Paint and Material Compensation and Cost Study

Executive Summary

The Paint and Material Compensation Cost Study is based on a peer-contributed panel of over 65 collision industry professionals. A cross-sample of representatives were interviewed to articulate their perspectives on the issues surrounding paint and material compensation from the viewpoint of their respective constituencies.

If requested, future topics will be discussed with the panel and feature a wide range of data, ideas and expertise. We anticipate the study will generate further discussion and introduce new evidence and ideas that

evolve in the collision repair industry.

Study Topic: Paint and Material Compensation Methodology

Innovative advances in paint and material technology have undoubtedly improved the quality of collision repairs in the United States. For some Repairers, receiving proper compensation for these advances have not presented a problem. For others, the lack of properly negotiated rates or alternative compensation methods have presented some serious challenges.

Although profitability on paint and materials may not be viewed as the most significant driver of a shop's success, it could be an inhibitor if not permitted to keep pace with future concerns.

On July 20th, 2011, in Salt Lake City, UT, the Collision Industry Conference (CIC) Refinish Committee, comprised of: Moderator, John Bosin, (Fix Auto), Doug Kelly, President, (CynCast), Aaron Marshall, CEO, (Marshall Auto Body), Joe Mattos, CEO, (Pro Finishes Plus) and Richard Palmer, CEO, (ComputerLogic), presented the topic: “Improving Paint Shop Efficiency in a Consolidating Market”. A segment of the presentation included the impact on the current methodology for paint and materials compensation in consideration of existing or potential new technology.

Due to time constraints, the panel had only a limited opportunity to fully discuss the topic during the scheduled session. To further explore the challenges related to this compensation methodology issue, panelist Richard Palmer commissioned this independent study.

In the interview process, key individuals and organizations have been identified to interact with the CIC Refinish Committee and continue the discussion.

Study Objectives

1. Consider the opinions of a representative cross-sample of constituencies to clarify the

profitability/performance dynamic of multiplying the number of refinish hours/units by a specified

dollar rate as a primary method of compensation for paint and material usage.

2. To identify the different methods of paint & materials compensation being used and estimate their

prevalence in the industry so that the CIC Refinish committee can recommend alternative solutions

based on the advantages and disadvantages of each method.

3. To identify the strengths and weaknesses of the different compensation methods relative to their

accuracy, fairness and ease of use.

4. To encourage suggestions from study respondents and consider factors important to the acceptance of

alternative compensation methods/systems by the insurance carriers.

5. Build an environment of collaboration by harnessing the power of the collective efforts of selected

individuals considered to be influential in future collision repair discussions. 4

Study Questions

1. What is your opinion of the current methodology used for paint and material compensation?

2. On a scale of 0 to 10 with 0 being “not important at all” and 10 being “extremely important”, where would you rate Paint & Material Compensation on the list of other issues that you're monitoring? Why would you rate that number to the issue?

3. What different methods of Paint & Materials Compensation are you aware of? What would you say

are the advantages and disadvantages of each method?

4. If it were up to you, what method would you use to address the P&M Compensation issue?

This report attempts to provide decision-makers with a third-party view of what a broad spectrum of industry stakeholders consider most important in the paint and material compensation discussion. It offers successfully proven alternative methods of compensation being used today and collaborative insight to add flexibility with fairness to insurers, repairers and suppliers in addressing the issue.

To see the full report, please click HERE

New PMCLogic version 6.4 released

ComputerLogic today announced its latest release, version 6.4, of the popular paint and materials management system, PMCLogic™.

PMCLogic users will immediately notice several significant enhancements surrounding cost and revenue analytics and receive updated paint and material price information. The new “Insurance Grouping Feature” aggregates insurer information for all vehicles repaired, along with other data imported from the 3 major estimation providers (Audatex, CCC and Mitchell), and provides informational reports that promote better communication within the insurance industry.
“These new features will add value to the repair process by providing a wealth of accurate data that will assist in the decision making process. Accurate data creates opportunities to reduce cost and increase revenue,” said Rick Palmer, CEO of ComputerLogic.

When generating reports, PMCLogic’s ability to segregate information by customer groups, allows PMCLogic users to identify trends and draw comparisons more easily. “The idea is to give repairers and insurers data which is actionable and provides them with the information they need to better manage their business,” added Palmer.

PMCLogic Version 6.4 also includes a new “Paint and Materials Sales and Cost Export Feature” which allows shops to export their actual paint and materials cost to a Body Shop Management System.

Rick Palmer concluded that “PMCLogic Version 6.4 is another major step forward in the evolution of PMCLogic and we invite all repairers and insurers to evaluate for themselves how P&M information, based on surface-area based calculations, improves the accuracy of data generated for paint and materials estimating.”

What PMCLogic Customer's are Saying...

