Posts Tagged tpa

“Follow-up” Interview with Sika Corporation’s John King (who is retiring)

John King is retiring this year as the Vice President – Aftermarket at Sika Corporation. In his role at Sika John has been a key influencer in the auto glass repair and replacement (AGRR) industry both in North America and the world. I wanted to get John’s thoughts on the industry prior to his retirement and he agreed to talk.

JK head shot 3

Thank you for taking the time to talk again John. I know that you’re going through some changes in your life. You saw an auto glass installation for the first time in 1997 and a lot has changed since then to today. As you prepare to depart an active role in the AGRR industry can you tell us your view of the state of the industry as it relates to the safe installation of auto glass?

            John King:  For Auto Glass Retailers that continue to provide their Customers with Safe and Cost Effective Glass Replacement and Repairs, the future is bright, as there will always be a need for quality work.

Do you feel that there are more safe installations done today for consumers versus when you first entered the industry in 1997?

            John King:  Statistics like this are difficult to define, as it becomes more of an observation and opinion, than fact based.  However, Economics always drive business decisions, and unfortunately, for the Auto Glass Industry, the Economics of today are much more stressful, than in 1997.  For a number of reasons, the size of the Replacement Industry has shrunk over the past 7 years, resulting in a competitive climate that has far too many Glass Shop Companies and Independent One-Off Installers making Installation decisions based solely on the Revenue then need to survive.  When that happens, Safe Installations take a back seat, to getting the job done cheaply.  While “cheaply” does not necessarily mean incorrectly, it can mean that shortcuts in an installation may occur; “Slipping the Cowls, Short Urethane Beads, Incorrect Use of Priming Systems, No use of Priming Systems, and Not Holding the Vehicle until it is safe to Drive, are all symptoms of an unsafe installation”. 

            Unfortunately, I still believe that far too many Installers sacrifice a Complete Job, for a Quick Job.  Therefore, my answer is that today, that are still far too many unsafe installations being done. 

            On the bright side, those Shops and Installers that are doing a Complete Job, have vastly improved since 1997.  There is more adequate training available today, and for quality installers, who have kept up with training, and who are using the latest technologies of Urethane and Installation Equipment that better equip the Technician for making a Safer Installation, they are light years ahead of the best installs of 1997.

Do you think more needs to be done to ensure that replacements are being done correctly and are there any further steps you feel should be taken to ensure that auto glass is installed safely?

            John King:  No one likes or wants Government Intervention.  However, unless the Industry takes it upon themselves to collectively raise the “bar of performance” when it comes to proper installations, it will only take a high profile auto glass installation related death, to raise the awareness of the Public and those that Govern to actively do something about it.. The Television Program 20-20, that aired 12 years or so ago, raised awareness for a period of time, but unfortunately, that awareness petered out and the public is still at risk.  Quality Glass Shops who can “prove” to the Insurance Industry that they do perform Safe Installations, will be rewarded with business in that segment of the market.  Glass Shops who implement and use “Net Promoter Scores” and track their Customers’ Satisfaction and Continue to Train their Technicians will be doing what the Consumers need them to be doing.

            The Cash Market is another issue, and because it is structured differently and because there is “little to no quality barriers” for someone to enter the Auto Glass Industry, Consumers that utilize the Cash Market vs. the Insurance Market are subject to the unknown. 

Have you any advice or hopes for the industry?

            John King:  Again, there will always be a need for Quality Work in an Industry.  Just look at what 2014 has brought to the Automobile Manufacturers, with record numbers of Recalls. Consumers now have the lowest confidence ratings ever for Car Companies and those Manufacturers will only change that conception when Recalls are reduced.  Auto Glass Retailers, Glass Manufacturers, Installation Equipment Makers and Urethane Producers need to work together to ensure the Public gets quality installations.  There are many great people within the Auto Glass Industry and I believe that those committed to providing Safety will win their fair share.

Fill in the name of who is replacing you at Sika. I know that you’ve been transitioning him into your role as you are nearing retirement. Will there be any changes in direction for Sika?

            John King:  Mr. Marius Mavrodin replaced me, effective July 1, 2014, although I have still been consulted on important issues.  That followed 5-6 months of us working very closely together so that he understood the Industry and our Customer Needs as much as possible. Marius has been with Sika for a number of years, so he knows our capabilities and he is blessed with an Organization that works very hard to provide Quality Products, Services and Support to our Customers.  I know there is still room for improvement in what we do and Marius will lead this cause.

As an avid golfer I’m sure golf will play a major role in your retirement. Do you have any other plans you’d care to share?

            John King:  For the short term, my wife Marilyn and I will take a couple of months to catch our breath.  The last 45 years together have flown by and we have been blessed with 5 wonderful children, with the Grandchild count, now at 4.  They have been and will continue to be our major focus.  It is not so much that I want to retire, but rather, I don’t want to work 50 hours a week anymore.

            Fortunately, there are some opportunities for me that might take root.  While deciding that, Marilyn loves to play golf as much as I do, and that is a major blessing.  We will stay active in Church and Charitable Activities and perhaps do a little travel, but the one thing I will not miss are Planes, Trains and Automobiles, if you catch my drift.  I will miss the People, for they have made it all worthwhile, and to all whom I have encountered over the years, I am truly grateful.  And lastly but most importantly, I thank My Lord and Savior, Jesus Christ, for looking after My Family and I.  We would have been lost without Him.

Thank you very much for your thoughts and insights John. You have provided great leadership to the auto glass repair and replacement (AGRR) industry and I’ve certainly valued both our business and personal relationship. You will be missed by our industry. I’m sure everyone wishes you the best in your retirement and/or the new opportunities that await you.

I was honored at Auto Glass Week™ 2014 to present John with an inaugural AGRR industry award. The award begins a new tradition through which the industry honors an individual for the body of their contributions through the years. The award was once known as the Len Stolk Award (as you will remember Len was an individual focused on the advancement and education of all facets of the AGRR industry). John was an excellent choice to receive this inaugural award.

John and David resized

Photo courtesy of http://www.glassbytes.com

Just sayin’.

 

 

Below is the original interview that was done with John King on September 9, 2011

 

Welcome John King, Vice President – Aftermarket at Sika Corporation. Sika celebrated its 100 year anniversary in 2010, a true testament to the quality of their products and dedication to their customers. Sika has developed product systems in the automotive, construction, and industrial markets with a continuing focus on safety and sustainability.  In the AGRR world, Sika produces adhesives for sealing and bonding windshields in the aftermarket auto glass industry that meet and/or exceed OEM (original equipment manufacturer) requirements.

What changes have you seen in the auto glass world since you first joined Sika and began working in this industry?

            John King:  My first exposure to an Auto Glass Installation, was in 1997, in Zurich Switzerland, where I saw the Technician wearing a shirt and tie, and a smock.  This was how this tech dressed every day.  To him, his job was his profession.  While I certainly do not think that USA Installers need a dress code, I do see that many glass shop companies want to “raise the bar” of customer perception, installer performance and the glass shops’ commitment to safety, within our industry.  I firmly believe that this country has many technicians who are committed to this cause, and take pride in their work.  Unfortunately, over time, I have seen far too many technicians that care little about quality work, and even less about safety.  We have an Industry with an extremely low “barrier of entry”, meaning that anyone can put a phone number on the side of their truck and advertise auto glass repair and/or replacement.  However, that does not mean that they know what they are doing, and both the Public and Insurance Industry, know little about how to discern the difference between those who care and those who do not.  As our country’s economic conditions have worsened, our industry has become a haven for persons looking to find some type of income.  While it does not mean that those techs necessarily perform improper installations and repairs, we have to ask ourselves, have these new industry participants been trained?  How are they kept abreast of the ever changing details of vehicle glass replacement?  How many of them even care to know anything about “doing it right”?

