Improving Inspections

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The data spanned several years of his shop’s work—more than 3,000 documented vehicle inspections in all. It sat, stacked tall on his desk, and Scott Osborn began by sorting the papers into piles.

At this point in late 2011, Osborn looked at numbers as the lifeblood of his business. All of the answers to every problem at Osborn’s Automotive—a month-long sales slump or a dip in gross profit margin, for instance—could be traced to some metric.

And Osborn religiously tracked and analyzed those numbers.

It was one of the reasons his shop had nearly tripled its sales over the previous decade, and it was why he spent nearly three days sorting through that pile of inspection forms, trying to find a tangible answer to a burning question.

“I’d been told over and over that I should be able to run my business from a beach in the Caribbean with a coconut drink with an umbrella in it,” he says. “But, at the same time, everyone preaches that getting good inspections from your technicians is the key to success, the key to more sales and doing a better job for customers. Well, how can you know for certain that every technician is inspecting every single car according to your policies? How do you know they aren’t missing things? How do you know they aren’t biased or overlooking things they don’t like doing?”

The answer, Osborn hoped, was sitting in that pile of papers, in all the data collected from every inspection over the previous three years at his shop.

“The idea was to change the way we look at inspections,” he says, “to take it from a subjective thing based on the technician’s biases and skills and make it into something that’s objective and repeatable—and something that we can monitor with ease.”

The Backstory

If you’re simply looking at physical size, Osborn’s Automotive hasn’t changed a whole lot since he first purchased the former gas station on the Pacific Coast Highway in Redondo Beach, Calif., in 2003. It’s a nondescript, three-bay, 1,400-square-foot facility on a busy road in a nice area. And it generates $1.2 million annually in sales.

“It’s small, but we get a lot out of it, and that’s by doing everything through systems,” he says.

Osborn has focused heavily on processes in the last six years, implementing standard procedures for every aspect of his shop and tracking progress daily. His shop, which did roughly $40,000 per month in sales starting out, now regularly tops $100,000.

The Problem

The simple fact of auto repair is that customers don’t know what they don’t know. It’s the shop’s job to inform them. That’s where the inspection comes in, Osborn says.

INSIDE THE NUMBERS: Osborn’s new inspection system found a way to link his shop’s data with his staff’s work habits. Photo by Korbin Bielski

Like many shops, Osborn had a simple inspection checklist for technicians to run through during the process. It broke the vehicle down into categories, such as under hood, under car, safety, etc., and then into tasks like “check fluids” or “check hoses.”

“It was pretty standard,” Osborn says, but it didn’t leave enough room for making full recommendations. Also, when the customer left following the repair, the shop’s copy was simply put in a file, then likely moved to a box, which was then eventually put in storage.

“We had information on these vehicles and weren’t using it to our advantage the next time the customer came in,” he says. “You’re starting from scratch every time.”

So, Osborn set up an inspection file on his shop’s computers. The techs would fill out inspection forms electronically, and the shop could then store them for future use.

That improved the availability of the information, Osborn says, but it still didn’t do anything to improve the accuracy of it.

“The whole time I’m just thinking, ‘This is great, but how do I know the inspections are any good?’” he says. “Sales only tell us if my front counter is doing a good job selling what they found. It doesn’t say whether the stuff was really needed or whether we’re missing other things. So, the problem is: How do I ensure a proper inspection every time without having to essentially do them myself?”

The Solution

It was now 2011, roughly three years after he started keeping track of inspection reports on his computers, and Osborn knew, somewhere inside that data, there was a tangible, measurable way to ensure quality inspections.

He wasn’t going to hover over his techs, and he wasn’t going to just assume things were fine based on sales.

Audits Aren’t Optional
Larry Monroe, master consultant, Management Success!

Auditing your courtesy inspections is vital, no matter how far you want to drill down into the procedure. The inspection line is an important service to all of your customers, yet it is one of the first to unravel in terms of quantity or quality. The metrics need to demonstrate quality, training and integrity of the shop overall. It starts with having a workable form—hard copy or soft—and then an exact method laid out on how to implement it. Your analysis results will always be impacted by the attitude, training and experience of your tech team, which are always changing.

