OpenRoad Auto Group is the largest-volume automotive retail group in British Columbia, Canada. Since 2000, it has grown into 21 brands and 34 stores, including dealerships in Seattle and Bellevue, Washington.
Sulmas Mosleh is the regional dealer administrator for the group’s Mazda, Toyota and Lexus brands in Port Moody and a second Toyota store in Abbotsford, British Columbia. Andrew Sciampacone is the central reconditioning manager.
The team has spent the last year putting solutions in place for getting used cars frontline ready faster. Among the reasons, Mosleh said, was the ability to control how fast and efficiently the reconditioning department processed cars for resale, which directly affects per-car, per-day holding costs that erode sale margin. Transparent recon workflow also improves communication with the sales department to help it proactively meet consumer demand.
The reconditioning term “time to line” is a measurement in hours of how quickly a dealer gets its cars from acquisition to frontline ready. The best practice time is three to five days. Using Rapid Recon dealership reconditioning and communications software, the Port Moody Lexus store improved its time-to-line performance from 19 to 11 days. Mazda reduced 27 days to 16, and Toyota from 18 to eight days.
When the time to line gets faster, cars sell sooner, customer demand is met and holding cost erosion is minimized. Holding cost management is often ignored or misunderstood, but its margin abuse can be considerable.
The average improvement for the three dealerships is 62%. “We’re making progress toward our goal of five days average at each dealership, but it’s continuous work,” Sciampacone said.
“That streamlining work was Sulmas’ doing,” Sciampacone said. “She talked to the GMs, the regional vice president and our stores’ fixed ops director to map out these processes and steps — and assigned a step manager — to accomplish our goal.”
Mosleh also ensures store and group managers have the most accurate and current performance data at their fingertips. “Now stores can compare apples to apples when looking at our region. Having standardized performance data and reports for each store and the group is the most important outcome. Rapid Recon is making that possible,” she added.
Creating Speed and Dollars
The saying goes, you can’t improve what you can’t measure (or track). What reconditioning must measure, and track, is the time from vehicle acquisition to its release as sale-ready. Among essential time metrics to enhance are:
• Trade/transport to recon/DMS login time
• Pre-inspection and mechanical inspection times
• Parts-delivered-to-technician time
• Technician-per-vehicle time
• Handoff-to-detailing time
• Vendor-or-sublet-completion time and total time-to-line time
• Time to vehicle location on the lot
• Recon / holding cost / vendor dollars per vehicle dollars.
“We originally didn’t have a reconditioning system like Rapid Recon here,” Sciampacone said. “Every dealership in our region did something different to manage their recon processes. At that time, I was a technician for our Mazda store, where we used a Google-like tracking sheet. That was no way to track anything.”
The Port Moody reconditioning center is underneath the Lexus dealership, which shares a parking lot with the Toyota store, and the Mazda store drops its cars off there. The center features six bays plus space for vehicle storage. The monthly recon volume is between 100 and 120 vehicles.
Sciampacone explained the process, “We want to get vehicles in and out as fast as possible, so every car is immediately inspected. And as the recon workflow moves forward, the communications channels built into this software enable the sales department to see the vehicles in this pipeline and when they will be sale-ready.
He credited Mosleh with having crafted the recon step structure that expedites the vehicles.
“The step structure gives us apples-to-apples data for store-to-store and across-the-region comparisons,” Mosleh said. “Developing and using this performance reporting consistency was most important for us.”
“It’s not unusual for dealers still operating reconditioning with paper and spreadsheet tools to lack the data and reporting tools to measure reconditioning accurately and in a meaningful way,” Sciampacone said.
“Before we modernized recon with this software, I had no idea how long we were taking to get cars sale-ready,” he added. “We started improving our results after switching our process to Rapid Recon.”
“Having standardized performance data and reports for each store and the group is the most important outcome. Rapid Recon is making that possible.”
— Sulmas Mosleh
Zeroing in on Efficiency
Holding cost is a per vehicle, per day depreciation cost (floorplan, market depreciation, opportunity cost not to be sale-ready). This cost begins at acquisition and ends when a car is retailed or wholesaled. For import dealerships like OpenRoad, holding costs can be $80 or more per car per day. A vehicle taking 15 days instead of seven to get through recon costs the dealership $1,200 instead of $560.
Sciampacone and Mosleh hope the results from a recent Rapid Recon investigation into the stores’ time-to-line performance will improve their speed to sale.
Dustin Jones, a performance manager with the company’s Recon Edge consulting team, visits the Port Moody stores occasionally to work with Sciampacone and Mosleh to help identify workflow opportunities to further eliminate delays and costs in the processes.
Jones’s investigation identified delays in sublet detailing/cosmetics. These services took an average of five to six days to complete their assigned work. “When we studied that data from Rapid, that was shocking to see,” Mosleh said. “When our GMs saw these numbers, they mobilized. They told us, ‘Detail shouldn’t be taking more than four days — you need to bring in more guys or do something.’ That was an eye-opener — detail alone consuming more than half of our seven-day time-to-line goal?”
Sciampacone said a solution presented by Jones was to activate Rapid Recon’s complimentary vendor management tool, Vendor Advantage.
Vendor Advantage connects dealers with all their vendors through a vendor-specific portal into the dealer’s Rapid Recon workflow system. Vendors see and manage only the assignments and vehicles assigned to them. The tool delivers vendor and dealer accountability for obtaining estimate approvals, as well as automated updates to both systems to eliminate guesswork and downtime. It clarifies and expedites communications and improves progress tracking and provides time and date stamp accountability.
Rapid Recon trained the stores’ vendors and helped them streamline their processes to work better within the dealerships’ time goals. “Now vendors see ahead of time their assignments so they can have resources ready,” Sciampacone said.
Another time saver and trust builder these dealerships use is Rapid Recon’s Media Tagging feature. It enables technicians to capture and share repair images in their approval communications. A picture is worth a thousand words and eliminates subjectivity, so a photo or video attached to a verbal request for an oil pan leak, for instance, can be a compelling reality. “You eliminate much of the fight between recon and sales for approvals with this feature,” Jones said.
“Rapid Recon is a powerful program. I wouldn’t want to manage recon if we didn’t have this solution for getting our vehicles sale-ready faster,” Sciampacone said. “It would be just too frustrating.”