What changes would you like to see in the future?

            John King:  Some States have talked about “Licensing” of auto glass technicians.  While I do not want glass shops to have to spend any more money then necessary, we have to ask ourselves, “How can we raise the barrier-of-entry into this industry?”    Licensing may be one avenue of doing this, while at the same time, providing a means of “raising the bar of safety” within AGR.  In any industry where the safety of the public is at stake, there are usually steps that those industry participants must take to first, truly understand what their work is to accomplish, and then secondly, prove they are worthy of doing the work.  In essence, become Industry Certified.  In AGR, the goal should be to provide correct and safe auto glass installations, meaning the vehicle’s passengers should not be placed at risk after their vehicle is returned to them.  Today, responsible Glass Shop Companies take this task upon themselves.  They see to it that any new technician receives adequate training, and spends time observing experienced and qualified technicians, before turning the new techs loose, to do jobs on their own.  The question to all of us should be, “How does the Public and or the Insurance Industry know that adequate training has taken place?”  In today’s AGR market, Glass Shop Companies spend their CSR’s time or their Outside Sales Rep’s time trying to convince prospective customers that “their installations are safer than their competitors”.   Unfortunately, there are many Glass Replacement Companies that are either ignorant of a truly safe and quality installation, or they are outright lying.  Licensing, which would include testing and certification, may be one of the ways to accomplish industry wide compliance of correct installation standards.

How long have you worked at Sika, and what do you find most rewarding about your job?

            John King:  January 1997 is when my career at Sika began, and I must admit it took me a while to have an understanding of how this industry works.  However, without a doubt, the most rewarding part of the business is getting to know people.  There are always business issues, business problems to solve, and strategies to implement, but at the heartbeat of this industry, is its’ people.  For me, there is nothing I like to hear more, than an unsolicited positive comment about how our Sika people are perceived by customers.  Whether Distributors or End Users, if our salespeople, or our customer service department are liked and appreciated by customers, that means that more than half the battle is already won.  The bottom line, is that most people, want to do business with good people. Therefore, if we can hire honest people with good interpersonal skills, and then adequately train them, and provide our customers with quality products, in the end, our sales people will provide excellent service and support to those customers, which would be ultimately rewarded with an ongoing business relationship.

Sika recently created a great animated cartoon called, “No Shortcut to Safety.” It’s a wonderful tool for glass installers and consumer alike, and describes the process of safe windshield installation without using laymen’s terms that can sometimes feel unfamiliar to people who don’t speak AGRR garble.

John, why did Sika Corporation feel it was important to develop this animation video?

John King: The AGR Industry is a cross section of groups.  We have the makers of product, the distributors of products, and the users of products, and those who need those products and services, who are collectively the Consumers, or Fleet Customers, or Insurers.  Communicating to a wide array of groups, with a single message, is always a challenge.  Our message needed to be part technical, part educational, part logical and if possible, part entertaining.   Most groups can understand all 4 parts of the message, if the message is short, and studies indicate, even with very intelligent persons, that 4 minutes is tops, to maintain someone’s attention.  We investigated a number of ways to develop and communicate our No Shortcut to Safety message, and when we came across the animated concept, it made sense to use the video’s simplicity.  We also found from experts in video communication that presenting a new message with an entertaining format, also maximizes the listeners retention of the subject matter; hence a cartoon format. 

What were your goals and target audience for this important message, “No Shortcut to Safety?”

John King: The message was still the key objective, and a message of a Safe and Reliable auto glass installation needed to be created and delivered to the Shop Owner, the Technician, and their Customers.  .

How would you like to see this video utilized? In other words, what do you feel is the most effective way to reach out to drivers to educate them about safe windshield installations?

            John King: Ideally, it is a combination of utilization of the video.  First of all, we know safety is important to most consumers.  This video has been shown in glass shop waiting areas to hundreds and hundreds of vehicle owners, and feedback from them has been exactly what we desired.  They have told those glass shops that they understand what they are doing for them.  Nothing has been more rewarding than reaching the Public with this message of No Shortcut to Safety.  Currently, glass shop waiting rooms are still the most common place where the message is shown.  However, with smart phones and the internet, we would hope to experiment with some glass shops being able to forward this video, to their customer, once they have scheduled a job.  The video then acts as an explanation to that customer as to what they should expect, when the job gets done.  This approach could then create a real value added marketing piece for shops to make the whole glass replacement experience, an even better one for their customers.

Thank you for joining us John.

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The Future in the Automotive Aftermarket Industry

For me, listening to keynote speaker Tony Aquila, CEO of Solera Holdings, Inc. at Auto Glass Week in Baltimore was most interesting. He led Solera’s purchase of LYNX Services, GTS and GLAXIS from owners Pittsburgh Glass Works LLC and PPG Industries, Inc. earlier this year. Tony’s accomplishments are considerable, especially considering that he grew up sweeping floors working in his uncle’s body shop and he has a 9th grade education. You have to be incredibly impressed by the guy.

The “Strategic Focus” web page for the company states, “Solera is the world’s leading provider of software and services to the automobile insurance claims processing industry.” (Link to corporate history) Solera will certainly be changing the world of auto glass repair and replacement (AGRR) with innovative software solutions that will simplify the claims handling process surrounding glass repair and replacement. The organization has the potential to affect the way all consumers and influencers ultimately buy AGRR products and services dramatically. Depending upon the vision and direction Solera heads automotive aftermarket parts and service providers, including the auto glass repair and replacement industry (along with the collision repair industry and parts distribution industry) could be in for some big changes. It’s all about taking out market inefficiencies and reducing costs associated with those inefficiencies.

Just look at the AGRR industry. To ensure that service level expectations of the consumer is ultimately met, any software program would need to have access to the real-time inventory level of any supplier or distributor warehouses in the area, the inventory levels of any AGRR shop or technician in the vicinity vying for repairs or replacements, along with the schedules of all technicians available to properly repair or replace the part.

Imagine when an auto glass replacement is required, if it would be possible for the software program to instantly search for the part determining which supplier(s), distributor(s) or AGRR shop(s) has (have) the part in stock; perhaps ranked by cost for the part while finding the best auto glass replacement technician suited to properly install the part; when and where the consumer wants it installed. With that capability you then have to start asking some questions like:

Once the software program has all of the information required to start processing an auto glass replacement, who or what company is directly buying and paying for the part(s) required?

It could be:

  1. The AGRR shop or technician facilitating the replacement or
  2. Maybe the customer’s insurance company or
  3. If it’s a cash job the consumer could pay.

Which of the three above pays for any part required is important to determine the all-in price to be paid for replacement parts, along with the price paid for required installation supplies and labor.

So which organization determines the pricing level for the various scenarios outlined above?

Who is buying and paying for the part and installation supplies required?

Who is paying for the technician to install the part?

Answers to these and many other questions will give you an idea as to where the industry could be heading. There will be changes coming and margins are probably going to change in the AGRR industry in the near future. And probably not for the better.

What is it you’re doing to be prepared for the future?

Just sayin’.

