increases your ability to get paid from the insurance company,” noted Anderson. “It also increases the average labor hours per repair order.”
He said most people think they are doing 100% disassembly but are not.
“We need to help our teams see 100% disassembly from the same perspective,” he advised.
Event speakers, left to right: Mike Anderson, Jeff Baker, Tim Ronak, Dan Carranza and Ryan Brown.
As part of the journey, he recommended discussing and building consensus on the benefits to all industry stakeholders and the organization, collectively building a list of reasons why something needs to be done to a vehicle and creating a standard operating procedure (SOP). He also suggested devising a narrated training module for new hires or internal training and conducting an audit.
“If we do these things, we can create an ‘ah-ha moment,’” said Anderson. “This means they understand the concept, which leads to sustainability.”
Anderson discussed the benefits of the team concept, which involves forming small teams that run like small shops.
In a traditional collision repair center, Anderson said it can be more complex to manage teams, communicate and resolve issues. As a result, he has found that small teams are more effective than large teams.
“Each team has fewer lines of communication and more control over work processes and flow, which can improve quality,” he explained.
Anderson encouraged shops to consider the benefits of having a dedicated parts person at the facility. He also offered insight on parts storage solutions and how to set up parts staging areas. They would include:
• Receiving: This is an area where the parts cart is placed with all damaged parts to be mirror matched when new parts arrive
• Ready for dispatch: Where the parts cart is placed when all critical parts have arrived, been mirror-matched and authorizations are secure. This means “Go” for technicians.
• Vehicle is in paint: If the carts are in this area, it means the vehicle is in the refinish department.
• Vehicle on hold waiting on authorization: Parts are on site.
• Empty parts carts.
• Total loss parts carts with parts in shrink wrap.
Obstacles are Opportunities in Work Clothes
In Anderson’s second presentation, “Obstacles are Opportunities in Work Clothes,” he warned repairers about providing poor customer service and inadequate parts management and repair planning. He also cautioned the industry about starting repairs without insurer authorization and a lack of 100% disassembly.
During his talk, Anderson shared a chart showing average repair order by state. In 2024, the nationwide average was $5,462 -- up $298 or 6%. The highest was in Rhode Island ($6,969) and the lowest was in Vermont ($3,258).
In Hawaii, last year’s average was $4,795. The state also had an average of 14.2 body labor hours per estimate in 2024. With a $289 increase in severity and a .5 decrease in total labor hours, Anderson asked the Hawaiian shops who attended the event how they will grow sales in the future without increases in ADAS, scanning and labor rates.
Anderson noted claims were down in March, April and May 2024 and total losses are increasing.
“The average shop’s backlog has slowed down,” said Anderson. “We must get back to the basics, looking and monitoring repair order count month to month, and month compared to the prior year.”
He encouraged shops to “dust off the old playbook because it’s still relevant today.”
Anderson shared trends in claims, auto insurance and new technology such as ChatGPT. He also reviewed the steps to perform a health check on a vehicle and talked about the new EVs entering the market from Hyundai Motor Group, which includes Hyundai, Kia and Genesis; BrightDrop, a subsidiary of GM; and BYD.
Part of his presentation included details on telematics and vehicle ownership subscriptions. “By 2030, digital services could generate as much as $1.5 trillion in revenue for the global industry, rising to $3.5 trillion, amounting to 40% of automotive industry revenue by 2040, according to consultancy Accenture,” said Anderson.
In the evolving collision repair industry, Anderson stressed the importance of providing a personalized customer experience.
In summary, he said capture rate is the No. 1 key performance indicator (KPI). He encouraged shops to focus on customer pay and follow up on unscheduled estimates. In addition, he recommended embracing technology and artificial intelligence and knowing the shop’s financials. He warned about increasing insurer pressure and said that estimate accuracy matters.
“Be extraordinary building your culture so people don’t just love their jobs, they love your organization,” said Anderson.
Supercharging Staff Engagement with Gamification
Jeff Baker, senior services consultant for AkzoNobel, talked about supercharging staff engagement to maximize a shop’s profit flow.
“There is nothing more exciting than creating a positive employee change that benefits everyone in your business,” said Baker.
Attendees had an opportunity to experience gamification first-hand during one of the sessions at the event.
He acknowledged that leading process change can be one of the biggest challenges managers face in their businesses. As a result, he noted that many companies are turning to a strategy called “gamification.”
Using this approach, employees are involved in helping to improve the company’s process. Baker explained that gamification uses engagement, social interaction and collaboration to motivate or influence behavior.
“Gamification can be used to help improve staff motivation and profit for the shop and can lead to improved learning and retention,” said Baker. He stressed the importance of ensuring there is continuous improvement and communication.
Some of the top employee motivators, according to Baker, include increased pay, employee perks, improving process stress, skill development and overall work environment.
“Being able to develop a simple scoring system that you and staff can use to provide constant feedback can help improve your process,” he said. “Your ability to tie the scorecard to everyone’s motivator is the key to developing a simple scoring mechanism that can drive process performance.”
During Baker’s session, he explored how to use interactive tools to sustain process change, improve employee engagement and enhance measurements. He also shared examples of how owners and managers use gamification in their shops to optimize output.