"I have only been using PMCLogic for 2 months but have used it consistently and am finding that my insurers like the detailed invoices and accept them routinely. I believe in using real data for cost control and management and that’s why PMCLogic is a big part of how this shop is run.”
- Fred Haberl – Auto Body Resurrection CarStar – Lakeland, Florida
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"Since we started using PMCLogic 3 years ago, it has really helped our bottom-line, because we are able to invoice for the exact materials that actually go into a repair. ComputerLogic also does a great job with support."
- Mark Highfield - Regal Nissan of Roswell, Georgia
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"I just wanted to say thanks to everyone from PMCLogic. Thanks for all of your help - YOU ALL WERE AWSOME!!!!! The program is working well for us and we are making more profit and being paid for what we are using. THANKS! From all of us at Regal Pontiac!"
- Cherri Surrency - Regal Pontiac - Lakeland, Florida
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“PMCLogic is an amazing system, and from using it, I’ve gained the respect of our insurers. When you use PMCLogic, the truth is the truth. And PMCLogic puts an additional $9,000.00 a month into our cash flow.” -Ray Gunder – Gunder’s Auto Center – Lakeland, Florida
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“I don’t import CCC or Audatex in my business and P&M estimating takes me a little longer. But I did my first [PMCLogic] estimate the other day and it took me less than 5 minutes. This system is heads above Mitchell and PaintEx.”
-Barrett Smith – Auto Damage Experts – Tampa, Florida
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“I’ve been a PMCLogic user for a year and a half and I often review my paint and materials invoices with my DRP’s. Some shops are afraid to educate their insurers and jobbers about paint and materials costs and this needs to change. We plan to continue to use PMCLogic and help bring that change about!”
- Phillip Richmond- Scott’s Auto Body -Tehachapi, California
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“We’ve gradually been implementing PMCLogic into our estimating process for 3 months and are beginning to see the great potential to recover unrealized paint and materials compensation. PMCLogic will become a key feature for invoicing in the future.”
- Rick McMillan- Harrison’s Auto Body - Macon, Georgia

PMCLogic Frequently Asked Questions

What is PMCLogic?

PMCLogic is a management tool designed to easily and accurately calculate the amount of paint and materials used to repair and refinish a vehicle in order to return it to pre-accident condition. Information generated from this program can be used to:
1. Better manage paint and material inventory and purchasing
2. Provide accurate job costing for each vehicle repaired

3. Create a paint and material estimate and invoice

How does PMCLogic calculate materials used in the repair and refinish of a damaged vehicle?

ComputerLogic, Inc has worked with industry experts for years to create hundreds of specific templates based on the operation and “industry best practices” or OEM specifications. Each template contains a list of materials which would most likely be used in the repair, replace, and/or refinish of a specific class of vehicle. PMCLogic utilizes these templates to calculate the total amount of liquids and materials (“P&M”) used on a specific body panel and/or structural, custom or individual part.

Can I customize an estimate generated by PMCLogic to add or remove items?

Yes! When you create a PMCLogic estimate it is just that; an “estimate”. For the sake of inventory management accuracy, the “estimate” should be adjusted to include the items actually used in the repair of the vehicle after all work is completed. If, for example, a repair requires the use of seam sealer and that item is not automatically included in the template, it can quickly be added by double clicking on ‘seam sealer’ in the products catalog. Actual quantities used for each item can also easily be edited directly on the screen, as appropriate. The workflow process is defined as follows:
1. Create the estimate
2. Print the “work list” which details all the items to be used along with quantities
3. Attach the “work list” to the vehicle so the technicians can identify the items actually used
4. At the completion of the repair edit the “estimate” to reflect actual usage
5. Create the final “invoice”

How does PMCLogic calculate prices for paint and material?

PMCLogic receives pricing information directly from most manufactures which do business in the collision repair industry. For those few product manufacturers who do not send this information directly to ComputerLogic, Inc. their pricing information is researched through other sources such as distributors of these products and the Internet. PMCLogic uses these manufacturers’ highest published prices, which are typically referred to as List, MSP or Refinisher price. These prices, referred to as the “Reference Price”, are used to calculate the total P&M estimate and invoice total dollar amount shown to the customer. By setting a discount percentage based on their purchase price for these items, these same reference prices are used as the basis to calculate the actual job cost for that repair.

What is PMCLogic?

ComputerLogic, Inc. has created PMCLogic™, an unbiased documentation program that helps insurers and repairers create an accurate record of all paint and materials used in the repair process. Subscribers can create invoices that serve as documentation of the actual paint and materials used in the repair of specific vehicles.
Key features of the PMCLogic include:

· Paint pricing for all major brands
· Material pricing from major suppliers
· Multiple costing options for invoices
· Templates for every panel and every repair, replace and refinish operation
· Track & manage costs and profits by job or by insurance company
· Subscription includes regular updates and toll free support
· Built on Microsoft .Net platform
· Engineered by ComputerLogic…30 years of PB&E experience
· Easy to install, set-up and use!

PMCLogic™ takes the guesswork out of paint and material costing. It helps you fully document the materials you use in your repairs, and most of all, it helps you get paid properly for the paint and materials you use. Let’s stop guessing and start accurately documenting paint and material usage. True costs and fast documentation are within reach. Simply call (800) 933-6564 to learn how you can get started, RISK FREE. Or, go to http://www.PMCLogic.org for more information concerning this amazingly simple solution to a complex issue.

PMCLogic – Because Accurate Information Matters!