140707.safeisrisky

Courtesy of TomFishburne.com – Marketoonist.com©

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Hobson’s Choice (a Free Choice or No Choice at All?)

I recently read the argument that attorneys for Safelite Group Inc. (Safelite) made relating to Connecticut’s Public Act-13-67(c) (2) in a glassBYTEs.com article. They argued that,

“it puts appellants Safelite Group Inc. and Safelite Solutions to a Hobson’s choice….”

Hobson’s choice[1] refers to a businessman by the name of Thomas Hobson who ran a livery in Cambridge, England in the 1600’s. Hobson required that every rider asking to hire one of his horses to always take the horse nearest the door. If a patron didn’t want to use that particular horse no other horse could be used. A “take it or leave it” choice. As another source on the origins of the phrase states[2], “A Hobson’s choice is a free choice in which only one option is offered.” I thought using “Hobson’s choice” in this particular instance an interesting one considering the origins of the term. More on that later.

This link to the summary of the act that was first introduced in the Insurance and Real Estate Committee of the Connecticut House and ultimately signed by the Governor of the State of Connecticut required that in the handling of any insurance auto glass claim in the State of Connecticut that:

“The act requires that a glass claims representative for an insurance company or its third-party claims administrator, in the initial contact with an insured about automotive glass repair services or glass products, tell the insured something substantially similar to: “You have the right to choose a licensed glass shop where the damage to your motor vehicle will be repaired. If you have a preference, please let us know. ” By law, appraisals and estimates for physical damage claims written on behalf of insurers must have a written notice telling the insured that he or she has the right to choose the shop where the damage will be repaired (CGS § 38a-354).”

Fairly straightforward.

A public radio program called “A Way with Words” talked about Hobson’s choice on one of the program segments. One of the hosts of the radio program, Martha Barnette tells us:

“The phrase Hobson’s choice goes all the way back to 17th-century England. For 50 years, Thomas Hobson ran a stable near Cambridge University. There he rented horses to students. Old Man Hobson was extremely protective of those animals. He rented them out according to a strict rotating system. The most recently ridden horses he kept at the rear of the stable. The more rested ones he kept up front. That meant that when students came to get a horse, Hobson gave them the first one in line—that is, the most rested. He’d let them rent that horse, or none at all.”

Perhaps you see where I was thinking that Hobson’s choice was an interesting phrase for the attorneys to use in their argument. First, Public Act-13-67(c) (2) is a duly enacted Connecticut law so their client really doesn’t get a choice in deciding whether they wish to follow it or not. As is their right, they can dispute the law which is obviously why the company is filing the appeals to the act which provides Connecticut consumers a choice in what company repairs or replaces their damaged auto glass. It’s just that at his stable Hobson didn’t want the same horse(s) being used each time by his patrons. Hobson wanted his patrons to use only the horse(s) that he wanted them to use. You can understand why Hobson wanted to rotate his horses so that each got equal use. Safelite wants Connecticut consumers to only use the auto glass repair and replacement (AGRR) company that Safelite wants them to use. In this case it would appear that Safelite is Hobson.

By enacting Public Act-13-67(c) (2), the State of Connecticut took steps it deemed appropriate to protect consumer choice for residents of the state. There are any number of AGRR companies operating in the State of Connecticut for consumers to use when they sustain auto glass damage. So is it “A Matter of Self-Interest or Consumer Choice”? Isn’t it Safelite that is attempting to provide Connecticut consumers with a Hobson’s choice?

Just sayin’.

Take it or leave it

Another example of a Hobson’s choice would be from Henry Ford’s book titled My Life and Work and written in 1922 referencing options available for the Model T Ford.

Any customer can have a car painted any colour that he wants so long as it is black.”

 

[1] Merriam-Webster.com meaning of Hobson’s choice

[2] Wikipedia.org description of Hobson’s choice

Other sources:

http://www.glassbytes.com/documents/07302014SafeliteLettertoCourt

http://en.wikipedia.org/wiki/Hobson’s_choice

http://www.merriam-webster.com/dictionary/hobson’s%20choice

 

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Just Sayin’ Blog – Disruption Innovation in Business

 

Clayton Christensen developed his disruption innovation theory studying the computer industry. Disruption in virtually any industry will determine winners and losers in business. If you visit the Christensen Institute web site you’ll read that:

“The theory explains the phenomenon by which an innovation transforms an existing market or sector by introducing simplicity, convenience, accessibility, and affordability where complication and high cost are the status quo. Initially, a disruptive innovation is formed in a niche market that may appear unattractive or inconsequential to industry incumbents, but eventually the new product or idea completely redefines the industry.”[1]

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Courtesy of TomFishburne.com

At the annual Code Conference held at the Terranea Resort, located in Rancho Palos Verdes, California that brings together some of the world’s geekiest folks; Google’s Sergey Brin debuted Google’s driver-less car (link). These cars were designed without a dashboard, steering wheel or a brake pedal. Why? A driverless car doesn’t need any of those accessories in the cars of the future as seen by the visionaries at Google. Could this be an example of “disruptive innovation” that could affect multiple industries?

This Google designed driver-less vehicle is very different from the self-driving vehicles that Google equipped with the driver-less technology installed on the Toyota or Lexus models that Google first began using. The initial self-driving cars Google used were off –the-lot models made by original equipment manufacturers so each came equipped with a dashboard with all of the typical accessories you’d expect to find both on and under the dash. But this new Google car comes without many of the accessories deemed required, up until now, and Google added a few other things that you will find disruptive long-term. It evidently is equipped with a flexible plastic windshield.

The car can only top out at 25 miles per hour and you’re not going to be seeing it on the highways anytime soon, but nonetheless with Google behind it one can only assume that the company’s long-term goal is to dramatically change driving habits. Will this technology be successful in disrupting the car industry? It would take time and a lot of treasure, both human and monetary. Google certainly has the wherewithal to attract the best and brightest to make this project a reality and money isn’t an issue.

Experts believe a self-driving car will make driving safer. Imagine that you can text or talk on your phone to your heart’s content as you won’t need to be concerned about distractions. Human driving errors should be greatly reduced if all the other cars around you are interconnected resulting in greater safety. Older drivers would have more freedom which would be good for them and great for everyone else concerned about grandma and granddad getting behind the wheel. Disabled drivers would also gain new freedom to rely on themselves versus others. An EY Automotive study says that autos with Autonomous Vehicle Technology will surge from 4% in 2025 to 75% by 2035.

There are going to be winners and losers as self-driving cars gain traction in the coming years. What will greater safety and independence for everyone mean to the insurance industry and all of those in claims departments today if the number of accidents drops? To the collision and automotive parts repair industry? To the rental car industry? To the auto glass repair and replacement (AGRR) industry? To the trucking industry? Countless industries will be affected. There’s going to be a lot of businesses that will rise and fall with this disruptive innovation and a lot of people at risk of losing their current job in an industry affected by the self-driving car.

There will probably be a day when those who want to drive their own cars could be viewed similarly as today’s drunk driver or someone that is texting as they are putting self-driving car riders at risk.

What will the likely outcome be if Google’s self-driving cars become a “disruptive innovation” and disrupt car manufacturers, the transportation industry as a whole and change the habits of the driving public in the years to come? We’ll have to wait to see.

So is there something a company or companies are doing today (or will be doing) in the AGRR industry that is (or will) disrupt the way things operate? Are there innovations that will “completely redefine(s) the AGRR industry”? I think the answer is yes to both questions. There are plenty attempting to disrupt what it is you are doing today and I know that there are those trying to disrupt the future of the industry with new innovations.

