There is no simpler truth in the auto rental industry than “rental car revenue is predicated on rental car availability.” No one understands this wisdom—or pressure—better than the commercial fleet managers chartered with the daily maintenance and damage repair of tens of thousands of rental vehicles. These multi-tasking pros experience firsthand the mantra that each day a vehicle is down is a day of lost revenue.
So what would you, or your damage manager, say if you could eliminate a full day of a vehicle’s collision repair without adding incremental overhead or expense?
To achieve this goal, car rental companies have been using an online software program called CollisionLink from OEConnection for the electronic ordering of original equipment (OE) crash parts from participating dealership suppliers.
The Goal: Cut Vehicle Idle Time
Jerry Bernacki is vice president of vehicle maintenance for Avis Budget Group. Responsible for the maintenance and repair of more than 350,000 Avis Budget rental vehicles that generated more than $4.7 billion in annual revenue in 2008, Bernacki knows the relationship of vehicle downtime to lost revenue.
Avis Budget, similar to other rental vehicle organizations, outsources its collision repair to participating body shops while retaining management of the damage evaluation process. On any given week, Avis Budget’s 102 airport damage repair facilities each manage a complex web of parts availability, vehicle drop-off and pick-up and repair due dates for 100 or more inactive vehicles spread among 10 to 15 body shops.
Relying on phone and fax for shop communication, Avis Budget personnel generate the estimate while body shop personnel typically order the parts upon vehicle pick-up. As a result, a damaged vehicle could sit idle—with the clock ticking—for more than a day before the required parts arrive and repairs begin.
Online Technology Transformed Booking—Why Not Repair?
From Bernacki’s perspective, there had to be a better way. Online technology had already revolutionized the entire car rental experience, so why couldn’t a similar process be used to automate the movement of “Collision Part A” to “Body Shop B”?
Bernacki realized this possibility with electronic parts ordering. In October 2006, Avis Budget implemented a pilot program to test the use of electronic ordering as part of the company’s damage estimating process. Selecting CollisionLink, Avis Budget estimators began the experiment.
Critical to success was CollisionLink’s ability to integrate with Avis Budget’s existing estimating systems. This allowed damage writers to create the estimate as usual, and then automatically create the electronic parts order by pulling over such key information as the receiving body shop and the vehicle unit number.
After a review of the order, estimators would hit one button for electronic submission to their participating dealership suppliers. These suppliers would then receive the order, fulfill it and return electronic confirmation. This was done without picking up the phone to ask a question, verify handwriting, or validate a part number. Avis Budget estimators now had up-to-the-minute order tracking with documented confirmations.
One Full Day Saved
And shops had their parts faster. CollisionLink also helped to reduce incorrect parts and order supplements, both hidden killers to cycle time, by automatically error checking each part against the Vehicle Identification Number (VIN).
Within 60 days, the pilot results were in. CollisionLink saved one full day in repair cycle time. “The impact was undeniable,” says Bernacki. “It saved a day’s cycle time and made our estimators more efficient; and there’s no cost to Avis for use of the software. Instead, dealership suppliers fund the program, making CollisionLink fast and simple to implement.”
Fred Cunha, damage manager at the Boston facility of Avis Budget Group, says he saw a dramatic improvement in cycle time once he started electronically ordering collision parts directly from participating dealership suppliers. His facility once averaged a four- to five-day cycle time; it has been reduced to two to three days. By ordering the parts electronically, Cunha’s staff is more organized and in better control of each repair. Equally important, his staff now has electronic documentation on each step of the ordering process, which helps to make repair management more automated and efficient.
“With our cycle time reduction, we are achieving our ultimate goal of cars on the road sooner,” commented Cunha. “Electronic parts ordering simplifies the entire process, which saves my staff at least five minutes per estimate. This really adds up when you’re estimating 60 to 100 cars weekly. Bottom line, I’m able to do more with the same manpower.”
Miguel Luna, damage manager for the Los Angeles Avis Budget location, agrees. Servicing greater Los Angeles, his staff handles 250 inactive vehicles per week, 50 percent of which require some sort of collision repair. Outsourcing to more than 35 local body shops, Luna readily embraces electronic ordering.
Today, his shops are consistently receiving the parts before the vehicle even arrives. “Shops are beginning repairs faster,” says Luna. “Due dates are met or accelerated. And my idle percentage stay slow.”
Better Tools to Manage Shop Accountability
The Hertz Corporation has also adopted CollisionLink electronic parts ordering as a part of its damage repair facilities’ standard estimating procedure. Currently in use by 88 Hertz airport locations nationwide, CollisionLink has replaced its traditional collision parts ordering methods of phone and fax.
With CollisionLink, Hertz estimators now have instant access to a time-stamped electronic audit trail complete with parts ordering detail, dealership confirmation and order delivery dates. Shops can no longer use parts availability, or delayed shipments, as an excuse for missed due dates. Instead, shop communication is streamlined and better controlled at a time when the rental car industry is increasingly challenged to handle the same volume of vehicles and accident rate with fewer personnel.
From Independents to the Major RACs
“Regardless of whether you’re a nationally franchised organization with hundreds of locations or a single, independent location, the dynamics of the rental car operation are the same,” says Mark Tomasetti, vice president and general manager, Collision Solutions at OEConnection. “To maximize vehicle revenue, you must maximize vehicle uptime.”
Dealership suppliers also welcome electronic parts ordering as a means of saving time and speeding fulfillment, according to Tomasetti. Electronic orders are automatically validated against the VIN, which flags incorrect or incomplete parts and allows counter personnel to more quickly and accurately process the order.
“Given these time savings, it is the dealership supplier who funds the cost of electronic parts ordering,” adds Tomasetti. “So rental car operations incur no additional cost, only savings.”
One Day of Downtime: $100
While it differs by rental car concern, on average, a day of downtime is $100 in lost revenue potential. Given the growing pressure on greater operating efficiencies, why would you tolerate an additional day of repair downtime if you didn’t have to?
The good news, according to those who use online software for parts ordering, is that you no longer have to.
In his 20-year automotive career, Bill Lopez has held positions within the insurance, collision estimating and auto refinish sector. Lopez currently serves as OEConnection’s business and product development manager for the collision industry.
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