Page 22 - Australian Paint & Panel March-April 2020

BUSINESS & TECHNOLOGY • GROUP CHAT
22
PAINT&PANEL MARCH / APRIL 2020
22 AMA GROUP • 24 STRATEGIC COLLISION
CHANGING BUSINESS MODELS
IT IS BECOMING INCREASINGLY CHALLENGING TO RUN A STAND ALONE COLLISION REPAIR SHOP, ESPECIALLY IF YOU HAVE
TO COMPETE AGAINST GROUPS WITH BETTER BUYING POWER. SAM STREET TALKED TO SOME OF THE INDUSTRY PLAYERS ABOUT THEIR DIFFERENT MODELS AND STRATEGIES.
Steve Bubulj
INTEGRATION TIME AT AMA
AMA GROUP HAS BEEN ON A MASSIVE BUYING SPREE IN THE LAST COUPLE OF YEARS AND IS NOW A BILLION DOLLAR BUSINESS. SAM STREET CAUGHT UP WITH PANEL DIVISION CEO STEVE BUBULJ TO HEAR ABOUT INTEGRATION, ADAS STRATEGY AND FUTURE PLANS.
BUBULJ IS WELL KNOWN IN THE INDUSTRY
from his time at insurers such as IAG, Youi and QBE. My first question to Bubulj was what is it like being a ‘game- keeper turned poacher’.
“There’s always been a ‘fence’ between the repair industry and insurance industry. Once upon a time it was a high fence but that is now much smaller than it used to be, so it wasn’t such a big jump,” he said.
“Having worked in the insurance indus- try I have a good understanding of what our customers want and if we don’t get that bit right, then there is no business.
“Coming over wasn’t really a hard de- cision in the end, the only hard bit was that I was in a great team and company at QBE at the time.
“The opportunity to work with Andy (Hopkins) and the team here was too good to pass up. There are so many good people here and there’s a great culture of supporting each other,” he said.
With the advent of ADAS and other vehicle technology challenges, the straightforward fixed cost repair system is less tenable, how is AMA Group navi- gating this?
“We have many arrangements with many insurers and they are all different. In terms of that obviously we agree to an average price and volume. Yes, it’s abso- lutely a fact that margins are being con- strained because of a number of factors.
“Number one, volume has been an is- sue because of the dry weather with less accidents and that has had impacts across the entire industry. Secondly, take ADAS aside, if you normalise that you still have the issue of the input costs that are coming in that weren’t there 18
months ago - or if they were it was on a very small scale.
“We know from both local and global re- ports that claim frequency is expected to de- cline over time, and cost of repairs will go up.
“The organisation here has been unbe- lievable at being competitive – supply chain, parts, consistency of production. There will be an increasing focus on price because we have to get our heads around ADAS.
“Safety and quality are paramount. How do we get our customers back on the road quickly when ADAS will impact cycle times? If cycle time goes up that impacts the volume – so that has to impact commer- cials, excluding any of the increase in costs during operations. Thirdly, how do we en- sure that our ADAS solution is competitive?
“We’re working through various options concerning ADAS solutions both in-house and outsourcing. So we’re getting a better handle on the costs and the challenges.
CAPITAL S.M.A.R.T INTEGRATION
“WhileS.M.A.R.Tisoperatingitsownmodel, it is being integrated into the group. The phi- losophy around integration is that the S.M.A.R.T business is dedicated to Suncorp and that’s set up so well. To interrupt opera- tions and try to melt that down into the AMA Group makes no sense. So, there’s an integra- tion team set up which is well underway, in- cluding procurement under the banner of shared services.
“It’s interesting that you have two compa- nies doing the same thing, with the same ethos yet are very, very different. Dave Me- rino runs S.M.A.R.T and we talk every day and that helps us to get a consistency around people and culture. Going forward there will be one procurement depart-