Time to line (T2L) is a must-have metric for every dealership, one a best-practices store cannot afford to do without or work from a guesstimate. Reconditioning presents too many moving parts from acquisition to sale-ready to assume a best efforts accountability is efficient.
T2L encompasses the time it takes your shop to get inventory from the auction, private purchase or release from trade through inspection, mechanical and cosmetic services, through photography and to the front line or posted online.
Dealers able to reduce T2L to three to five days are happier. Why? Some reasons are apparent — fresh inventory ready to sell faster, but the list of reasons to reduce T2L is long (and essential — ask your principal if this is not so):
• Reduced holding costs ($40/day per car)
• Increased turn
• Improved gross
• Reduced interdepartmental friction
• Eliminated misplacement of cars on lots or sublets
• A more profitable used car operation
But wait, there’s more. Dealers enjoying faster T2L also see incremental revenue throughout the dealership:
• Increased parts and labor sales
• Increased opportunity to sell F&I products
• Increased customer satisfaction when you present detailed, professional evidence of the reconditioning investment you put into the vehicle a customer is considering
So, how happy are you with your T2L?
Unless you measure your T2L accurately, there is no verifiable way you’ll know what it is. We know, from having improved T2L results for more than 1,000 dealerships and groups. Guesstimates and T2L checks with staff about recon timeliness based on unmeasurable T2L practices most always yield uninformed and consequently wrong T2L estimates. These estimates range from 10 days at the best to two weeks or more at the worst. Your store will probably fall somewhere between.
Reducing T2L even 2.5 days will yield an additional inventory turn — happier now?
We also know that despite the best intentions, without T2L workflow software tools, any T2L improvement is seldom more than short term. Why? Events not measured or when those involved are not held accountable for accomplishing specific tasks and functions most always, after a spurt of growth, fall back into old habits.
As one dealer told me recently, an essential key to his group’s consistent T2L improvement per store is the weekly meetings held for the group and each individual store to review T2L reports. He involves the GM, service and parts managers, sales managers, recon manager, parts manager and lot attendants in the meeting to ensure better understanding and communications — and to review goals and responsibilities.
Sound like too much? Not if those 52 hours of meetings a year can cause a performance improvement of tens of thousands of dollars a year gain in used car profitability. Putting T2L disciplines in place should not be a question of affordability either. T2L workflow software should cost your dealership per month about the price of a new set of “better” grade tires.
“Depending on the store, one more turn can be worth to that dealer $1 million,” said an OEM who advocates T2L software use in its dealers’ stores. “Isn’t that worth an analysis to see how improving time to line can benefit a store?”
“When you get T2L under control so store managers can monitor and manage their recon processes, they truly do get cars to the front line faster, sales go up, the number of aged units goes down and wholesale losses are checked,” said a group used car director. This group’s T2L average is under five days, from the moment cars are entered into the DMS or released from finance until they’re on the lot and online ready for resale.
How happy are you with your time to line?
Data from more than 1,000 dealerships using rapid reconditioning workflow solutions tells us how dealerships provide their:
• Dealer principal with measurable and significant return on inventory capital
• General manager with time to line accountability
• Used car manager with control of recon costs and urgency
• Fixed ops manager with a communications tool to eliminate friction between processes and the used car manager
• Parts department with greater parts efficiencies
• Technicians with a device to better manage their own accountability
Oakes Auto, the Kansas City area’s largest independent dealer, retails 180 to 220 units a month. Its sweet spot is three-to-five-year-old models retailing from $15,000 to $25,000.
“Because dealers don’t actually write a check out of the business account for holding costs, they don’t see what recon delays can cost them,” Dan Oakes, owner/operator of Oakes Auto, said. “Old-school dealers focus on overall front-end grosses. If they instead were to concentrate on improving recon and inventory management, front-end gross would be better, and inventory would turn faster.
“Managing reconditioning is the main focus here because a car is not for sale until it’s shown online or on the lot. All hands on deck need to realize this, and always be asking one another, ‘Why are we waiting for parts…can we get them now, so recon doesn’t stop?’ The holding cost clock starts once I own the unit. We are very mindful of its ticking,” Oakes said.
Speedy reconditioning practices have helped him achieve and maintain a four- to five-day recon time to line, which for Oakes’ operation starts when cars unload from transport.
How happy are you with your time to line? Unless you measure your T2L accurately using T2L workflow software to ensure measurement fidelity, there is no other verifiable and actionable way you will know what it is.
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