15 Nov Accountability and Red Flags
Metrics based on verifiable facts, and not opinions, is the only way to ensure you have airtight accountability in recon. If you include the third dimension of managing the ups and downs of business cycles, then these same metrics are vital to both short and long-term profitability.
To produce solid metrics, your staff must be able to close out each job on the spot, in real-time, from a mobile phone, a tablet or a desktop computer with a single click. This is the first big step that eliminates excuses. The second step is to make these metrics visible so everyone can see the impact of a weak link or a bottleneck.
The third step is to have a time-to-market target that includes specific department-level metrics. For example, if your overall time-to-market (TTM) target is four days, then “Inspection,” “Service,” “Detail” and “Photos” must be consistantly under two days. “Parts<” “Body” and “Sublet,” as needed,account for the other two days.
The third step is to have a time-to-market target that includes specific department-level metrics. For example, if your overall time- to-market (TTM) target is four days, then “Inspection,” “Service,” “Detail” and “Photos” must be consistently under two days. “Parts,” “Body” and “Sublet,” as needed, account for the other two days.
What red flags point to the need for fact-based metrics?
- You are under the impression you don’t have a recon problem because you are running two to four days.
- You are still using a spreadsheet or shared Google doc.
- You think that a recon workflow solution is an incremental expense. This two- to four-day assumption normally exists when GMs are lacking verifiable metrics or proof. By delegating the recon responsibility and without metrics, they typically hear only the “good news” and the difficult cars are omitted.
After working with hundreds of dealers, I can say with certainty that, when compared to seeing the actual or measured “real” numbers, anything under a 7.5 day average (without metrics) is not reality.
Spreadsheets are not reliable since they depend on sampling only a few departments, such as service and detail. The sampling process has a strong tendency to ignore problem cars, which in turn, hides the real averages. The problem here is that all cars count, not just the best-case vehicles.
The “incremental expense” assumption is my favorite topic because I occasionally see GMs who are convinced they are “on top of recon.” However, I have yet to encounter one who can show me verifiable metrics based on work ow technology. To be more specific, once a properly designed, real-time workflow system is in place for 45 days, their verifiable average recon time is inevitably in the range of 7.5 days to as high as 18 days. It comes as quite a shock to some dealers that their “real” numbers are so high and have been hidden all this time by using a spreadsheet.
As a general rule, any store without workflow has two inventory turns buried in recon. This by itself makes it at least cost neutral, but this is actually not the big win. The big ROI is what happens when you have used car sales and fixed operations/service on the same page and making timely decisions that work for both.
Finally, “a system is only as good as the people who use it.” While this is patently true, how do you get your people on board? You give them the most reliable and transparent tools available for them to be individually accountable. You give them the opportunity to close out a job from anywhere, with real-time capability and mobile apps, making the results visible to everyone.
Your good people want to be accountable. They are eager to prove they are doing a good job and have control over what is being reported to management. This, in turn, establishes the proof and validates your metrics. You probably will not like what the numbers tell you initially, but the reality is, you will have the facts and can proactively make changes in a positive way to bring those numbers down fast.
Recon will be a more efficient workplace when the numbers are trusted and individual work is valued. Red flags will automatically show up and get immediate attention, eliminating any real drag on recon time. e entire recon dynamics and business model of that department will come alive. It is a win/win for both the worker and for your bottom line.
Dennis McGinn is the founder and CEO of Rapid Recon. He can be contacted at 866.268.3582, or by email at email@example.com.