Instead, he pulled up all of his reports and hit print, and he started sorting them. He put the reports in piles for each technician. Then, he organized them by vehicle and looked at what problems technicians were finding.

It took him three days of doing little else but pouring over the reports to find his answer.

“I saw patterns and averages and a way to look at it all,” Osborn says. “By doing this, I could see that so-and-so’s average car was a 2002 with 90,000 miles on it. And I could see what he was recommending.”
More specifically, he was able to see the amount of vehicles that received certain recommendations. For instance, he could see one technician recommended cooling system work on 15 percent of all vehicles—very standard for his area.

“I could see which guys were recommending what work, and how often. I now had a way to measure what their inspections were producing. I had tangible numbers to put with it.” 
   —Scott Osborn, owner, Osborn’s Automotive

“All of a sudden, we have a way to see technicians’ habits over the last three years in the shop,” he says. “I could see which guys were recommending what work, and how often. I now had a way to measure what their inspections were producing. I had tangible numbers to put with it.”

He still lacked a simple way to track it, though.

Osborn used an online program called Active Service Pages to create a Web-based inspection system that could compile the inspection data and turn it into a readable, easily accessible spreadsheet of data. He created an updated inspection form (with added ability to give specifics on issues and detailed recommendations) on the site that technicians filled out with each vehicle. The website then automatically broke the inspections down the way Osborn had by hand.

He now had live, tangible numbers to show his worker’s habits on each vehicle.

The Aftermath

The first red flag popped up instantly. Osborn saw that a technician recommended brake-fluid service on 60 percent of vehicles he inspected—a very unusual number in sunny, Southern California.

His sales advisor was skilled enough to sell the work, Osborn says, but something about that high number bothered him. So, the next time he saw one of those jobs come up in the management system, Osborn decided to peek in and observe the tech’s work on it.

“He wasn’t even doing the whole service,” Osborn says. “He was just draining the master cylinder with a suction tube, pulling the fluid in it and shutting the hood.

“He wasn’t doing a good job for the customer. He was stealing from me. He was stealing from the customer.”

And he was fired on the spot.

Another Level
Monroe, Management Success!

The next major step is taking your “findings” and having the organizational and training skills to fix or improve the situation. This can be one of the most major challenges for shop owners: “tuning up” employees. I know a lot of owners that have statistics and metrics on every detail of their business, but they don’t have the training to address the human element. This is your next major step to success. Scott has done a very good job taking concepts on service and quality and creating a system that works in the real world. That is the important part. You may have all sorts of ideas about how you expect an inspection to be done, but getting your entire team doing it “your way” is always the challenge.

Another time, Osborn saw that his techs hadn’t recommended any suspension work over the course of 75 inspections. After speaking with them, he realized it was a training issue, and in the following few weeks, their numbers were up to where they should be.

“Sales didn’t necessarily change, but the right work is now being sold,” he says. “My guys are now accountable for what they recommend, and it helps us make sure we’re staying up on training and doing the work we need to.”

The Takeaway

Osborn has since partnered with Elite Worldwide Inc. to create an offshoot company, Repair Shop Solutions, to enhance and promote his inspection system.

The lesson Osborn learned, though, isn’t about diversifying his personal business opportunities.

“It just shows how important data mining really is,” he says. “For every situation and every aspect of your shop, it’s so important to measure and look at your numbers.

Keeping a Close Watch
Kevin Donohoe, consultant, Educational Seminars Institute

People and systems are the lifeblood of any business. Steve Osborn did what all business owners/managers should do: evaluate, analyze and implement with an eye toward consistent business improvement. Part of Steve’s success was recognizing the mix of business his repair center offered was not balanced based on what his business goals and objectives were, and he took appropriate steps to correct the condition. He developed training and tracking solutions and trained his entire staff for success. I applaud Steve for his dedication to his clients, community and staff. It’s success stories like Steve’s that make me proud to be in this industry.

“Every area is going to be different, as far as your percentages (of work found in inspections). That’s why you have to keep track of everything, and be on top of it all. The more tangible data you can have to look at your operations, the better and more efficiently everything will run.”   

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