Do you use the “.3” method to plan your shop’s capacity?

Canadian collision shops are usually familiar with the .3, a symbolic indicator in the industry.

What is the mythical .3?

To make things clearer, .3 is the number by which the total number of estimate hours for a repair is multiplied. The result is the number of days during which the insurer must provide a courtesy vehicle for the client. The main goal is to deliver the vehicle before the end of the period covered by the insurer so the shop itself doesn’t have to pay for the courtesy vehicle.

Here is an example: Let’s say the appraiser estimates that a repair will take 23.5 hours. This number multiplied by .3 is 7.05. We then round to 7 and that is the number of days during which the insurer will need to provide a courtesy vehicle. Shops from British Columbia and Quebec are less concerned by this indicator since they usually must provide a courtesy vehicle during the repairs.

Should this indicator be used to set goals? First, this indicator is a product of the insurer. Over time, collision shops from provinces such as Ontario and Alberta have culturally adopted it as a measure of efficiency. By relying on this indicator, some of them have experienced success as far as productivity goes. It is also better to use a capacity planning method than none.

What are the disadvantages? Working with the .3 indicator method to reach the desired performance level can be quite a puzzle. Why reach a higher performance level? Usually to increase productivity and obtain a better cycle time which often translates in the shop’s ability to finish more repairs within a given period. With best practices, this can lead to higher profitability. In shops using the .3 indicator, we often see technicians working on many vehicles at once. This results in more time spent working on the same vehicle. It also creates yard space and cash flow issues since these shops must provide parts for several vehicles at once. A lot of brain work and adjustments are needed to perform in such conditions.

This is why shops that have performance goals and want to reach them through better capacity management will often choose a lean work method, with the closest they can to one technician assigned per vehicle. These shops plan their capacity with a mix of planning per severity (small, medium, large repair) and by load percentage. This method allows to reduce their courtesy vehicles fleet to a minimum while performing more repairs. It also offers multiple benefits such as optimized yard space and improved cash flow while making it easier to reach productivity goals.

Planning with the .3 method is certainly not a bad thing for those who have already tamed the beast or who have a maintenance strategy with no specific production goals. As for those who wish to invest in a productivity and performance strategy, there are easier methods that offer quick success. For such methods, your team’s collaboration and using a tool such as ProgiPlanning are major success factors.