Is there a better way to execute car projects

[ironworks]

Originally Posted by Munssey

Ironworks, Blake, Ron... Excellent points!

Communication, communication, communication right?

One thing I try to constantly remind myself to run like a checklist is the communication to customers on how this process will go, what is expected of them by when and what exactly we will be doing so they can get the understanding that it's an involved process.

So this might be a good conversation for this topic. Best practices to keep project management and the discipline to run it like a business instead of a hobby. I'd love to hear what others think should be\ not be in the list from either an owner\ operator or a customer's prospective.

Three documents that I find are life savers but take some discipline to use and I have had to evolve into what I use today:

1. Written Detailed Estimate of Work (to outline all the details discussed before hand). Not just 'build part x' but build it for this customer, using these materials and then amend with a start and estimated end date when possible after timing has been agreed on and the Estimate turns to a contract. I am not only surprised by how many shops dont do this but am uncomfortable when I have work done and they do not supply me with this as a customer. I always feel like a surprise is in my future and make it a point to connect with the manager of the project so they know I really appreciate knowing of changes up front instead of waiting until the end and get hit with it. I'm a big boy, I can take bad news... just less gracefully if it's at the end when the bill shows up.

2. MOU (Memorandum of Understanding) I explain this as the 'rules to the game'. Since Monopoly can be played different in every household, it's best to agree on the rules before the dice are rolled. That's usually where we discuss what is expected of the customer as far as engagement, payment schedule, how to access their customer page for project updates and... the change orders (which is #3).

3. Change orders - If something changes from the written detailed estimate that was signed, it must have a change order stating what changed in work, time and\ or price. Very simple to do, and cheap insurance for the customer to make sure they understand and are happy.

Does anyone agree? What else is there that might compliment or even replace any of these?

Learning hat is on.

So my question is who pays for the Written Detailed Estimate? Our main customers would tell me just to get to work and communicate with them as the process unfolds what is happening. I talk with customers as much as they want and open the door for the dumbest questions, Because if its a question for them its not dumb. They need to understand the process and they have to see they are being treated fairly.

How can you expect a guy to give a spot on Estimate on a project of this precision when the can't build air craft carriers or bridges on time and exactly on budget?

We are working on 55 Chevrolet and we put a new quarter panel on one side and not the other. I now know it would have been much less work to have put a quarter panel on both sides due to the stamping differences from the original quarter panels and the repo unit. It was a major visual difference. MAJOR. How do you budget for that? Whose fault is that? We are hired to build perfect cars with very imperfect parts that are marketed to Just bolt right on cars that were not perfect when new and perform perfectly. And just because a parts fits perfectly on one car does not mean it will fit perfectly on the next car.

The biggest thing I have learned is you have to be able to charge a customer a fair amount of money to be able to keep the ball rolling. You also have to take your licks when you screw something up. No one builds everything perfect every time. The way to win a customer is with integrity and knocking money off the bill with out them asking because you screwed something up does that.

The only way to fix a lack of communication is with the communication the customer wants and needs to hear to understand. But you can explain it to them all day long and it does not mean they understand you, even if they say they do.

[FlameBroiled]

This Thread needs a Like Button!

[SSLance]

I've always thought of the car building industry as being pretty similar to residential contractor\remodeler work.

When bidding for remodel jobs one has to take into consideration hidden "gotchas" that will pop up behind the old sheetrock, likewise a car builder has to be prepared for gotchas behind paint or parts not fitting as intended. One also has to work with change orders, like the customer not liking a new wall once it's put up or new parts purchased and minds changed mid build on a car. At the same time, the contractor\car builder has to be careful to not price themselves out of the market before they even get the job.

Whereas new home construction can be very different. I recently helped my MIL buy a new house in FL in a pre-planned community. This subdivision was completely planned out, down to the trim color on each and every house in the subdivision...well before the first pile of dirt was ever pushed. I've never seen anything like it before.

This approach to home building is very similar to what is being discussed in this thread, but it leaves very little wiggle room for changes and everyone involved has to stay on pace and deliver what they promise in order for it to work. I don't know the numbers but I can imagine that volume purchasing and pre-scheduling greatly affects the margin in this type of product and surprises are kept to a bare minimum since everything is so planned out before you start

I'm not sure how you integrate new building policies and procedures into a remodel type industry, but I'm watching to see the ideas bantered about. There has to be a way to do things better than currently done at a lot of shops I'm sure, but I'm not sure it gets to the totally pre-planned approach before the building ever starts.

