Continuous Process Improvement in Recon

Over the last 36 months, we have grappled with the question of why some dealerships, with known difficulties in reconditioning, still hang-on to their old processes. Two reasons keep popping up: a fear or risk of “rocking the boat,” and the idea that “everything is under control.”

After multiple attempts to “fix” recon by using a new and improved spreadsheet, whiteboard, routing tag or endless other ideas by dealer management, there is a perception that any other new attempt will not succeed. And blindly, the UCM, recon and service manager don’t want to risk upsetting what they believe already is working, and clearly feel they have everything under control. Sound familiar? For them, change is only mandated when recon performance has reached a breaking point.

“Continuous process improvement” is defined as a systems approach to improving workflow in an organization. The process uncovers problems without finger pointing, determines ways to fix them and then monitors the outcomes. It is, simply, a game changer. Measurement and evaluation is part of the process, which may provide both monetary and non-monetary rewards.

In reconditioning, a work ow management system is essential to the continuous process improvement. It is the transparent thread that provides the real-time accountability for the time it takes to get a car ready to sell — the time-to-market connection to every car, every step and every user. All stakeholders, from the dealer to the techs, have equal access to the same information in order to make the best immediate decisions or corrections. Additionally, a workflow tool in recon provides other benefits:

  • It puts everyone on the same page — From purchased or traded to sold, every car is accounted for in real-time. Notifications are automatically sent by the system when a car is moved to
the next step, so there is full accountability. With mobile tools for the iPhone, Android and Windows mobile platforms, there is no need to look further than your mobile to find a car or approve recommended repairs. The blame game of the past is replaced by performance metrics, visibility and accountability.
  • It provides more cars to sell — Typically, in the first 60 to 90 days, a new starting time- to-market becomes clear. This will range from six days to 12 days, or possibly even higher. Equipped with both the actual times and the ability to make process and resource adjustments, the path to get to three to six days — half of the current structure is in place to dial it down. If, for instance, a typical starting time-to-market is 10 days, it could be cut in half to 5 days. The difference between 10 and five days is two added turns. This is not blue-sky talk; it’s real data. What would two more turns do to your bottom line?
  • It offers the opportunity for continuous process improvement This is probably the most important benefit of all to a dealership that wants to be the best run, most profitable and highest CSI in their market. The dealerships and groups who have a performance management system have the real numbers to manage and measure, and can react quickly to bottlenecks. They have the ability to balance their resources to manage the intake on a daily basis and plan for their future. This creates a culture of continuous process improvement that exists in so many successful businesses today, but has been nearly impossible to instill into reconditioning. 
Sooner or later, a performance management system will make it to your short list and become a “must have.” You will most likely hear about it at a “20 Group Meeting” as a “best practice.” If this has not happened yet, maybe you should be the one to bring it up.

Dennis McGinn is the founder and CEO of Rapid Recon. He can be contacted at 866.268.3582, or by email at dmcginn@autosuccessonline.com

 

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