It’s good that your recon department knows that it needs to complete every service inspection in .5 (point five) days and detail in two days. That efficiency sounds good on paper. But the question arises, how do you get there?
Using reconditioning software will help here to a point. This software allows the used car director, service director, and recon director to track reconditioning workflow times. It also helps them identify bottlenecks along with other days that can cost the dealership considerable money if not corrected promptly.
From a holistic perspective, there is always something in the recon process that can be maximized. In the most productive and profitable recon operations, managers and staff have been acclimated and sensitive to recon economics. They think about how strategic recon creates and pushes efficiency improvements (and savings) throughout the organization. The advantage goes way beyond getting used cars on the frontline faster.
These operators start by practicing a disciplined approach to the reconditioning process. They recognize the connection between reconditioning speed and variable operation’s benefit of seeing backward through the recon pipeline. This strategic advantage enables them to adjust the flow of vehicles through the recon workflow on the fly to better meet evolving sales opportunities.
The phrase “time-to-line” has become the efficiency standard for measuring vehicle reconditioning speed for these operators. They set a time mark to hold reconditioning to meet their determined “time-to-line”, car-after-car. For these dealers, the mark is three to five days for completing mechanical, detail, and cosmetic reconditioning, including sublet vendor work.
The phrase “connecting to what you expect” means having reconditioning processes drilled down so strategically that any delays or negative trends appearing in the workflow are causes for an immediate investigation. This only happens when a team knows it is accountable for meeting the time-to-line metrics that have been established for each phase, including outside PDR, glass, mechanical, or collision repair vendors.
Top performers hold their teams accountable for achieving established performance marks daily for a particular store, across similar sister stores – and storewide across today’s large, multi-state groups.
With each department being held accountable for its assigned performance metrics, specific patterns are prone to come to light:
I talk to dealership management in variable and fixed departments. I’m always asking about processes, people, equipment movements, and why a particular task is done the way the dealership does it. This observation often brings opportunities to the surface to improve
time-to-line because I can see how tweaking something or retraining someone can help the store better connect to the results it seeks.
Two formidable obstacles to such improvement make me cringe each time I hear them spoken:
Consider an outside vendor handling detail work and their performance is consistently over your two-day time-to-line mark. Any time over that mark is an added cost to you.
A slow vendor can be justified by claiming that they are less expensive than some other competitors to tolerate a slow turn. That thinking gets a lot of dealers in trouble. Here’s how:
Who’s responsible for managing this dial-in discipline? In most stores, it’s the General Manager. The GM has the most demanding role, as he or she helps everyone come together. If you recall the 2000 sports drama, Remember the Titans, you’ll understand my point about time-to-line discipline. This coach’s challenge was bringing two teams, the offense and defense, together to work as one. Dealers, too, have two teams in the locker room to be coached: Sales and Parts/Services.
One final example, which regular readers of my columns for Fixed Ops Magazine will recall, highlights how connecting recon speed to strategic results helps you keep net. This case
involves a dealership looking at adding technician staff to boost productivity and profitability. As part of my analysis, I audited the service department’s payroll. I had my solution: an underperforming line technician cost the department $6,700 monthly in unrealized billable
hours. The loss is called unapplied time.
Unapplied time loss can happen in different scenarios. Still, the primary cause here was service manager oversight. This encouraged at least one technician to be less productive than his potential. After detailing my findings to the service manager and technician, both saw their need to manage more closely and be accountable for production requirements. The service manager saw the loss in profitability, and the technician saw the loss in compensation.
Understanding your shop’s unapplied and applied times – and where that unapplied time is coming from — is such a vital managerial task it must be top of mind for the service manager.
So, let’s talk about that, staff inefficiency. When you look at a dealership’s financial statement, you see a section in the service department category called “Declared Unapplied Time.” Technicians producing at a 70% efficiency cost their dealership 30% less growth. These are stark details. To move to break even or 100%, questions must be asked:
Recon Average Days-in-Recon and Time-to-Line significantly influence these outcomes.
Parts management is a prime example of dealers finding efficiencies to move speed-to-sale forward. The average lag for getting parts for vehicle reconditioning ranges from six to fourteen days. Consider these tips:
That is the biggest problem in recon today: lack of foresight. Can upholstery work make that downtime productive if a car is pulled out of a bay to wait for parts or other reasons? Everyone involved can develop a mindset of looking for and being ready to capture opportunities to keep workflow profitable.
One of the most significant efficiency, money, and time wasters for a car dealership is lax reconditioning management and accountability. As I said earlier, recon software helps improve these situations, but software alone won’t connect recon to hidden strategic improvements. You often need forensic-style scrutiny of your recon processes and people. Darkness called business loss lurks in shadows and routine thinking. When you shake those devils, light emerges that pinpoints ways to improve operational returns.
