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Qualification and Certification

At the May meeting of CCIF in Toronto there was the start of a revival of the discussion around Certification. It was not on the agenda and the conversation started in the halls but it did make its way into one of the panel discussions. The discussion did not go into much depth but the most important step was the acknowledgement that there was an elephant in the room.

To this point we have been mixing the two quite different things of Qualification and Certification into the same category. Qualification is based on the capability a repair facility, its equipment and people. It can be earned based on the right current equipment, the right current training, the right systems in place and the right demonstration of customer service. Qualification should be given by, to use my favorite word of this week, a ‘disinterested party’. Disinterested does not mean uninterested or uncaring. It means that party has no stake in the outcome. The outcome will be fair, but the granting authority has no financial or competitive stake in the granting, or not, of the qualification.

Looking outside the collision repair industry a good example can be found in electrical services.  A very important difference between electrical work and collision repair is that all commercial electrical work requires technician licensing. A company cannot present themselves as Electrical Contractors without having government licensed electricians on staff. No outside agency or business can provide this licensing or qualification.  It is provided by a ‘disinterested’ government agency and without this license an electrician cannot work.  There is not a lot of confusion among the consumers about the legitimacy of his work as he has been licensed by the only authority allowed to provide that license.

Private companies can then choose to certify any of these licensed electrical contractors to work with their products. As an example Eaton has an Eaton Certified Contractor Network.  Eaton has not issued licenses that are an alternative to mandatory government licensing but has selected companies and individuals from within the existing licensed pool. This inclusion in the network will likely imply that these electricians may be more efficient with Eaton products, or it may be more of a marketing or administrative function.  The electrician with Eaton certification may have technical, or marketing, or administrative advantages, but there is nothing in that certification that diminishes or takes away from the electrician who has chosen not to join the Eaton network.

In Canada, this is where the CCIAP (Canadian Collision Industry Accreditation Program) could serve the same purpose as government licensing.  The program is administered by the AIA, but the AIA does not profit by more or fewer shops, it has no stake in where those shops are, and it has no business affiliation with qualified shops.  A consumer will know that a CCIAP facility is operating within industry standards, with current equipment, well trained staff and a proper business structure.

Certification by OEMs or insurance companies is a different thing entirely; the basis for certification by an OEM has a tremendous amount of marketing included and there are a range of financial interests in that certification.  The choice of facilities that an insurer would prefer to work with is also very market and administratively driven.

Vehicle owners are bombarded with information about the virtues of the OEM Certified or insurer approved facility but are not told what criteria were used for including a facility in the program or leaving it out.

If insurers and OEM certification programs selected only from the qualified pool of shops in the CCIAP system the consumer would know that these choices have reached a high base level and will be able to do the right repairs. But they will also know that the CCIAP shop without outside OEM or insurer certification will also be able to provide fully capable and professional repair.

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Safety, Competition, and Money

As I have stated before in these pages, and countless other people have said in the past, money drives everything. This does not at all mean that actions with an eye on the dollar are unethical. What it does mean is that money is a mandatory component of all business activity and actions taken have to be based on that reality.

Awareness of and readiness for the right things is mandatory for long-run success but a rush to those right things, moving too quickly ahead of your competitors, can be very financially damaging. The balancing act in timing actions requires skill and nerve.

Going to my favorite source, John Heuter at RDN, there was an article on March 27th about the Boyd Group and its investment in equipment.

Brock Bulbuck, Boyd CEO and a solid and well-respected member of the collision repair industry, was quoted as saying “These proactive investments will position us to meet anticipated market needs.”

An analysis of the numbers spent based on the number of locations suggests that they are spending a good amount of money, probably more than most of their competitors.  Boyd recognizes the rapidly changing environment and the importance of safe repairs. The next day Bulbuck was wearing a seemingly very different hat.

In this article, he is talking to investors and explaining the performance of Boyd over the last year.

He stated that insurance company relations were very important to Boyd and they had maintained excellent relations with their DRP connected insurers. Insurers care about metrics and Bulbuck said the three most important are cycle time, CSI and severity. Reducing these terms to honest language, the faster and cheaper you can get it done the higher points you will score with the insurance company.  If you keep the customer happy you will score more points. None of these metrics give any weight to safety; cycle time and severity will suffer from the time and cost of these repairs.

A dealer calibration will add a few hundred dollars and a day or two to cycle time. The correct OEM mandated replacement of a damaged rail section will add hundreds of dollars of cost, and another hit to cycle time. The car owner doesn’t know much about how their car was built and how it should be repaired so if they get it back clean, shiny and as scheduled they assume it has been fixed right and on time they are happy. This uninformed happiness is a poor substitute for true quality control.

So why is Boyd buying the equipment if all it seems to do is get in the way of the important metrics? The answer to this is in Bulbuck’s quote with the words ‘proactive’ and ‘anticipated.’ Boyd is very aware of the need for safe repairs and they are in line with many other progressive operators in rapidly moving toward these safe repairs. It will not be, for Boyd or anyone else, a one day switch from past practice to best future practice.

