15 Jul Reconditioning Time-to-Market
Time to market (TTM) is the monthly average time from purchase or trade to the time sales are funded. You can think about it as the average time your cash is invested until it can be reinvested.
Most dealerships begin with the logical subset of TTM, which starts with reconditioning and ends when the car reaches the frontline. This makes sense, because many times there is one person, such as the recon manager, who is accountable for that time period. And in many cases, their compensation is determined by keeping TTM under five to seven days. Recently, some dealerships — such as Gwinnett Place Ford (Van Tuyl) in Gwinnett, Georgia; Legacy Nissan in London, Kentucky; and Performance Ford (AMSI) in Charlotte,
North Carolina — have extended their TTM workflow systems to also include specific steps for F&I managers to take every deal from sold to contracted, scrubbed and funded. From the perspective of the owners, this opens up a whole new level of accountability and makes every deal completely visible — from dollars being invested to dollars being returned.
Measuring TTM requires a workflow system customized to the processes and resources specific to each dealership. This includes processes where the body shop, detail, sub-contractors, etc. are all common or shared, and even multiple fixed operations may be selected.
Instead of old-school methods — typically a spreadsheet or whiteboard — a modern TTM system uses mobile technology to send alerts when a car is ready to move to the next step. The clock starts and stops in real time for complete visibility; then, with a single “I am done” click, the vehicle advances to the next step — no more delays or guess work. Tech notes may be added for clarity and keeps an open dialogue going about each vehicle. Subs are alerted, in real-time, when they need to show up, meaning no more wasted trips.
Individuals trust a transparent system. It holds each worker accountable and on an equal footing. In fact, with a TTM system, techs and F&I managers can show how proficient they really are when they own each of their own steps, especially with their names right on them.
Managing TTM with a work ow system in place simplifies the process, because everyone knows where all the cars are all the time. Also, there’s no more valuable time wasted in chasing down the UCM for approval as the repair order may be reviewed and approved easily by text, regardless of the manager’s whereabouts or situation. Once you have the controls in place, you can be proactive and plan for the sales volume and turn rate that your business plan requires.
Finally, there are two overwhelming benefits to this approach. First, you know where all your cars are all the time and in real time. And second, every 2.5 days is another turn. To date, we have found that there are one to three turns being buried when TTM is not being managed. Perhaps it is time to recondition your reconditioning processes.
Dennis McGinn is the founder and CEO of Rapid Recon. He can be contacted at 866.268.3582, or by email at firstname.lastname@example.org.