Here is another definition of disruption innovation:

“A disruptive innovation[2] is an innovation that helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in a new market and later by lowering prices in the existing market.”

You probably think we already have enough disrupters in the AGRR industry, but what is your plan going to be if you’re not one of the one’s who has designed or is designing a “disruption innovation” in the industry? Something is certainly coming.

Just sayin’.

 

 

 

[1] http://www.christenseninstitute.org/key-concepts/disruptive-innovation-2/

[2] http://en.wikipedia.org/wiki/Disruptive_innovation

 

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Just Sayin’ Blog – Becoming Somewhat Extraneous

Let’s face it, the National Auto Glass Specifications (NAGS) List Price™ used in the auto glass replacement (AGR) industry for decades that has a pricing (and parts numbering) mechanism seems to have become extraneous.

Glasslinks.com has information that was detailed on a NAGS™ web site from 1998 that provides the following historical information on the company:

From N.A.G.S. Website of 1998:

National Auto Glass Specifications was founded in 1927 by Madison Tracey who made patterns to cut flat glass for automobiles. He assigned part numbers for these patterns to ‘catalog’ them for his inventory purposes. NAGS Part Numbers were soon adopted as the industry standard to identify glass.

  • The first NAGS glass pattern (#1) was for a 1926 Model K, Series 5, Touring and Roadster Chevrolet.
  • The oldest car for which NAGS has a pattern is a 1915 Touring and Roadster Ford; Pattern #49 is a 2-part (upper and lower) windshield pattern.
  • NAGS first “bent” glass Part Number was #XXX1 for the back glass on a 1940 Lincoln Zephyr
  • The first curved windshield for which there is a NAGS Part Number is #XX22, for a 1941-42 Chrysler.

In the 1940s, curved glass appeared and the pattern business declined. NAGS continued to assign Part Numbers to catalog curved and flat glass and published the ‘NAGS Catalog.’ NAGS also published a chart to ‘calculate’ the price of flat glass.

In the 1950s, manufacturers were in conflict over their published list prices. As a neutral party, NAGS was asked to assign list prices to NAGS part numbers, establishing the NAGS List Price. These list prices reflected the industry practice of discounting and were based on manufacturers’ truckload prices. NAGS started publishing the part numbers with prices, establishing the ‘NAGS Calculator’.

Through the 1980s, NAGS information was available exclusively in print form. There was little change in the industry business practices. In the late 1980s, change started happening quickly as advances in technology produced more curved, tinted and coated parts. Networks began operations and electronic commerce was introduced to the industry.

In 1991, NAGS joined the global information marketplace through its acquisition by Thomson International, a world-wide publishing and information services company, and began development of the GlassMate® Database. Today, this database is used in many ways in support of the Auto Replacement Glass industry; e.g., part identification, inventory management, purchasing, invoicing/billing, EDI, auditing, etc. The vehicle configurations in the database have been adopted as Code Source #474 by the X12 Accredited Standards Committee of the American National Standards Institute.

 

* In 1991 NAGS™ was sold to Mitchell International and Mitchell International was acquired in 2013 by KKR and Co. L.P., a large global private equity investment firm.

When I first entered the AGR industry in the 1970’s the NAGS™ list price was factored by the auto glass truckload discount listing produced by the then leading industry auto glass original equipment and replacement manufacturer. The NAGS™ formula for computing the suggested NAGS™ list price was easily understood by everyone in the industry. As a retailer you could calculate a new NAGS™ list price by using the truckload pricing list that manufacturers provided to retail customers. There was always a lag period between the time the manufacturer provided its current truckload price list and when NAGS™ then published a updated list price schedule making it available to the AGR industry. Life was certainly much simpler then.

With the rise of the “global economy” over the past several decades, the subsequent improvement in quality (certainly debatable) of auto glass manufactured from countries with lower cost from around the world, along with cost cutting achieved by domestic manufacturers; many auto glass parts have become a commodity at the wholesale level. With the mix of manufacturers the long-used NAGS™ formula to determine the list price of NAGS™ parts may have become somewhat outdated. The vaunted formula for determining the NAGS™ list must have greatly changed over the years. It was once a very open and transparent pricing mechanism.

I found an article on glasslinks.com from December 1998 titled “NAGS™ Announces Benchmark Pricing for 1999”. It’s a great article that in detail describes the “Benchmark Pricing” model NAGS™ used when the company reevaluated the list price for auto glass parts (and at the same time made changes to NAGS™ labor hours). According to the article, the revaluation that NAGS™ made reduced the list price for windshields by 68% and tempered by 53%, with NAGS™ labor hours reduced by 20%. The reduction in NAGS™ list price was intended to eliminate the large discounts that retailers were offering to insurance, commercial and cash customers off previous NAGS™ list price schedules. Discounts at the time ran as high as 65+% off the NAGS™ list price schedule with the thought that the revaluation and new re-engineered NAGS™ list price schedule would become the actual price charged by retailers to the retail customer base. That was the idea anyway…. We all know how well that worked out for retailers.

When NAGS™ was sold in 1991 to Mitchell International there was a concern raised by many retailers at the time that the treasured independence of NAGS™ pricing, that was sought out by manufacturers’ in the 1950’s, would be at risk. A major customer of Mitchell International was the insurance industry.

It’s difficult enough to fully understand pricing offered from AGR manufacturers and suppliers to retailers. Pricing is rather fluid, meaning that you receive whatever pricing you can negotiate with manufacturers and/or suppliers and there is no consistency upon what pricing is being offered to retailers. So how does or can NAGS™ have a formula today to determine suggested NAGS™ list price for auto glass parts which can be consistently used across the industry?

In an “open letter” dated May 5, 2014 written to Mitchell International/NAGS and signed by Independent Glass Association President Matt Bailey, the company was asked,

“What are the specific sources that you have collected data from since independent glass retailers and the referenced suppliers have all confirmed wholesale price increases?”

I haven’t heard if Matt received a reply to his question.

The question was a reasonable one and was related to an industry wide 5% +/- price increase put in place by a number of AGR manufacturers/suppliers to retail customers instituted on April 1, 2014. It is difficult to understand how a 5% +/- price increase from AGR manufacturers/suppliers could result in a reported .7% increase in the NAGS™ list price for the top 100 NAGS™ parts as detailed in a glassBYTEs.com™ article titled “NAGS Spring Calculator Released, Average Price Increase of Top 100 is 0.7 Percent” written by Jenna Reed. The article stated,

“The Spring 2014 National Auto Glass Specifications (NAGS) International Benchmark Calculator has been released and shows the average price change of top 100 most popular parts was a 0.7 percent increase since the last catalog. The total average price change of top 10 parts was an increase of 0.4 percent.

To view the top 100 parts, click here.

In a comparison from the Winter NAGS Calculator 2014 to the Spring NAGS Calculator 2014, the largest price increase by percentage was on the 2005 Honda Civic windshield (FW02184GGYN), which increased 4.5 percent. To view this analysis of largest price increases by parts among the top 100, click here.

In the same comparison from Winter to Spring, the largest price reduction was on 2012 Ford Escape windshield (DW01684GTYN), which is down 3.07 percent. To view an analysis of the biggest price reduction among the top 100 parts, click here.”

It seems odd doesn’t it that prices from suppliers would go up 5%+/- and the top parts would rise less than 1%.

