AutoSuccess Magazine – September 1, 2022
By Jim Leman
OpenRoad Auto Group is the largest-volume automotive retail group in British Columbia, Canada. Since 2000, it has grown into 21 brands and 34 stores, including dealerships in Seattle and Bellevue, Washington.
Sulmas Mosleh is the regional dealer administrator for the group’s Mazda, Toyota and Lexus brands in Port Moody and a second Toyota store in Abbotsford, British Columbia. Andrew Sciampacone is the central reconditioning manager.
When the time to line gets faster, cars sell sooner, customer demand is met and holding cost erosion is minimized. Holding cost management is often ignored or misunderstood, but its margin abuse can be considerable.
“That streamlining work was Sulmas’ doing,” Sciampacone said. “She talked to the GMs, the regional vice president and our stores’ fixed ops director to map out these processes and steps — and assigned a step manager — to accomplish our goal.”
Among essential time metrics to enhance are:
• Trade/transport to recon/DMS login time
• Pre-inspection and mechanical inspection times
• Parts-delivered-to-technician time
• Technician-per-vehicle time
• Handoff-to-detailing time
• Vendor-or-sublet-completion time and total time-to-line time
• Time to vehicle location on the lot
• Recon / holding cost / vendor dollars per vehicle dollars.
“We originally didn’t have a reconditioning system like Rapid Recon here,” Sciampacone said. “Every dealership in our region did something different to manage their recon processes. At that time, I was a technician for our Mazda store, where we used a Google-like tracking sheet. That was no way to track anything.”
“The step structure gives us apples-to-apples data for store-to-store and across-the-region comparisons,” Mosleh said. “Developing and using this performance reporting consistency was most important for us.”
“It’s not unusual for dealers still operating reconditioning with paper and spreadsheet tools to lack the data and reporting tools to measure reconditioning accurately and in a meaningful way,” Sciampacone said.
Holding cost is a per vehicle, per day depreciation cost (floorplan, market depreciation, opportunity cost not to be sale-ready). This cost begins at acquisition and ends when a car is retailed or wholesaled. For import dealerships like OpenRoad, holding costs can be $80 or more per car per day. A vehicle taking 15 days instead of seven to get through recon costs the dealership $1,200 instead of $560.
Jones’s investigation identified delays in sublet detailing/cosmetics. These services took an average of five to six days to complete their assigned work. “When we studied that data from Rapid, that was shocking to see,” Mosleh said. “When our GMs saw these numbers, they mobilized. They told us, ‘Detail shouldn’t be taking more than four days — you need to bring in more guys or do something.’ That was an eye-opener — detail alone consuming more than half of our seven-day time-to-line goal?”
Vendor Advantage connects dealers with all their vendors through a vendor-specific portal into the dealer’s Rapid Recon workflow system. Vendors see and manage only the assignments and vehicles assigned to them. The tool delivers vendor and dealer accountability for obtaining estimate approvals, as well as automated updates to both systems to eliminate guesswork and downtime. It clarifies and expedites communications and improves progress tracking and providestime and date stamp accountability.
“Rapid Recon is a powerful program. I wouldn’t want to manage recon if we didn’t have this solution for getting our vehicles sale-ready faster,” Sciampacone said. “It would be just too frustrating.”