[Kurt Penner]

Great insights. We use an excell spreadsheet thing as well that I developed after a pointless search for something that was simple enough for a gearhead to use, but flexible enough for the constantly changing scope of work on some projects. Helps alot, but like has been said, if you actually show the whole thing to a prospective customer, they get scared.
Part of the planning problem too is that it is very time consuming [expensive] Doing it before the project is approved can mean tons of time down the drain if the customer gets scared, not doing it makes it really hard to be fair to someone asking about the cost of a project.
How detailed do you guys get on your invoices. Is time broken into segments? We do a list of stuff accomplished this week and a total # of hours. I keep pretty good individual record for in house but don't show it to the customer. It's sort of like the 2 week sprint but customer sees stuff in writing every week after it's done.

[68Cuda]

OK... having just put my car through the modification / body / paint mill I want to make some remarks from a customer perspective.

Originally Posted by Munssey

1. Written Detailed Estimate of Work (to outline all the details discussed before hand). Not just 'build part x' but build it for this customer, using these materials and then amend with a start and estimated end date when possible after timing has been agreed on and the Estimate turns to a contract.

Oh, I wish... never found a shop that was willing to do this in three years of looking. I could not find ANYONE willing to give me an actual written quote. One shop I visited the owner told me not to visit unless I called in advance because he may not be open if he had something to do that day, had no idea how long it would take, and had a car that he stripped six months previously sitting off to the side without any primer on it. Best I found was "as long as you keep up with the bill we keep working on your car" and "just stop by occasionally so we can discuss the next step, otherwise I do what I think you want" combined with the fact that I visited the fabricator who was actually working on the car and took him out to lunch once to make sure he understood what I wanted because the boss would tell him something else. Either he sometimes got customers mixed up or the two of them had communication issues. The fabricator started texting me questions occasionally when something the boss told him did not sound right or did not sync with what I had told him. My final choice on this shop was made seeing some of the completed work, talking to a few prior customers, and observing the shops practices. I took the "personalities" of the owner and the tradesmen involved in to account also. Overall one of the better places I visited, was relatively close to home and work, and I had a good level of confidence I could get the car back in less than a year.

Originally Posted by Munssey

2. MOU (Memorandum of Understanding) I explain this as the 'rules to the game'.

See above comments...

Originally Posted by Munssey

3. Change orders - If something changes from the written detailed estimate that was signed, it must have a change order stating what changed in work, time and\ or price.

Once again...

Originally Posted by Kurt Penner

How detailed do you guys get on your invoices. Is time broken into segments? We do a list of stuff accomplished this week and a total # of hours.

One of the things I liked about the shop I chose, they had a folder for each car, written inside the folder was a daily number of hours billed. All receipts were kept in the folder. I paid about two weeks ahead on labor. I could come look at the folder anytime I wanted, and whenever my balance approached zero I would write another check. The last two weeks I let them run negative and I paid the balance on delivery day.

Originally Posted by ironworks

Customers cash flow - This has no relation to the the depth of the customers pockets. This has to do with the urgency of the customer to pay for the agreed bill during and at completion of the project.

I think about half the customers I saw during the 9 months my car was in the shop had this issue. The boss had to stop work on their cars or at least threaten to do so occasionally. I actually gave him permission to slow down on my car to get other small, paying jobs out as long as he did not come to a complete stop on my car. I knew mine was going to sit for periods of time after it got home so I was not in a big rush.

Originally Posted by ironworks

Project Creep - Customer wanting more and more from the initial project scope. And after the project was torn down or fit up work really begins, finding parts don't fit like they should. Or the car had more bondo then was expected.

I think this happened on a majority of the projects I saw... the extreme was the car that came in for a few minor touch ups and left with an LSA and a paint job.

Originally Posted by ironworks

Flaky vendors - Outside vendors with parts or services that that don't do what they say.

Yes - constantly, and you Chevy guys have it good! I pretty much expect any work, part or restoration detail work to take at least twice as long as quoted and then need to be significantly modified to fit the car. Even "off the shelf" cylinder heads from Edelbrock which I ordered in June and received in October were only supposed to take 3 weeks to get. I almost fell over in shock when a K-frame I sent to have modified and powder coated arrived sooner than expected and was done exactly as specified!

[glassman]

Its always "in the details". I think time in=experience. I've always said "hard work= good results", even in financial faiure, if you were sincere in your heart, you've still gained invaluable experience.

Tommy Silva of "This Old House" fame, said "when you build a house there are 7000 things you need to know, when you rebuild/remodel a house there are 70,000 things you need to know".

Backing into a relm of variables brings an unknown, remodeling as opposed to building new. Houses and contracting are much more expensive, but man hours are man hours, however, a much more appreciatory asset, so there are more rewards. Rebuilding a car is very similar to rebuilding a house, but the house will probably go up in value...