There are countless retailers that use either a cost plus, flat or tiered pricing models to consumer and commercial/fleet customers adding a “mark-up” to their actual cost of the glass being replaced. Often those prices include both the labor and kit charge required to complete the installation. This provides those that use these models comfort that they have a consistent profit margin to operate under. Networks and TPA’s still use a discount to NAGS™ pricing model to most of their clients.

A group of industry leaders formed The Chicago Auto Glass Group over 10 years ago to address industry pricing. The group worked hard at developing a “white paper” on benchmark pricing and suggested that the AGR industry move to a pricing model they detailed as follows,

“This Guide is intended to serve solely as a recommendation for establishing benchmarks and is in no manner intended to set or determine actual prices for auto glass replacement or to reduce open competition in the local, regional, or national market place.”

You can click on this glassBYTEs.com link to read the entire Chicago Auto Glass Group proposal. The Chicago Auto Glass Group wasn’t successful in pushing the benchmark pricing proposal, but many in the industry viewed the proposal as a positive step in making industry pricing fair to all stakeholders.

AGR industry stakeholders should, on occasion, evaluate the pricing model(s) that they use, discard old or outdated ones and replace them with ones that are relevant. What do you think?

Just Sayin’.

 

 

Reference materials:

   http://www.glasslinks.com/newsinfo/nagsbnch.htm

   http://www.usglassmag.com/AGRR/Backissues/2003/0305/future.htm

   http://www.glassbytes.com/newsNAGSWinter20130114.htm

   http://www.glassbytes.com/2014/05/nags-spring-calculator-released-average-price-increase-of-top-100-is-0-7-percent/

   http://www.glassbytes.com/2013/09/mitchell-international-owner-of-nags-purchased-by-kkr/

   http://www.glasslinks.com/newsinfo/nags_history.htm

   http://www.usglassmag.com/AGRR/Backissues/supplement/NAGSNOTES.htm

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Just Sayin’ Blog – A Matter of Self-Interest or Consumer Choice

Dominos

 

Last June 3, 2013 Dannel Malloy, Governor of the State of Connecticut signed a bill that was passed by Connecticut’s House and Senate the previous month into law. This link to the summary of the act that was first introduced in the Insurance and Real Estate Committee of the Connecticut House states,

“The act requires that a glass claims representative for an insurance company or its third-party claims administrator, in the initial contact with an insured about automotive glass repair services or glass products, tell the insured something substantially similar to: “You have the right to choose a licensed glass shop where the damage to your motor vehicle will be repaired. If you have a preference, please let us know. ” By law, appraisals and estimates for physical damage claims written on behalf of insurers must have a written notice telling the insured that he or she has the right to choose the shop where the damage will be repaired (CGS § 38a-354).”

This law seems to be a reasonable approach to provide and ensure consumer choice to the residents of Connecticut.

As it appears on the State of Connecticut’s General Assembly bill tracking web site the law – Public Act Number 13-67 – states,

 “AN ACT CONCERNING AUTOMOTIVE GLASS WORK.

To require an insurance company doing business in this state, or agent, adjuster or third-party claims administrator for such company to provide additional disclosures to an insured regarding such insured’s right to choose a licensed repair shop or glass shop where such insured’s motor vehicle physical damage or automotive glass work will be performed.”

Again, this language also seems to be a reasonable expectation for residents of the state. Everyone believes that consumer choice is a good thing right?

The signing of the law was reported by number of industry publications (glassBYTEs.com, Autobody News, Automotive Fleet) due to the dramatic effect that it would have when fully enforced on insurance companies claims management programs, as well as automotive glass repair and replacement (AGRR) industry players (Harmon Solutions Group, NCS/Netcost Claim Services, TeleGlass/Strategic Claims Services, Gerber National Glass Services, PGW Lynx Services, Safelite Solutions)  that provide network and/or Third Party Administrator (TPA) services to the insurance industry. AGRR networks and/or TPA’s tend to steer business to either company owned stores and/or to affiliated network repair or glass shops that conform to the pricing or service requirements of the network and/or TPA. That has been a long standing business practice of networks and TPA’s and it’s not hard to understand the financial benefit to these companies to continue doing so. The passing and subsequent enforcement of this law requires a pivot away from the long-standing AGRR industry practice of placing the decision of which company provides the repair or replacement into the hands of the consumer needing service and out of the hands of a network and/or TPA that has always been heavily involved in the decision. This also seems to be a positive for consumer choice. Again, everyone believes that consumer choice is a good thing right?

In order to protect its network and TPA business Safelite Group, Inc. and Safelite Solutions LLC (the Plaintiffs-Appellants) have gone to court against GEORGE JEPSEN, in his official capacity as Attorney General for the State of Connecticut and THOMAS LEONARDI, in his official capacity as the Commissioner of the Connecticut Insurance Department (the Defendants-Apelles) in hopes of overturning the law. The law clearly prohibits the steering of Connecticut consumers to specific repair shops by TPA’s and/or auto damage appraisers so one can understand the self-interest involved. Connecticut’s “Department of Consumer Protection” web page states that:

“Ensuring a Fair Marketplace and Safe Products and Services for Consumers”

The purpose of this government department is pretty obvious by its title. Public Act Number 13-67 protects the interests of consumers in the state and their “right to choose”; and the State of Connecticut unquestionably is within its rights to enact such a law, right?

If the State of Connecticut prevails in its defense of the constitutionality of Public Act Number 13-67 through the appeal process, as Safelite continues to fight to overturn the law, the future landscape of networks and/or TPA’s that provide AGRR services to consumers in the state will forever be changed. And if this law stands it will have an effect on the landscape of the AGRR industry in the entire United States. You can be sure that similar consumer protection bills will be introduced in state assembly’s’ across the country. Is that why Safelite is so strongly fighting this law duly enacted by the State of Connecticut?

If you visit the Safelite web site you will find that the company describes Safelite Solutions LLC as providing:

“….complete claims management solutions for the nation’s leading fleet and insurance companies.

The company currently serves as a third-party administrator of auto glass claims for more than 175 insurance and fleet companies, including 19 of the top 30 property and casualty insurance companies. Safelite® Solutions manages a network of approximately 9,000 affiliate providers and operates two national contact centers in Columbus, Ohio and one in Chandler, Arizona.”

The Connecticut law could serve to undermine a business practice that has existed in the AGRR industry since the late 1970’s. The genesis of call centers (a.k.a. a network or TPA) was when Joe Kellman, former owner of Globe Glass & Mirror, visited an auto glass call center facility in Bedford, England operated by Belron’s Autoglass and brought the idea back to the United States starting the U.S. Auto Glass Network. Since then, the impact, influence and control of consumer auto glass losses by networks and/or TPA’s operating in the AGRR industry has continued to grow each and every day. The networks and/or TPA’s obviously work hard to control and steer auto glass repairs and replacements to either company owned stores or to glass companies that agree to join and follow pricing arrangements that benefit the goals of the network and/or TPA. A business practice worth fighting for right?

The State of Connecticut is interested in protecting consumers in the state, who are in need of auto glass repairs or replacements, from being steered by a network and/or TPA. This law seems like a reasonable next step action in a state where those that are engaged in the AGRR industry are required to be licensed by the state (in my last blog I wrote about “Is it Time for Licensing?” in the AGRR industry). The Department of Consumer Protection oversees the licensing flat glass and automotive glass work.

