Does vehicle reconditioning justify a general manager’s attention?
Is what you don’t know going to hurt you?
Your customer-pay and parts businesses get a lot of scrutiny, as they should. Still, they are predictable businesses with volume and revenue varying slightly from month to month. Not so your reconditioning business. Its workload and contribution to revenue production vary significantly from week to week.
A GM who expects healthy used car volume and profitability often tracks recon speed and efficiency. At play is how fast the recon department takes to move vehicles from acquisition to sale-ready. Managing recon strategically leverages time to line as a productivity goal. By working this metric, recon converts time to line to ROI.
An executive for a large dealer group told me its stores were recently moving to a no-stock policy for replacing sold cars. I wrote a book titled “Inventory is a Waste,” so I understand this dealer’s thinking. However, that idea restricts flexibility to meet market demand or change. A more flexible alternative would be to dial in time to line. Hence, cars get to the lot within three to five days of acquisition, and because they are so fresh, they move within 30 days at maximum margin.
Strategic time to line, as a “connect to what you expect” strategy, will give you and your staff speed-to-sale efficiency; precise vehicle tracking and location; insight into unapplied time losses, faster repair order approvals (as well as ideas to increase technician efficiency and profitability); and control of vendor assignments, time efficiency, costs and billings.
Faster repair approvals and job-ready parts deliveries keep techs busier, turning more cars and generating more hours for the shop and themselves. Strategic time to line flows efficiency and improvement throughout the store so cars get sale-ready in three to five days of acquisition. That’s responsiveness to meet any demand.
Dealers who practice strategic time to line also bring order out of chaos, tackle recon costs, and eliminate lost time and unapplied hours.
With competitive advantage at stake, reconditioning as the driver of opportunity throughout the dealership is anything but boring. It deserves the GM’s attention.