I love building, whether its housing or automotive, "if you find something you love to do, you'll never have to work a day in your life", but then the business gets involved.....and that gets tricky. Every customer is different,, every job is different, Us leaders are "supposed" to be flexible, and i don't know how to bend lol.
Great topic, love listening too the different opinions on how we do things.....

Hope some of this makes sense.....

[robnolimit]

Great thread !I agree with Ron 100% about the labor rate, but custom shops may be forced into it, so to speak.
If you walk in the dealership garage, you see the newest diagnostics computers, top quality equipment, skilled and trained (ASE) techs, who have made major investments in their own tool sets. The training and equipment gives them the ability to get something done in an hour. Like wise, the investment these techs have made in them selves demands a higher pay scale. The dealership has to charge a rate high enough to cover these costs, but, the customer gets the job done right in a timely manor.
Now walk in to many Hot Rod shops, and you may see a welder or two, a few old tool boxes, a drill press and a grinder, ..... It's also quite common that t he employees here have had little or no formal training, and have made little or no investment in their own skill set and future. In effect, they are not acting in a "Professional" manner. They do not get much done in an hour, and they labor rate suffers in turn.

I know that this is not all shops, but many of you would have to agree that this setting of a Hot Rod shop is the most common, and that the Professionally run shops are a rarity. Management is the key, and for the long term, we have to look at the management of our industry as one area that needs help, a lot of help. Have a great day guys.

[RDuke]

A lot of great items for execution and operational challenges are already listed so to add to the conversation I'll focus a little more on the business strategy.

If you look at the auto repair business (mechanical, paint, etc.) the business models are similar in the general strategy. They attempt to streamline the processes or areas of expertise. Diagnose, repair, repeat. The goal is to just like a restaurant in a lot of ways. The more turn over they can manage in a given period the more revenue they can bring in. Streamlining the process can help control costs, reduce process time, and increase the bottom line / allows them to operate in the black. The best general managers / owners are the ones who can manage to the model and manage the execution/operational challenges already listed.

The business model for a custom car shop is by it's nature an inefficient processes. Each car is a one-off build requiring multiple sets of talents (metal fab, paint/body, wiring, plumbing, interior, engine/mechanical). As your business becomes more specialized or less streamlined your costs increase which drives up your prices. If a auto repair hourly rate is at $110-$140 having already built in the efficiencies into the rates then your custom car shop would be much higher. This rate is a basic calculation: Annual (Overhead (rent/insurance/etc) + labor + parts + marketing/advertizing + unexpected overage ratio + profit percent) / (Number of units (cars) per year). With your cost per car baseline you can then figure out your hourly rate by dividing your available labor hours by number of units per year, then divide it by the cost per car.

Many of the successful shops I believe started on a shoestring approach with one or two people who had a wide variety of talent sets required. As they were able to build a customer base they quickly compartmentalized the build process as quickly as possible to streamline and reduce build time. You see this with many of the successful shops though you may not recognize it. There are designated areas and resources for each step of the process.

I believe many of the unsuccessful shops failed because they never moved beyond one or two people trying to do everything. If you are a two man shop your cost per hour has to be extremely high in order to break even and keep your doors open. As a customer, would you pay double the rate of a national know/name build shop to support your local builder with 2 resources? Probably not. The only caveat here I can think of is the retired/hobby shop owner who does it out of 'fun' with the sole purpose of trying to stay out of the red at the end of the year while having fun in the process.

As a business model the custom car shop is something you really would never want to invest in. The most successful shop isn't going to bring in more than a few million at most for the owner, it's not replicable (you can't easily franchise or open multiple locations due to the highly skilled talent required), and the market of people who want a custom car is very small and of those who can afford it it's even smaller.

Hat tip to this thread being started.

[ironworks]

Originally Posted by RDuke

A lot of great items for execution and operational challenges are already listed so to add to the conversation I'll focus a little more on the business strategy.

If you look at the auto repair business (mechanical, paint, etc.) the business models are similar in the general strategy. They attempt to streamline the processes or areas of expertise. Diagnose, repair, repeat. The goal is to just like a restaurant in a lot of ways. The more turn over they can manage in a given period the more revenue they can bring in. Streamlining the process can help control costs, reduce process time, and increase the bottom line / allows them to operate in the black. The best general managers / owners are the ones who can manage to the model and manage the execution/operational challenges already listed.

The business model for a custom car shop is by it's nature an inefficient processes. Each car is a one-off build requiring multiple sets of talents (metal fab, paint/body, wiring, plumbing, interior, engine/mechanical). As your business becomes more specialized or less streamlined your costs increase which drives up your prices. If a auto repair hourly rate is at $110-$140 having already built in the efficiencies into the rates then your custom car shop would be much higher. This rate is a basic calculation: Annual (Overhead (rent/insurance/etc) + labor + parts + marketing/advertizing + unexpected overage ratio + profit percent) / (Number of units (cars) per year). With your cost per car baseline you can then figure out your hourly rate by dividing your available labor hours by number of units per year, then divide it by the cost per car.