We will have to wait for the appeal process to work its way through the courts to find out if this law stands, is amended or falls. But whether you believe that the law is a positive development for Connecticut consumers or you believe that the law violates free speech in commerce, the fight will continue as the stakes are too high. If the law passes through the appeal process and stands, it could be the tipping of the first domino and could be the beginning of big changes for the AGRR industry.

So where do you stand on Public Act Number 13-67? Are you on the side of consumer choice or on the side of the networks and/or TPA’s? Perhaps it depends on your own self interest.

Just sayin’.

 

Dominos

 

 

Associated Articles and Reference Material:

Zauderer’s Scope (page 589) https://www.law.upenn.edu/live/files/1566-keighley15upajconstl5392012pdf

http://www.autobodynews.com/news/regional-news/northeastern-news/item/7277-connecticut-governor-signs-anti-steering-bill-into-law.html

http://www.nldhlaw.com/content/uploads/2013/07/UpToSpeed_July2013A.pdf

http://www.glassbytes.com/2014/04/connecticut-officials-file-brief-in-support-of-anti-steering-law-in-appellate-court/

http://www.glassbytes.com/newsConnAutoGlassBillGoestoGov20130523

http://www.glassbytes.com/newsConnecticutSteeringPasses20130606

http://www.glassbytes.com/documents/03192014SafeliteSecondCircuitBrief.pdf

http://www.glassbytes.com/documents/04232014SupplementalIndex.pdf

http://www.glassbytes.com/documents/04232014JepsenBrief.pdf

http://www.cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&bill_num=5072&which_year=2013

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Just Sayin’ Blog – Is it Time for Licensing?

I read an article relating to the Novus Super Session at the organization’s Annual Franchise Conference held last week in Tucson. A representative from one of the networks that operate in the automotive glass repair and replacement (AGRR) industry in the United States attended the conference and discussed industry related issues and ideas. One of the issues discussed related to the responses to survey questions that the network had asked of some number of in-network shops that either are:

    1. required to bill through the network for the insurance or fleet work that these shops do for an insurance company that utilizes this network as an administrator or
    2. shops that are asked by the network to do work on the behalf of the network for an insurance company or fleet account that the network either can’t or doesn’t want their own company owned technicians to do for some reason.

The survey question that the representative said received the most comments related to unlicensed and/or unregistered AGRR shops. The network representative reported that when the survey responders were asked if they would support the regulation of auto glass shops in their states a resounding 74.2% responded with a yes. I think the question relating to regulation of auto glass shops an interesting one and I support the regulation of auto glass shops that do replacements.

When you consider all of the various “services” that are regulated by states, it is inconceivable to me that auto glass replacements (and other automotive repairers) are not. I looked on the web site of the Illinois Department of Financial & Professional Regulation (IDFPR) that oversees and licenses those considered “professionals” by the State of Illinois. There are 237 professions that are regulated by the IDFPR starting first with those who provide “Acupuncture” services. That seems like a profession that should be regulated. If you’re going to have someone perform acupuncture on you, would you want just anyone off the street be allowed to stick needles in you? Probably not. The listing ends with “Veterinary Technician”. The professional listings include some in the medical profession, but not every specialty is listed so if you add every regulated and/or licensed professional’s in the medical field to the list on the web site would be much longer. How does the state you live regulate those they consider professionals? Do you have 237 different professions regulated and/or licensed by your state?

I think it’s interesting that some of the professions that are regulated and/or licensed by the State of Illinois include:

Real Estate Appraiser                                             Athlete Agent

Cemetery Customer Service Employee                    Community Association Manager

Detection of Deception Trainee                                Nail Technician

Shorthand Reporter                                                Timeshare Resale Agent

Understanding that a few of the professions on the truncated list above taken from the IDFPR web site could, for instance, certainly cost you money if you had a bad appraisal via a Real Estate Appraiser, but in all likelihood none of these licensed and/or regulated professions are going to put your life at risk. A faulty windshield installation, on the other hand, could cost you and/or passengers riding in your vehicle serious injury or in a worst case scenario a life.

If you visit the AutoGlassSafetyCouncil.com or SafeWindshields.com site you’ll find a variety of information regarding the importance of windshields in auto glass safety. A question on the SafeWindshield.com site asks:

What role does my windshield play to ensure my safety in an accident?

The windshield provides a significant amount of strength to the structural support in the cabin of the vehicle. For instance, in a front end collision the windshield provides up to 45% of the structural integrity of the cabin of the vehicle and in a rollover, up to 60%.

There should be no dispute regarding the importance of a windshield in ensuring the safety of auto and truck passengers, asking that those who install your windshield to be licensed and/or regulated doesn’t seem unreasonable to me? If in the State of Illinois the state government feels that there is sufficient need to regulate and/or license Nail Technicians, Athletic Agents or Shorthand Reporters, wouldn’t you think that the same state legislature would take a look at various automotive repairs that if not done properly, could cost someone a serious injury or death?

The network representative at the Novus meeting was quoted as saying that for those that the network surveyed:

“By far, the largest problem was unlicensed/unregistered shops.”

You can certainly downplay the network that provided the survey results when asking the question “What was the largest problem in the AGRR industry?” (some might suggest the right answer to the question is the network providing the information is actually the largest problem in the AGRR industry), but is it time to consider the licensing and regulation of the AGRR industry considering the importance of the windshield to occupant safety? Perhaps that licensing or regulation could include adherence and verification of replacements to the Auto Glass Replacement Safety Standard®. That might be an unpopular position for some, but would it be so bad? As auto glass professionals what are we afraid of?

Just sayin’.

 

AGW 2014 Free Admission

Link to Free Admission Ticket to Auto Glass Week 2014

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Just Sayin’ Blog – Now and in the Future

Last Tuesday, February 4, 2014 there were two items in glassBYTEs.com™ e-Newsletter that I read with great interest. The two articles got me to wondering about how technology could be developed to increase passenger safety in the auto glass replacement (AGR) industry by alerting passengers of potential problems.

The first article I enjoyed reading was the “View From The Trenches” blog post by Neil Duffy. His blog post titled “Nightmare on Stevens Creek” pointed out those in the auto glass repair and replacement (AGRR) industry who are portrayed as “hacks” in the article; those who lower the quality of installations and how our industry is viewed. Many of these “hacks” don’t follow or worse are even aware (an even scarier nightmare) of the Auto Glass Replacement Safety Standard® and what is required, on their part, to ensure that those they install auto glass for are safe in an accident. The second article was an Associated Press article that appeared on TribLive.com titled “Feds want cars to be able to talk to each other“. Seems like a great way for the cars we drive not to run into cars that others drive. This technology will have to be in full use when we move to driverless cars, but in the meantime it could greatly reduce collisions today if rolled out in new cars.

jetson

Everyone in the auto glass repair and replacement (AGRR) industry across the country has seen someone who isn’t following proper installation standards and put drivers at risk when auto glass is replaced. There are those in the industry who think the drums are beat too loud about this topic, but it is an issue and Neil rightly points to the concern that he sees with the acts of some lowering the standards which could bring us all down at some point in the future. As Neil wrote,

“This drains the resources and profitability of shops who value quality. By allowing hacks to contaminate our industry we are putting both the public at risk and our own livelihoods. The sad fact is that there is an unwillingness to seek regulatory constraints or to somehow cull the worst offenders in the AGRR industry. Why would a glass manufacturer or wholesaler try to cut the number of sales they could make by calling for the removal of incompetent or illegal customers? Why would a third-party administrator (TPA) demand stringent certification and high-limit liability insurance over negotiating deeper discounts from the same vendors? Furthermore, we, in AGR, play into the hands of our largest competitor who promotes its technician’s training and employee character via the media over smaller companies – the local unknown local glass purveyors – that may prey upon potential clients. That alone can create a bad dream or two.”

