Ken Schneider, who owns Metro Toyota Scion in Brook Park, OH, with his father, decided they needed to get into the collision-repair business.
“We were losing parts sales and car sales because we were sending our customers who needed collision repairs to other dealerships,” Schneider says. “We needed to close that loop.”
One problem, though. Schneider wanted to get into a business at a time when many dealers were leaving it. Collision repair is a tough business, and profitability has proved elusive for many dealers.
Schneider was undeterred. He traveled the country looking at collision facilities for ideas. He settled on a plan and began implementing it.
“We had our plans and building permits. We had the land and were ready to go,” he says.
Then friend Mike Giarrizzo learned what Schneider was up to. Giarrizzo recently had resigned as chief operating officer of Sterling, one of the nation's largest collision repair companies.
Giarrizzo had this crazy idea that he could revolutionize the way dealers operate their body shops. He founded DCR Systems, a firm designed to help dealers build profitable body shop businesses, and was looking for dealership partners to launch his business.
“Mike asked me if we were sold on our plans,” Schneider says. “He drew this plan for a body shop on a napkin. I was sold. I went back to my office and threw out my original plans.”
Giarrizzo says he became convinced while at Sterling that dealers can succeed in the body shop business. “I believe dealers will want to get back into the business when they see there is a better way,” he says.
DCR Systems brings Toyota's lean manufacturing concepts to the body shop. The firm has a patent pending on the model. DCR broke down each step in the process and then rebuilt the model to create a streamlined and interdependent system.
When partnering with DCR, dealers provide the land and the building. DCR handles the rest. The model requires that the dealer give up a measure of control of the operation. But it minimizes the risk as well as the headache of managing a body shop.
“It is a shared capital and revenue model,” says Giarrizzo.
DCR hires and trains body shop employees and manages the day-to-day operations using the dealer's brand name. The dealer monitors operations through daily reports.
DCR's approach is common from dealership to dealership. “It's FisherPrice simple,” Giarrizzo says. “Everything is the same every time.”
The repair centers are 12,000-sq.-ft. facilities that use a lateral rail system to transport vehicles from station to station, cutting down on exhaust fumes and wasted time. There is no pulling vehicles from one bay and moving them to another.
Each facility can handle three shifts that can repair up to 200 cars a month.
DCR owns the tools and keeps them on mobile boards located throughout the facility. “With us owning the tools, technicians don't have the expense of having to buy them,” Giarrizzo says. “It also allows us to control the process and the quality of work.”
Each technician is segmented into defined tasks and paths for career advancement.
“We want our technicians to build their expertise levels,” says Giarrizzo. “We've learned that taking out the unknown and giving our employees predictable avenues for advancement helps us retain them.”
Schneider is happy with the arrangement.
“It practically guarantees my part sales and means I'll retain more of my customers,” he says. “I fully expect other dealerships now will be sending their customers needing collision repair to me. I bought into the concept because I think it will revolutionize the industry.”