Event attendees had an opportunity to experience gamification firsthand during Baker’s session while participating in several games as a group. The games represented certain processes in the shop. One game played was writing a standard operating procedure (SOP) for getting off the floor without using hands.
Another was the hole tarp exercise, which represented cycle time. Participants were divided into two teams and held a tarp with holes. The ball on the tarp represented “the car,” and team members worked together to have the ball circle the holes, which represented five stages in the body shop: check-in and estimate, parts, body, paint and reassembly, and delivery.
An attendee shared that using games to simulate processing a vehicle through the different stages helped in identifying quality control areas needed to improve the team’s performance.
“One team decided to make their SOP more visual as a way to help improve communication to others that would be following the process,” Baker shared. “A manager who attended the presentation said it was a fun way to engage members in process improvement and communication having everyone participate in improvement ideas. He said the exercise would help his shop and staff improve communication around process solutions.”
New Vehicle Technology Refinishing
Ryan Brown, western technical services manager at AkzoNobel, talked about some of the changes in new vehicles that impact refinish steps and how they have added complexity to repairs.
“As vehicle technology evolves, so do the refinish processes required to properly repair them,” noted Brown.
He discussed some of the important considerations shop managers need to be aware of to ensure staff properly identifies and repairs customers’ vehicles and stressed the importance of always following OEM procedures.
“The repairer must obtain [via OEM networks] the necessary equipment and repair methods for each manufacturer and model,” he said. “Repairers should always strictly adhere to the repair methods set by each OEM.”
Brown shared insight about new color technology and how the complexity has increased. He used the example of high chroma, nano and glass and color shifting pigments, leafing aluminums and structural colors. He also talked about challenges with pastel colors.
“Color perception and the blending application standard is higher and mixed colors must be even closer,” he explained.
When working with pastels, he recommended repairers reduce paint to increase transparency, use smaller fluid tips and spray guns, keep the base coat application small and use the least amount necessary.
Brown also addressed how to comply with radar and advanced driver-assistance systems (ADAS). “Passenger vehicles now often have advanced technology, increasing repair complexity,” he explained. “OEMs have specific requirements when repairing vehicles equipped with these advanced technologies, including radar.”
He explained that a “radar zone” is the area of the substrate through which radar transmission occurs. Radar signals can be reduced by the substrate and/or coatings. As a result, improper repairs may occur. He advised repairers to consider refinish paint products and repair processes.
“When working in a ‘radar zone,’ if there is a radar transparent color formula available and the OEM procedure specifies the use of a radar transparent formula, it must be used for repairs,” explained.
He said it’s the repairer’s responsibility to ensure sensors retain the proper functionality and integrity to maintain vehicle and passenger safety.
Brown also shared information about the Society of Collision Repair Specialists (SCRS) blend study, which was conducted with five major North American coatings companies to compare the time required for blending versus full refinish. The findings showed that blending took 31.59% more time than a full refinish.
“The study suggests that the current formula undervalues the time and resources needed for blending,” noted Brown.
Optimizing Estimating Skills and Profit
Ronak, AkzoNobel’s senior services consultant, shared insight about maximizing estimating profit by overcoming objections to payment for needed procedures. He discussed what insurers are required to do to settle a loss.
He said they have three options: reimbursing the customer in cash, repairing the property and assuming the liability, or replacing the damaged or stolen property. He noted that insurance claim payout severity as of Q1 2024 was $5,898.
“Insurers are looking to manage this severity as an economic solution rather than an engineering problem,” he said. “This includes looking into every facet of the claims process, including third-party processes.”
Part of this review is the inter-insurance claims process called subrogation, where an insurer may face a subrogation arbitration tribunal that looks for incorrect or unjustified claims paid out by an insurer seeking subrogation against another at-fault insurer.
“Recent activities have intensified this inter-insurer activity and resulted in significant subrogation chargeback awards, forcing more insurers to be more discerning in how they pay claims,” Ronak explained.
Ronak talked about seven general objection categories and how to address them.
Asserting that a prevailing rate exists: Any assertion of a calculated prevailing retail rate should be accompanied by a methodology of how that rate was arrived at and that it is “reasonable” based on a shop’s training, facility and equipment investment.
Additional procedures needed or requested: Documentation of all procedures from a database or OEM that need to be performed to restore a vehicle to a pre-loss state along with proof of performing those procedures.
Part type utilized or required: Shops need to verify that a particular part will be functionally equivalent to an OEM part or must be able to afford to accept 100% liability.
OEM recommended procedures: Repair liability is placed on the shop for the quality of the repair. Performing repairs as the manufacturer requires or recommends is the best way to avoid liability.
Confusion over the “cost of doing business”: Clarify the difference between a fixed and direct cost of the repair and consider discussing Generally Accepted Accounting Principles (GAAP).
Repair time justification: Many materials are not repairable and it’s important to understand how to document them when they are not. Focus on creating a standardized methodology to determine labor units.
Cost shifting: Repair paperwork is considered a legal document and the shop is liable for the documentation and actual repairs. Deviations between the final paperwork and physical repairs completed is fraud.
Ronak said disputes are legally between the insured and the insurer. “As contentiousness increases, shops are engaging in the negotiating process more and more,” he said. “Documentation proof of what you assert needs to be done is essential to ensure your client is made whole and you assume the least repair related liability.”
Stacey Phillips Ronak