Are there auto glass suppliers or urethane suppliers that would walk away from a sale if the supplier is aware of bad behavior on the part of a customer? I for one would like to believe that there are. But would some suppliers step in and provide the products versus losing a sale? Sadly probably yes.

I appreciate Neil Duffy pointing out that there are those in the industry who shouldn’t be installing auto glass in any vehicle because they either don’t know how to properly do a replacement or they don’t care that they are installing a part in an unsafe manner. Bad apples that exist in our industry can lower the value that the vast majority of us in the industry who are doing it right receive as Neil suggests. Consumers believe they are getting a quality product regardless of what company they use. When a company that is doing everything right competes against those who don’t, how could a consumer know that they could be choosing a company that delivers the service and/or products in an unsafe manner which could ultimately cause serious safety issues? They don’t.

The second article that I referenced that appeared on the glassBYTEs.com™ web site on February 4th dealt with the United States government push to require automakers to equip vehicles with technology that will reduce accidents by having vehicles “talk with each other”.

The Associated Press article details the work that the National Highway Traffic Safety Administration (NHTSA) has been doing in cooperation with automobile and truck manufacturers since the early 2000’s to prevent accidents via new technology.

The article quotes David Friedman, the head of the safety administration saying that NHTSA “estimates vehicle-to-vehicle communications could prevent up to 80 percent of accidents that don’t involve drunken drivers or mechanical failure”. Imagine the lives that will be saved with the implementation of new technology. Mr. Friedman goes on to say the goal is “to prevent crashes in the first place”. Historically the government’s focus has been on passengers surviving accidents. On the NHTSA web site the department’s mission reads:

“NHTSA was established by the Highway Safety Act of 1970 and is dedicated to achieving the highest standards of excellence in motor vehicle and highway safety. It works daily to help prevent crashes and their attendant costs, both human and financial.”

The technology that is being developed and installed on vehicles today across the globe is pretty amazing and has been a dream going back over 50 years.

In 1956 General Motors showcased their cars with a traveling show featuring the company’s fleet at events in major cities across the country. The first “Motorama Show” was held at the Waldorf-Astoria in New York City. This “Key to the Future” video was a “featured film at the exhibit that looked into the far distant future of 1976 which predicted a jet age future with electronic digital displays and an On Star like central command that would guide us along our uncrowded path to adventures.”   

The view of the cars of the future from 1956 obviously wasn’t reality in 1976, but we will be seeing more and more technology installed in all types of vehicles. This CarScoops.com article talks about an “Augmented Reality System (that) Allows Drivers to See Through Large Vehicles”. The ‘See-Through’ developed by a team from the University of Porto, in Portugal, is directed by Professor Michel Ferreira. The technology is a great advancement in driving safety and will undoubtedly save life’s’. Imagine being able to “see-through” a large vehicle such as a bus in front of you in order to safely pass on a two lane highway.

Virtually every car on the road today has on-board technology that informs drivers of mechanical issues that have been detected.  Additionally, mobile telephone hands free devices and Global Positioning Systems (GPS) technologies are available for most vehicles further helping to improve driver safety. Government authorities, driving safety advocates and organizations in cooperation with automobile manufacturers continue to build on technology that improves passenger safety. The ever changing availability of new safety technologies being developed for vehicles is rapidly changing how we interact with vehicles, how the vehicles we drive interact with us and even how the vehicle interacts with everything near the vehicle. A Bloomberg.com article titled “Talking-Car Systems to Be Required as U.S. Weighs Rules” briefly discussed future technologies being developed by CISCO Systems and others for connected cars, along with companies such as Google and Telsa Motors working to employ that technology in driverless vehicles.

So, after reading both of the articles that appeared on the same glassBYTEs.com™ e-Newsletter I began wondering if future technology could be developed to let auto and truck drivers know if the auto glass in the car they are driving or are passengers has been properly replaced. Perhaps a farfetched idea you’d say, but since we all know that a windshield that is being replaced has to be properly installed to ensure that the passenger side air bag deploys correctly to protect occupants and to also maintain structural integrity of the roof; maybe not. As I’ve heard a number of people say over the years, “It’s going to take some politician’s family member or someone important to be killed for something to be done to ensure the safe installation of auto glass.” Certainly no one wants that to happen. As Neil so aptly wrote:

“This writer is truly tired of having nightmares that “Freddy the hack” is becoming the ugly face of today’s automotive glass industry. I see it more and more each day and most worrisome is the complete lack of concern by many within our industry. How can we police ourselves or be policed is the $ 64,000 question that has to be addressed and answered some day, hopefully sooner rather than later. If we continue to bury our collective heads in the sand, it will be our own necks that get hacked, as well as more unfortunate windshields.”

I know of countless AGRR professionals who strive to ensure that auto glass is installed properly and spare no expense to do so. But without either the industry as a whole taking a more active interest or governmental authorities taking a regulatory role in the AGRR industry maybe someone can develop a technology to alerts drivers and passengers alike that the car they are riding in is indeed safe to drive, or not.

Just sayin’.

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Just Sayin’ Blog – A Matter of Fairness

Recently I was forwarded a letter that Safelite Solutions (“Safelite” “SGC Network”) sent to an auto glass repair and replacement (AGRR) company.  The letter related to work that the company had done for a consumer that happened to be insured with a company for which Safelite manages glass losses. The AGRR company had done a replacement and was required to send the bill for the work that was done for the consumer through Safelite in order to receive payment. The letter that was received started out stating:

“The SGC Network is currently in the process of performing a random fast cure kit Audit.”

The letter went on to state:

“Please fax copies of the work orders/invoices that include the urethane lot stickers. Do not send proof of purchase or receipts. The only acceptable documentation is the urethane lot sticker attached to the invoice or work order. Please forward to ATTN: SGCNetwork at 614-210-9941 within the next three business days.”

Have you seen or received one of these letters? I hadn’t seen one before. What was requested certainly seemed reasonable to me and the company also thought the request was reasonable. The company had the information readily available since the information is required under various sections of the Auto Glass Replacement Safety Standard that is administered by the Auto Glass Safety Council™. What was interesting about the request was that Safelite was taking on the role as an independent 3rd party auditor in asking for the information. Who do you think performs that function when and if Safelite audits its own use of a “fast cure kit”?

Take a minute and look up the word “fairness” on dictionary.com and you’ll find the following:

Noun

“the state, condition, or quality of being fairor free from bias or injustice; 

evenhandedness”

            Adjective

“free from discrimination, dishonesty, etc; just; impartial”

            Adverb

“in a fair way; correctly: act fair, now!”

It’s also interesting to see the word fairness shown via TH!NIKMAP’s Visual Thesaurus®.

 Fairness 2

 

So does it smack of “fairness” that a retail auto glass company that competes for auto glass repairs and replacements in the United States is also given responsibility for performing audits of competing AGRR companies to determine if they are using a “fast cure kit”? It doesn’t seem that Safelite would be the appropriate entity to audit others if you applied the definitions of fairness:

“the state, condition, or quality of being fairor free from bias or 

injustice; evenhandedness”

“free from discrimination, dishonesty, etc; just; impartial”

“in a fair way; correctly: act fair, now!”

