10 Jul Reconditioning “Time-to-Market” In 5 Days – Everett Cheverolet
Real-time workflow technology, now with full mobile access, is replacing the varying and frustrating attempts to make reconditioning accountable. This technology was originally developed, and is the concept behind, “Just-in- Time” (JIT) manufacturing JIT manufacturing centers on the elimination of waste in the entire manufacturing environment, from raw materials through shipping; ultimately, eliminating the need for inventory. It holds to a philosophy not to produce on time, but to produce in time. It is also the reason cars don’t cost two or three times as much.
The good news is that JIT has finally come to the world of reconditioning and is referred to as “Time to Market” (TTM), which covers the period from auction or trade to frontline ready. In JIT manufacturing, the technology drives the cost down and the quality up by making the start-to- finish progression a continuous, transparent and measurable process. In a dealership, this TTM workflow process has the same effect, but while the time demands and variations can be even more challenging, the JIT premise remains: to streamline reconditioning into a measurable process by taking out inefficiencies and make it fully transparent.
Everett Chevrolet in Hickory, North Carolina, is a stellar example of making reconditioning control a priority. In September 2011, they installed a real-time workflow system and quickly found their actual TTM was running 11 days at the sales level of 176 used/month. To grow the business to the next level, they decided to cut the 11 days in half and added incentives for their recon staff to achieve this goal. In March this year, Everett sold 263 used and their TTM, starting at service and ending in the frontline, was under four days. By taking seven days out, it added two turns to sales, equating to 30 more cars to sell each month at a contract-free license cost of $500. You don’t even have to get your pencil out to figure out the ROI on this deal.
Being in control has put Everett in a whole different league. “We are now running with the big dogs in sales and profit,” said Dave Everett, VP and used car director. Their success was validated. In March 2013, they were named as the No. 1 certified Chevy dealer in the Southeast and the No. 3 certified in the nation.
Here are the steps that Everett went through to measure and control their recon:
- They started with the workflow process (shown above) that matched their current structure. Within a few weeks, they were clearly able to see their actual average cycle time of 11 days.
- With their controls in place, they decided they wanted their average TTM to be five days or less, and installed an incentive plan to match the expected results.
- Using the tools built into the workflow process, they monitor the daily, weekly and monthly averages to watch for any bottlenecks or problems cars. They also are continually looking at ways to drive down their TTM (shown to the right).
In summary, Everett was able to both drive their TTM down and, at the same time, dramatically grow sales. What the real- time workflow system does is un-complicate the entire process of keeping track of all cars, and all steps, by using complete transparency to ensure accountability. Why should you do this? Because it benefits everyone, has an enormous ROI, is easy to get started and is simple to use. One final point, the white board or spreadsheet you have been using is now the most expensive and inefficient option.
Dennis McGinn is the founder and CEO of Rapid Recon. He can be contacted at 866.268.3582, or by e-mail at email@example.com.