While Also Reconditioning Inventory For Pre-Owned Vehicle Profitability

By Anthony Greenhalgh

Originally published in the May 2021 edition of Fixed Ops Magazine

Load balancing has critical implications for inventory turn – and thus, service tech efficiency.

Ignoring load balancing can leave service techs either jammed up or idling. We in the car business face the reality that great techs are not around every corner. Really good technicians are hard to find. As department heads, you want to do everything in your power to ensure that your techs are efficient and not frustrated by too much or too little work to do.

Load balancing is also crucial to the productivity of the used vehicle reconditioning side of fixed ops. Why? Inventory availability is thin. The buying cadence has internal service work bottle necked one day and empty the next. Workload balancing will even out the work inflow – and also the output – so the reconditioning rhythm remains constant regardless of recon volume.

We have all seen this scenario before: It was a heavy sales weekend. The used car manager bought a ton of auction inventory. The first words out of the fixed department manager’s mouth were, “Well, we could get all of these vehicles reconditioned in four days if you would quit buying 30 at once. If you would just buy six vehicles a day, that would be great.”

The fact is, this is the car business. Buying vehicles at an even cadence is not a reality we will see anytime soon. So, as in the past scenario, the service manager panicked and pulled line technicians to do service vehicles in 48 hours. Flat-rate-dedicated technicians hired to handle pre-owned inventory flagged 22 hours and were out of work by Tuesday afternoon. Then the problem was further exacerbated by throwing these vehicles to detail in panic mode and subletting the overflow detail work to an outside vendor. All of the panic-level decision making produced 30 subpar reconditioned vehicles on the frontline along with dedicated flat rate techs who were upset because the work promised to them was pulled and a reduced internal gross because the detail work was sublet.

Load balance is a crucial metric to be managed if a dealer and his or her team are to create additional turns to inventory and recondition that pre-owned vehicle inventory properly to drive sold-vehicle profitability.

Being aware of how recon work is dispatched can significantly impact your reconditioning time-to-line, or speed at which you move vehicles from off-transport to sale-ready status, as well as on technician efficiency. I see so many stores adopt the “first in, first out” workload model and they are consistently behind. If your tech is looking for work at 3 p.m., that is not the time to start work on a 92,000-mile time hog. He will pull it in, rack it, and save the job for tomorrow. Instead, rack the 11,000-mile certified pre-owned unit that needs a thorough inspection, the required replacement parts, and have it moving onto cosmetic and detail and out the door that night. The tech will still have time to take on the time-consuming high mileage vehicle in the morning.

If you feel your workload is bottle necking because you just got slammed with 30 units, it is certainly okay to detail a vehicle first. Our most successful time-to-line dealerships detail and photo before recon when it makes sense for late-model, low-mileage vehicles having no noticeable cosmetic damage.

Load balancing your techs does not just mean service techs. It includes your mechanical, detail, and cosmetic techs.

Your service manager is likely already using load balancing to ensure your service bays and service technicians maximize those assets’ daily overhead costs. Shop loading tools help even out work throughout the available hours to prevent early-morning bottlenecks and reduce delays that run up costs and irritate service customers.

For the reconditioning shop, the best tool for recon load balance is a workflow communications and accountability dealership software tool. Because this tool is capturing VIN and related data about vehicles flowing into reconditioning, it gives managers a top-down and granular look at the critical metrics needed to ensure vehicles move smoothly to the sale lot. This system measures time-to-line, or how quickly vehicles are getting from acquisition to sale-ready status. The efficiency standard is three to five days. By using a recon workflow management tool, dealers manage the workload through mechanical, detail, body shop and final photography to the availability of technicians and vendors. Smooth load balancing keeps vehicles moving, technicians and detailers busy, and the used car department happy.

All these personalities have at-a-glance convenience into all this workflow with a check of their computer or smartphone screen. If rebalancing is indicated, those changes can be promptly communicated by phone, text, email, or red-flag highlighted notes right into the department’s workflow software or the individual assigned to the act. Delays, bottlenecks – or forgotten or neglected vehicles – that upset workflow need not happen.

The used car department, your customer, that is currently defined by lean used vehicle supply, needs to get what vehicles the dealership does have sale-ready quickly. Recon will only be an asset when a consistent time-to-line metric is diligently maintained.

About Rapid Recon

Reconditioning workflow automation from Rapid Recon is the industry standard in time-to-line inventory turn and speed-to-sale vehicle revenue enhancement for automotive retailers. Benchmarking data based on 13 million vehicles processed uniquely positions Rapid Recon to advise dealers on how to improve their store’s profitability. Used by more than 2,000 dealerships, Rapid Recon ensures the accountability of processes, property, and people. Hence, dealers know answers quickly, find assets anywhere, and sell vehicles promptly to grow dealership profitability. www.rapidrecon.com CALL US: +650-999-0497