In the beginning, as the story goes, “recon” was about accountability, starting with mechanical repairs. The problem that needed solving was that accountability was non-existent. The first challenge was to convert finger-pointing to placing control — with built-in verification — in the hands of those doing the work.

Verification itself virtually eliminated the need for a “trust but verify” effort of those directly responsible for reconditioning. At the same time, it notified everyone else in the dealership who needed to know precisely how long it was taking to do their parts. 

This approach established the metrics of ADR and T2L — Average Days in Recon and Time to Line — so that everyone involved in the reconditioning process had a shared key performance indicator (KPI). These benchmark metrics must be visible to everyone involved and reported to their managers, supporting accountability broken down by individual contribution or lack thereof. 

Now, a decade later, we have built an extremely significant new segment in this industry. We’ve summarized this under the three letters T2L. Our success has attracted attention from at least 10 other companies attempting to improve on or replace T2L as the well-understood and practiced metric for improving reconditioning and, by doing that, improving used car efficiencies and profitability.    

General managers (GMs), chief financial officers (CFOs) and CEOs have a strong bias toward making top-down decisions but top-down directives made for expected expense savings frequently overlooks the negative impact such a decision forces on those who rely on software tools to do jobs most efficiently.

Now, about the iceberg and hidden costs. There is no direct time-to-line accountability when top-down-driven decisions take place. While these people have the power, they are not also users, so they decide without knowing if it is the best bottom-line alternative for those who need to be accountable. They may feel they are making a cost-saving decision, but miss the point, which is keeping T2L in check.

One recent example I’ll share here is a well-known Florida-based dealer group. The CFO had received a presentation from one of the big three dealer management system (DMS) companies, which claimed its package also included a “better recon solution.” The CFO, considering the proposal, mandated the group move forward with his decision. However, one very experienced, hands-on GM over several of the group’s stores remarked, “Not so fast.” He then ran a side-by-side test in his stores, comparing “new and improved” with the stores’ platform to recondition cars. One month later, his stores’ recon users found that what was almost mandated “did not work,” and switching systems did not happen.

This is not an isolated example. Executives are constantly faced with hearing about the latest and greatest and get excited about claims; they are usually juggling many complex decisions at the same time and in reality they are seldom qualified to make informed decisions for techs, vendors, sales and fixed operations managers. Sometimes, those decisions work out for everyone, but we see many examples every month where the results do not live up and do not deliver a vendor’s projected results.

If you are deliberating a change that claims to be newer, better, cheaper, seamlessly compatible with other widely used applications, includes outside access to internal recon info or even ROs, the benefits may sound too good to be true, so do what this GM did and make sure those who are accountable for T2L will benefit. 

Next month: Software is Software, Right?