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Improving Inspections

Posted on 02/22/2016

Fed up with faulty vehicle inspection processes, Scott Osborn hatched a new system to hold technicians accountable, which morphed into a business of its own.

STANDING GUARD: Scott Osborn carefully watches over every aspect of his business, which led him on a quest to create an all-new vehicle inspection system. Photo by Korbin Bielski

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.”   

Osborn’s Automotive Finds Profitable Solutions

Posted on 02/22/2016

Aggressive marketing, expanded services, and proper shop management practices prove profitable for Osborn’s Automotive

Redondo Beach, Calif.—Scott “Oz” Osborn, ASE Master L1 technician and co-owner of Osborn’s Automotive, started his automotive career in 1974 at a gas station while still in high school.

“I worked the graveyard shift, cleaning floors, workbenches, and restocking shelves,” he said. “And it’s been all automotive since then, including my first business around 1979, specializing in Sunbeam Tigers and anything for street racing.”

Osborn said he soon learned that maintenance and repair was a far more reliable source of income and stability than the customizing and racing field. So in 1986 he bought the first of four Union 76 gas stations with service bays between Redondo Beach to Sacramento.

“I ran those successfully for many years until 2002 when my wife Nancy and I bought our current location on Pacific Coast Highway, a 1,000-square-foot shop with three bays, and got rid of our last gas station.”

It may be small, but Osborn is quick to point out that there is plenty of parking. “Square footage comes at a premium in Southern California, especially along the beach. I pride myself on making every square foot count and providing quality service.”

Over the years, the shop has had steady growth, with annual sales reaching as much $1.25 million, an increase in car count, and more than 80-percent customer retention.

“Car count is up over last year and so is the average repair order,” he said. “When we switched to Repair Shop Solutions (RSS) electronic online inspections a few years ago, our average repair order was around $425. Last year it climbed to more than $600. That’s almost a 50-percent increase in average RO in just two years.”

Osborn attributes the 15-percent growth in the past year to a number of factors, with quality repairs and outstanding customer service topping the list, followed by aggressive marketing, proper shop management, and expanded services.

“In 2015 we started marketing our hybrid service pretty heavily, which is paying off,” he said. “We took on the name of ‘South Bay Hybrids’ at Osborn’s Automotive and have been using that avenue to push the hybrid services. We even created a second website for it that helps us get the message out.”

The shop is doing some aggressive customer retention initiatives including washing cars, phone follow-ups, free shuttle service, and personal reminders, he said.

Osborn has also changed over the shop’s website to Kukui, which he said has proven to be a huge success in tracking advertising dollars.

“With the Kukui system, we can tell exactly how our ads paid off for us. Their dashboard lets me see how many calls came in from each ad source, listen to the phone calls, and even see if it was a new or returning customer and what they spent. I learned that the money I was spending with one online ad company was a total waste, with zero return. That saved me over $200 per month getting rid of that.”

In addition to using Kukui for the shop’s website and follow-up emails, Osborn decided to take it a step further and do a lot of personal phone follow-up calls and setting of appointments.

“Along with the mileage sticker in the windshield, we just let the customer know that we’re going to be calling them when their car is due for the next service to set up an appointment.”

Recently, Osborn wrote a book for consumers titled ”Making Smart Choices - A Helpful Guide to Maintaining Your Vehicle,” which he said is helping position Osborn’s as the local experts.

“We’ve also expanded our TV commercials. We’ve tried real hard to make them something funny so the viewer will remember them,” he said. “We have two commercials now where I either lick the dipstick or fill a wine glass from the oil pan to ‘organically’ sample the oil and tell them what’s wrong with the car. I guess you just have to see it to believe it. They’re on our website too.”

The shop has been heavily into maintenance for years, but in the past 12 months, maintenance has increased another 10 percent over repair and diagnostic jobs.

“Maintenance is much more profitable than repair and it really is good for the customer,” he said. “If we keep this up, we’ll put roadside service out of business.”

Osborn also believes it’s important to always use the correct fluids and he buys a lot of OEM fluids from either the dealer or a local supplier.

“We use Completes Plus in Gardena as our number one supplier,” he said. “They have been there for me for about 20 years now and I know that if I really need something in a pinch, they’re the ones I can count on.”

Last year at AAPEX in Vegas, Osborn said he concentrated on finding updates for the shop’s six scan tools, including a new Toughbook with Toyota software, as well as making some strategic connections for his software business, RSS.

Osborn’s has been the winner of South Bay’s Best Auto Repair award for five years in a row. It is an AAA Approved Auto Repair facility, a Bosch Service Center, and a member of ASCCA.

Jaime Sanders, shop manager, has meetings with the techs every two weeks to go over their inspections and look at their habits, Osborn said.

“We strongly believe in watching the reports in our inspection system to see which techs are recommending each service and making sure nothing is being oversold or missed.” 

If Osborn sees a technician recommending a specific item such as a brake fluid service more than 40 percent of the time, he knows something is wrong.

“Either the cars really need it and we’re not getting it sold at the counter or he’s recommending it based on false data, like time and mileage, only without checking the physical condition. That doesn’t work in my shop.”