They certainly aren’t “free from bias” and it doesn’t seem as though they would have a strong desire to adhere to the idea of “evenhandedness”. I don’t see how they could be “impartial”. And it would seem impossible that the act of their being the auditor would be accomplished “in a fair way”.

To me it seems to defy logic when the corporate mission of any company must be to grow market share and produce increased value to its shareholders for it to be possible for them to be an independent auditor of others in the industry in which they compete.

Safelite’s company web site states:

We must do what’s right, even when no one’s watching

This means living by our values and being accountable. It is about how we treat our staff, our customers and members of our local community. We reinforce this throughout our corporate structure with legal compliances and ethics training, an employee ethics hotline and numerous channels for feedback and concerns.”

Certainly words any company would be proud to adhere. It seem appropriate to ask “who’s watching” those that are watching us? Do you think that there’s a 3rd party auditor that’s auditing the auditor?

I think you can ask the same question relating to the “pre-inspections of auto glass claims” that was discussed in a glassBYTEs article titled Safelite Solutions Accepts Recognition for Pre-Inspection of Auto Glass Claims” in May of last year. Does that practice seem to smack of “fairness” to you?

As most everyone on the planet knows, Super Bowl XLVIII is coming this Sunday, February 2, 2014 between the Denver Broncos and the Seattle Seahawks. The officiating crew this year is led by veteran referee Terry McAulay. What if for the game this year a crew of Denver Bronco fans is allowed to officiate the game instead of the impartial officials that have been selected by the NFL? If that was allowed to happen how many calls do you think would go Denver’s way? Even the most ardent Bronco fan hoping for a win for their team would see that as both blatantly “unfair” and “unjust” to the Seattle Seahawks team.

So as “A Matter of Fairness”, who thinks that how Safelite operates as an auditor and/or inspector is:

“the state, condition, or quality of being fairor free from bias or 

injustice; evenhandedness”

“free from discrimination, dishonesty, etc; just; impartial”

“in a fair way; correctly: act fair, now!”

Just sayin’.

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Just Sayin’ Blog – Doing the Right Thing Isn’t Always Easy

Whether you are an auto glass shop owner or an auto glass technician working in the auto glass repair and replacement (AGRR) industry, following the Auto Glass Replacement Safety Standard® isn’t easy, nor should it be. The AGRSS® Standard has rules and best practices which requires a higher level of diligence and reporting to be adhered to on the part of both the auto glass company and its technicians. Deciding as a company to fully embrace the standard and fulfill all of its requirements separates your company and your auto glass technicians from other companies which you compete. As a company you make the decision to follow the AGRSS® Standard then take the additional step and join the Auto Glass Safety Council™ as a registered company. Being a registered company requires that you participate in the non-profit organization’s Validation Program. Understand that if you’re a registered company, following the standard tells your customers that you are willing to open yourself to a 3rd party validation and inspection to ensure that you indeed follow the rules of the standard.

For the purposes of full disclosure, I sit on the board of directors of the Auto Glass Safety Council™. The Auto Glass Safety Council™ consists of countless industry members who donate their time and efforts to maintain the standard. They and/or the companies they work for pay for the time and travel required to spend working on behalf of the AGRSS® Standard. No one is paid for the work that they do.

By following the AGRSS® Standard you set yourself apart from others in the industry that’ve chosen not to do so; whether for reasons of profit, lack of knowledge or perhaps that you just don’t care about the safety issues involved. I’m not sure what would cause a company to not follow AGRSS®, but it has to be for one of those reasons. There are 8 deliverables that an auto glass company must adhere to comply with the standard. They are:

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Adhering to the AGRSS® Standard requires that you follow all 8 of the above deliverables. Does your company follow the standard and the deliverables? How do your customers know that you do?

A number of networks and/or third party administrators (TPA) require that auto glass shops that do replacements on the behalf of network customers replace glass according to the AGRSS® Standard. How is it possible for those networks to know that each replacement is actually performed to the standard? The only way for a network to confirm that every glass replacement is completed according to the standard is to require membership of every glass shop that does work on its behalf. No network or TPA, to my knowledge, requires 100% of the glass companies that do its replacements be members of the Auto Glass Safety Council™ to validate that its members are indeed completing replacements according to the AGRSS® Standard.

There are insurance companies that require auto glass shops that do replacements for their policyholders to complete them according to the AGRSS® standard. But what, if anything, do those companies do to enforce their own requirement? I’m not sure the answer to that question, but I’m not aware of anything more than an auto glass company being required to just say that they do installations according to the AGRSS® standard.

Do insurance companies ask you to install used glass on older cars or on cars involved in collisions? That claim has been made recently and that request is not allowable under the AGRSS® Standard. If asked would you install a used part in a consumer’s car when you can’t determine how it may have originally been installed?

Here are a few questions that are important to ask if you say you follow the standard, but don’t use a 1 to 4 hour fast cure Safe Drive Away-Time (SDAT) urethane:

·         If you’re an auto glass shop that uses a urethane that requires 24 hours or more to provide a SDAT do you actually inform your customer that they can’t drive their car for 24 hours?

·         Do you really think that if your customer is told that the car isn’t safe to drive for 24 hours that they actually will follow your instructions?

·         What do you think happens when you do the installation at their place of work knowing that they will be driving at the end of the day?

If the urethane you’re using requires a specific humidity and/or temperature level to cure properly, do your auto glass technicians have equipment with them that tells them that they are in compliance with the urethane they’re using?

What do you do if you encounter rust when doing an installation? Do you do the repair required to ensure that you comply with the standard? Do you go ahead with a replacement when there is rust damage that must be repaired according to the standard without actually doing all that needs to be done to ensure compliance? Would you walk away from a job if the customer won’t do what is required to fix a rust issue? It’s not easy to follow the AGRSS® standard.

To be sure, to do all that is required to be done by an auto glass company, auto glass technicians that perform the replacements and those who are tasked to keep proper records to execute all of the deliverables of the AGRSS® Standard isn’t easy as I said, but it is certainly achievable by companies and auto glass technicians that care. Fully knowing that a company or network or TPA that professes it follows the standard can certainly be called into question. The only way to know if some company is truly conforming to the standard is to be validated it by an independent 3rd party company.

The standard is a challenge. It is made to be. Validations can only be confirmed by an independent 3rd party organization approved to complete the inspection of an auto glass shop that says it adheres to the standard. To proclaim that you follow the AGRSS® Standard and not also back it up with an independent 3rd party verification would be similar to saying that the Affordable Care Act and HealthCare.gov has been a rousing success from its rollout on October 1st. The Affordable Care Act and HealthCare.gov may indeed ultimately provide what some profess that it will provide, but just saying so doesn’t mean that it has or will.

By the way, just because you are a registered company with the Auto Glass Safety Council™ and follow the AGRSS® Standard doesn’t mean that insurance companies or consumers will beat a path to your door. Not yet anyway. Doing the right thing when it comes to ensuring your customers safety should be enough.

There will certainly be those who read this blog who will disagree with me as to the “how” we ensure that consumers are protected when it comes time to having their glass replaced, but ensuring that consumers receive adequate protection when having auto glass replaced should be a concern to us all. That is of course if you care about consumers and the AGRR industry you wish to participate.

Just sayin’.

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