Want to run your recon department as a profit center for the dealership? Your goal should be to get retail-ready vehicles to the front line in three to five days at the lowest all-in cost. It’s a process to be managed — and managed well.
One component of recon efficiency that dealers ask about is how to determine staffing load. To begin, for simplicity sake, let’s assume a monthly volume of 100 units through recon. At this volume, how many techs, detailers and other personnel must be on the clock to do that work? At this point, we’re not considering time-to-market (TTM) or how fast you can get these cars frontline ready.
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Your recon asset decisions look like this:
You might not consider the used car manager position as a recon asset, but it is critical. As the table below notes, the used car manager should also be assigned a “Best Practice” clock time:
Run the Numbers
Let’s calculate your staffing load: 100 units a month X 12 months = 1,200 used vehicles reconditioned per year. Fixed operations consultant Gene White of Gene White Management, a former industrial time efficiency engineer, also allots four hours per detail and per technician:
Note, this staffing requirement assumes these 2.5 technicians are working their 40 hours at 100 percent efficiency. This shop will probably employ three individuals in each of those spots to support sick day, vacation and unusual work loads. White notes, however, that dealers tend to over-staff, which would not be necessary if they watched and managed their productivity closer.
This is why highly productive recon operations have not only done their labor/asset calculations well but also have in place accountability tools to hold assets to their Best Practice clock times (see table).
To gain honest insight into technician and detail efficiencies, pull their individual flag hours and compare them to those individuals’ clock hours. How might closer supervision of workflows and accountability per asset identify where that time and profit is getting away from you?
Unless you’re measuring each step of your recon process and holding each staff accountable for performing to their clock time, it is quite challenging to know what the current reconditioning model is costing the bottom line.
Whether you’re managing a one-rooftop recon operation or many across a group of stores, you can’t improve what you cannot measure. For a group, you want to know what each store is achieving in reconditioning TTM and costs.
You also want to know how stores are doing as a group — and how each store in the group compares to others.
Without performance reports that let you take the temperature of your operation, unidentified time costs will eat sales gross quickly:
A few final considerations:
If the goal is to retail used units within the magical 30 days, you can’t waste half of that time in recon. TTM software provides clarity and transparency into each step of this process. This tool provides clarity into the “who/what/when/where/why” into what each extra day in recon is costing per unit. When you know where productivity, dollars and time leak from your processes, you can address and fix them.
By achieving and consistently holding to improved TTM workflow, benefits typically flow out, such as: reduced holding costs, improved gross margins, increased inventory turns, fewer units wholesales, more engaged players and a more competitive dealership.
Here’s what I mean: