If you manage a reconditioning operation, how you structure the flow of cars through that workflow makes a significant difference in recon’s contribution to sales.
The objective here is to get used cars to sale-ready quality status quicker to sell more of your vehicles within the first 30 days you own it (Used-car experts tell us that window is now closer to 14 days!) Dealers consistently doing so have achieved a recon time-to-line turn of three to five days.
These principles apply to both manually operated and software-based reconditioning. Either system works best where the workflow is structured by well-defined action steps. This article looks at their importance and why.
Oil the Assembly Line
In reconditioning, the idea is to move newly acquired vehicles to sale-ready status through a minimally disrupted continuum – think of an assembly line. There needs to be checks and balances in this process, but too many slow down the line. When the line slows, time to line and the critical metric it supports, speed to sale, stumble.
When your line stumbles, vehicle output dribbles rather than flows. Dribbling outputs create problems for you – increasing your daily per-car holding cost depreciation, escalating frustration and contributing to missed sales opportunities and weakened grosses.
To evaluate these observations, I studied the reconditioning data of 66 dealerships, half reporting fast time-to-line results, the other 33 showing slower times. These dealerships used reconditioning software. However, these findings apply equally to manual reconditioning. My fundamental discoveries are:
- The number of steps the dealership has designed into its manual or automated recon workflow directly affects time-to-line speed. Stores that use fewer core steps rather than many are 74% more likely to achieve time-to-line outcomes.
- Stores using Step Notifications to alert next-in-line individuals that previous work has been completed meet time-to-line goals 64% of the time. Dealers not using these notifications miss that goal 83% of the time.
Best-Practice Steps
Best Practice workflow steps, in not necessarily this order, are the optimum number that works well for most dealerships:
- Purchase/Auction
- Trade not Cleared
- Inspection
- Used Car Manager Approval
- Service Repair
- Parts Hold
- Offsite Sublet
- Body Shop
- Detail
- Photos
- Sale-Ready or
- Wholesale
Detail times are a common bottleneck. My survey revealed that 88% of the slower time-to-line stores had high detail times – 4.7 days per vehicle compared to 1.7 days for faster stores.
Photo time turnaround can be another bottleneck. Few of the 66 stores in my study had in their step lineup a Photos Step. Not having this step put into place seems to be a missed opportunity for time-to-line improvement.
Approval Step
One of the most productive relationships a dealership should be enjoying is between the service department and the used-car manager. Here we’re talking about an automated process to alert the used-car manager or their proxy when repair estimates are complete to gain work approval quickly. Automation puts this step on these individuals’ phones, texts or emails for access and approval 24/7.
Fast Approvals here stimulate repair work speed and contributed to faster overall annual output.
Summary
With this information and data from this report, I would have this layout at my store, a three-store group. Here are my concluding thoughts about workflow efficiency and time-to-line speed:
- Have a fast workflow of 10-12 steps, adding any steps needed for loaners, special equipment or recall.
- Limit the number of critical people engaging with your system to track what is happening and moving what vehicles to make sure units are going through the system correctly and promptly. I recommend this group be the internal writer, service manager, detail manager, used car techs, used car manager and the back parts counter worker.
- Have Step Notifications in place to make sure the correct person is moving the unit or taking care of the unit’s needs in that step. This individual can then judge step times and identify who ensures the correct person oversees that step in the workflow.
- Use Work Item details within the steps to track the cost of units and make sure approved amounts and declined work are recorded. This practice will stop bills that should not have been approved. Work Items reduce internal expenditures and reveal the gross per-copy to the holding cost per unit.
- For detail, have all detailers on flat rate to reinforce the need for productivity and so management can track hours and hours sold per detail. Now you can accurately identify top performers and know with accuracy how many detailers your workflow requires.
- Remove units awaiting parts into detail to eliminate parts-waiting downtime.
Modern reconditioning to meet today’s consumer demand, whatever the market, is sound science as well as efficient, transparent and accountable. The system must get cars sale-ready fast to ensure the dealership meets customer demand efficiently and engagingly.
Dustin Jones (pictured, left) is a performance manager for reconditioning workflow software company Rapid Recon. In this capacity, he works directly with dealership managers to improve their reconditioning workflow efficiency and performance.