Many of the successful shops I believe started on a shoestring approach with one or two people who had a wide variety of talent sets required. As they were able to build a customer base they quickly compartmentalized the build process as quickly as possible to streamline and reduce build time. You see this with many of the successful shops though you may not recognize it. There are designated areas and resources for each step of the process.

I believe many of the unsuccessful shops failed because they never moved beyond one or two people trying to do everything. If you are a two man shop your cost per hour has to be extremely high in order to break even and keep your doors open. As a customer, would you pay double the rate of a national know/name build shop to support your local builder with 2 resources? Probably not. The only caveat here I can think of is the retired/hobby shop owner who does it out of 'fun' with the sole purpose of trying to stay out of the red at the end of the year while having fun in the process.

As a business model the custom car shop is something you really would never want to invest in. The most successful shop isn't going to bring in more than a few million at most for the owner, it's not replicable (you can't easily franchise or open multiple locations due to the highly skilled talent required), and the market of people who want a custom car is very small and of those who can afford it it's even smaller.

Hat tip to this thread being started.

Agreed.

Plus in the custom car world your trying to give each car a different personal feel for the owner. In auto repair, you just fix it properly and send it down the road. There is no personalization or emotion in the process. It's either fixed and working or its not.

The simpler and less custom you make each build the more you can scale that business model. The is no way to scale the high end side of the custom car world. The bigger the scale the less options. Until pretty soon your considering a Shelby Mustang custom.

[Munssey]

One point that may help in other's considerations of what recipe might work to formulate a better way to execute car projects is to repeat a pretty good summary of application for the Project Management Book of Knowledge (PMBOK) that I once heard.

If you think of the PMBOK as the Bible and a particular project as a different religion you apply the 'Bible' to. For the most part, the essential pieces remain the same but you pick and pull what will work best from the PMBOK for that project. A different project may require a different 'religion'.

Once I realized that it's more of a dance than a science it made it easy to say were not using X for this project because it doesn't work. Lets try something else out of there.

I think back to managing large IT projects and how the different groups called for different approaches (although the MOU, SLA, Burn-down charts and Sprint backlogs still had to be worked every week) to get everything done.

Infrastructure and platform-as-a-service teams worked best when we applied a large amount of project management. An easy parallel would be your large car maker's assembly line processes. Cookie cutter and lots of checks and balances involved. I think this side of the industry is where we mostly get frustrated with pushed deadlines because hanging new fenders and doing a respray should be pretty straight forward for a professional. I ***think*** this may be the side of things where we could best focus on some good best practices for our industry. They are there but not enough of the smaller shops observe them.

The Web development guys who did front end graphics... oh no, no, no... those are your artists and they'd subconsciously push back on regulation of time and deliveries to the point of being in serious risk of their jobs with as much methodology as applied to the other groups. They were artists so creativity had to flow in a less regulated way some times. This is where maybe most custom car guys are (half of me SO identifies with this group). Creativity is not inspired by a work breakdown chart and a Monday morning due date. Other methods much apply to these types of crafts which makes it very difficult to manage as a project. I think this side of the industry is where we mostly understand and don't get frustrated with pushed deadlines.

Originally Posted by ironworks

Agreed.

Plus in the custom car world your trying to give each car a different personal feel for the owner. In auto repair, you just fix it properly and send it down the road. There is no personalization or emotion in the process. It's either fixed and working or its not.

The simpler and less custom you make each build the more you can scale that business model. The is no way to scale the high end side of the custom car world. The bigger the scale the less options. Until pretty soon your considering a Shelby Mustang custom.

Your point is very valid and brings up a good consideration to applying the execution of car projects (or any parallel trade) which is technical break\fix vs. Customization.

From what I've read so far, we mostly all agree that simple things like paint repairs, engine swaps, Audio installs and interior projects with little customization are more predictable and therefore could lend to be managed using more project management methodologies.

Managing full custom builds that are WAY off the beaten path becomes much more challenging to do and nail the landing on completion dates because we're talking about artists, inspiration, exploration of 4 things that don't work to discover the one that does, etc. Not to say that a good system in place cant help but would create a pretty big paper trail in change orders and resetting commitment on completion dates.

I also want to be the fist to call myself out to say that this is much like discussing diet and exercise: I have some experience in doing it good and also in doing it bad and I fight that challenge every day along with everyone else to get better. I want to run an amazing operation but know that it only comes by going to path of good > great > excellent > amazing.