For the best operators, it will be an honest and accelerating transition to these best repairs.  Progressive and intelligent operators know that they are to some extent ahead of current metrics but they also know the metrics will shift and the hard work of preparing of this needed change will pay off.  Balancing this with the need to stay alive in current market conditions is the skill and nerve part.

The participation of a large operator like Boyd in this move to best repair practices is a positive sign and will help all progressive operators…

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September 2016 Revisited

A short update on the posts of September 2016 is that they are all still valid, with no significant changes yet evident. I believe that there is work in the background and these significant changes are closer to the surface than they were last year, but for now they are still beneath the surface.

Next Accident Ready Leadership still faces the challenge of competition between many parties. The insurance companies and OEMs have not reached any agreement and at the shop level the flat rate technicians, with the ready ability to move between employers on a moment’s notice compete with owners on the quality of repairs and the time needed for these repairs. That owner is also competing with the shop down the street, which is keeping its customers (and insurance companies) happy with shiny cars and on time delivery ‘Fixing them All Wrong’.

Several of the September articles talked about technology and vehicle complexity. The issue that can be added to these posts now is the unwillingness or inability of the industry to accept the training required to use the equipment needed to do these correct repairs. Facility owners are buying the equipment needed to achieve certification, but are unable to train their employees. This inability to train is a direct result of being Stuck in the Past with the Future Looming and the need for new business models A New Business Model for the Repair Side.

Another topic last September Collision Repair and Certification has seen some changes in the past year, but there is not yet any clarity or true focus. This was covered again in two posts in December ‘Certification- Muddying the Waterson the 9th and Certification-Another View a Week Later on the 20th.

The changes since these posts were written are incremental, but the focus is not much clearer. In an undated news release on the CCIAP website it was reported that the over 1,000 shops nationally had registered for the CCIAP program in the first six months, which may have been in early spring 2017. This was due in a large part to the requirement by Economical Insurance, stating in a December 22, 2016 article on the CCIAP site that they would only work with accredited shops. At September 27, 2017 only 46 shops of these 1,000 registered facilities had achieved accreditation.

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Vehicle Owners and Repair Complexity July August 2016 Posts – Revisited

At NACE/Automechanika in Chicago I had a hallway conversation with a knowledgeable and interested industry participant. He referred to the Mary Barra comments I had quoted at the start of this project in 2016. He did not remember when she had made these comments and he used 10 years where she had said 5, but it does indicate that awareness of change is building.

The second post that appears in July of 2016  was lightly edited in January of 2017. Since that time there has been slow change in the right direction, but to a very large extent the situation described a year ago still holds; if the cars looks clean and shiny and drives well everyone is happy. What this means is that the 5 years needed to get to the right place has now been compressed to 4, with not a lot happening since mid-2016. This is a lot shorter than the 10 that my colleague in Chicago had been thinking.

Looking at the RIOO post of August 31 again not much has changed. The consumer continues to be busy with all the other (in most cases of more immediate urgency) concerns in his or her life and as a result there has been minimal engagement on the part of the car owning public. In this vacuum the major players in the repair industry are still continuing to compete and protect positions; they have not yet reached a significant level of collaboration.

It is starting to look like it will be the vehicle manufacturers who will take the lead in educating the vehicle owner about safe repairs. One challenge for them will be working with insurance companies to come to an understanding of safe repairs. In March 2017  I had commented that the OEMs were not helping their case by sticking to procedures that are more market and lawyer driven, rather that safety. Examples of this were the use of OEM used parts and the repair of wheels. At one of the 2017 NACE sessions wheel repair was brought up as an example of OEM overreach

The other two August posts (Honda Civic Cutaway and the How and What of Repair) , related to the complexity of modern vehicles and could have been written this month; not a lot has changed in the overall market. There have certainly been some improvements, but the industry has made very little movement toward acknowledging the need for specialization and at NACE two weeks ago  a presenter still talked about  ‘seeing what it looks like after a pull’  which is very outdated thinking to be coming from a presentation podium. There were also casually tossed out comments about what the information the estimator needs to pay attention to, but no discussion of the time and training involved in getting at this information.

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RFINA One Year Out

The first posting on RFINA was in July of 2016, with brief comments supporting the views given by Mary Barra of GM in an article from The 2016 World Economic Forum. 

The statements made by Ms. Barra are as relevant now as they were a year ago, and even more so because we are one year further along in vehicle technology evolution.

At this one year mark of the RFINA project it may be of value to go back over the other articles posted over that time to check their current relevancy and validity. Progress made, or not, on the issues will also merit comment.

This week the NACE/Automechanika Conference in Chicago will bring together leaders in the collision repair industry and I expect that new and current statements and announcements will be coming out of that conference.

It will be more effective to wait until after the conference for a review of RFINA to date and the one year review will start in August.