Simple Solutions and Big Changes - Ruth Moring-Beale

The Perfect Storm feels really complicated. We’re facing massive challenge after massive challenge, and all we really want is for someone to come and give us a simple solution that’ll fix everything.

It sounds like a pipe dream. Like someone can wave a magic wand and all the issues will disappear.

And we all know there’s no such thing as a magic wand. But that doesn’t mean there aren’t any simple solutions out there. You just need a bit of imagination, a bit of vision, and the willingness to do things differently.

This week, Kirsty’s searching for simplicity with Ruth Moring-Beale

 

It’s time to stand up and be counted

Ruth is a second-generation owner of Morelli, one of the most forward-thinking paint distributors in our sector. But while paint is only one component of a successful repair, Ruth’s been looking deeper into the supply chain issues holding up the industry. Morelli is well-known as a company who tries to put the customer at the forefront of all that they do because if their customers stay in business, so do Morelli. They build long-term relationships with their customers and partners such as the vehicle manufacturers, some of which stretch back over the entire 65 years that they have been in business.

And she thinks improving things might not be as difficult as you’d think…

“I'm very concerned about the winter but I'm a bear of little brain when it comes to stuff like this - I like simple solutions! There do seem to be some relatively simple solutions to some of the problems we’re facing at the moment, but they involve a lot of work to achieve.”

Key issues for the industry are parts supply, the credit squeeze from parts suppliers which is impacting cash at all levels, courtesy car supply and of course, the looming energy crisis.

“For example, I’ve spoken to a lot of people across the industry with much wider knowledge than me on the issue of courtesy cars. The VMs can’t produce the numbers of cars that the industry needs at the moment due to all the issues we are well aware of and are unlikely to either be able to or want to supply these cars in the same quantities they have done previously moving forward. This puts them in breach of their promise to their policy holders because most repairers are struggling to supply the cars to customers in the volumes they have done previously, which in turn puts the repairer in breach of contract to their work provider. Therefore, it would be a relatively simple problem to solve if the insurers simply stopped selling policies which promised a free courtesy car. If the wording moved to something like “a courtesy car will be provided where possible” or simply didn’t promise a mobility solution, this issue could potentially be solved within 6 months to a year as customers expectations would change. I speak to so many repairers who track the usage of the courtesy cars that they provide and a huge proportion of them are simply not used during the hire period, staying parked at home whilst the customer uses other mobility solutions, especially now that so many people work from home.

It’ll be a big change in the way some of these larger companies work, just to make such a small switch, but it’ll make a difference. And there needs to be a collective will to do it. The minute one person does it, the others look at their stance. It goes from ‘oh, I’m not doing that’ to becoming just a standard thing.”

 

Someone needs to be brave

The next issue is the credit squeeze that has come about since the demise of Nationwide caused such huge losses across the industry. Credit agencies have “red lined” the accident repair sector as a result, causing huge issues for repairers.

“So many of our repairers, from large groups through to independent repairers have had their credit facilities cut by large dealer groups and parts suppliers over the last year that this is causing huge impact on cash flow. This is compounded by the impact of parts delays. Most repairs now have a much higher proportion of cars in WIP waiting for parts than ever before. In most cases they have to pay for the parts that they can get up front and sometimes wait weeks or even months for the remaining parts. This means that they are financing the repair to sit in the car park waiting for the backorders to arrive. They therefore get to their credit limits much sooner and have to almost pay as they go for parts. This is causing huge cash flow issues across the industry.

The “simple” solution” is for work providers to trust the repairers and begin to part-fund the repairs to enable repairers to continue to trade. Some forward-thinking insurers and work providers are beginning to help with this issue in various ways, but it is sporadic, and I believe needs a change of emphasis across the industry. It obviously involves a huge amount of trust between repairers and work providers but it’s not an insurmountable issue.

We are seeing larger repairs being refused by repairers if they have a high proportion of parts, especially within the VM approved repairer sector as they simply don’t want large jobs sitting around waiting for parts and having to finance a huge parts bill. VM approved repairers don’t have the option in many cases to repair over replace and non-genuine and green parts is mostly not an option, so this problem is exacerbated for the VM repairer networks.”

 

The repair industry is a key part of the motor industry as a whole. Without it, we’re all in real trouble. So something needs to be done. We need a collective voice.

“There are initiatives being started by some very influential and well-respected people within the industry who are trying to come together to develop a collective voice for the industry. Everyone’s worried about the state of the industry but we don’t really have an effective trade body that represents the repairers and shouts their corner on these issues. If we did, they would be lobbying at the right level to, for example, get the credit issue sorted with the various agencies who set the rules for this. “

It doesn’t matter if you’re an insurer, a shop, or a manufacturer-approved shop. The issues are different, but the impacts are the same.”

 

Collective action. An industry coming together. Collaboration. Sounds good to us. That’s what Cogent Hire is all about after all. But other than convincing manufacturers to approve different parts and components, what can we do?

Ruth’s got one more idea. Help each other out.

“For repairers to survive this, they’ve got to have some help from the people who have the ability to do that. If insurers can make a deal with parts suppliers, or start prefunding repairs, or just trust repairers more when it comes to estimates, we’d be in a stronger place.”

“I know that involves a huge leap of faith, but there’s somewhere between that solution and where we are right now that’ll keep the industry working.”

The perfect storm doesn’t need perfect solutions. It needs workable ones. Simple ones. Small, incremental tweaks that add up to big, big changes.

And it needs us all to work together. Ruth’s got us convinced. Collaboration. Sustainable solutions. And a business model that works today, tomorrow, and for years to come.

 

Sign us up!