Improving our Inventory Processing Process

[flosho]

Ok, so we've been battling mightily with the ability to process our inventory quickly and efficiently. In June we sold more vehicles than our inventory department processed through which means our lot saw a net decrease in the number of cars on it. We've been trying to ramp up from 25-30 cars on the lot to 50-60 cars on the lot for about year. We are an independent used car dealer.

We're in the process of setting up Repair360 recon software and moving away from our vintage "pen and paper" process that has a lot of negatives with it.

I'm mostly looking for suggestions, input, encouragement on streamlining our process.

What is your experience in the general process of recon of a used car? It currently takes us 25+ days to get cars front line ready.

Our basic process:
Purchase vehicle
Transport Drop Off
Inventory Manager Pre-Inspection
Arbitration If Necessary
Technician Does Inspection
Order Parts/Repair
Send To Detail / Photo / Front Line

Some things we're looking for feedback on, is how much of the vehicle inspection should be done by the inventory manager and how much is done by the technician. Obviously the in-depth wrench turning stuff and nuts and bolts repairs are the tech's responsibilities.

The Inventory manger (manages the mechanical recon process) does a very basic look over to decide if it needs a windshield or body work, etc. with Repair 360 they provided about a 160 pt inspection checklist to integrate into their software. I went through and about 90% of that can be inspected by the Inventory Manager without any tools except a tire depth gauge. Meaning they can check the lights, bulbs, power accessories, etc. Does that seem reasonable? or should it be left to the technicians that currently check that stuff?

I'm also looking for feedback/suggestions on what to use for these inspections. IF you have an example document or a source for such. We value selling quality vehicles but our current inspection check list was based more on high quality / experienced technicians knowing what to look for. Some of our less experienced technicians (and future techs) need more structure and outline to look at stuff.

I'm also interested to see what sort of information should be gathered on say a "pre-inspection" as well as a "final quality control" inspection before it is sent to detail department (and then front line ready)

 

[Jon Singo]

It sounds like you've put a lot of great thought into having a process and sticking with it. It's similar to what we do as a very high volume independent. Where we differ is our time to lot is closer to 9 days vs your 25+.

Are you counting vehicle transportation? Are you listing cars the day you buy them without having them on the lot yet? What is taking the most amount of time in your 25 day estimate? My first goal would be to establish where the bottlenecks are and address them individually.

If quality is your #1 concern I would highly recommend having a documented standard all vehicles must meet in order to hit the specific quality standard you are trying to achieve (look at a company like Carmax to see what good looks like). Train all associates on those standards, then build your recon process to achieve those standards. Advertise to customers exactly what those standards are so you're not wasting the value you've built in your recon process.

Sounds like you've got the right idea and digging into the bottlenecks will likely reveal your opportunities.

 

[Tallcool1]

Ok, I love this thread already.

Software Applications are great in theory, but painful in reality. The only way for Recon Software to work is everyone in the process MUST participate. As soon as a vehicle rolls out of recon and the UCM says..."I told you to fix _________", the system is broken. As soon as the technician doesn't update the Software Portal, the process is broken. The biggest pain point is the techs. They are busy, and these systems actually slow them down.

We don't have a shop, but use a couple of independent shops. One of them has absolutely nailed this. Each vehicle has a clip board with a paper that shows what the concern is plus any known repair work that the vehicle needs. The office keeps a copy. The clip board goes to the shop with the vehicle. All correspondence is handled on the clip board and the office updates on their end as parts are ordered etc.. Vehicles that aren't finished are easily seen by looking at the wall of clip boards and the copies in the office. When the vehicle is done the office copy gets stapled to the tech copy and both stapled to the repair order.

I drive each vehicle. I will typically drive them almost 15 miles. I know that sounds excessive, but by the time I get back I have identified (on my clip board, in writing) every possible defect that is going to keep the vehicle from selling. Wipers are bad, RR Window doesn't work, shake at 65mpg, funny noise when decelerating from 40-30 mph, etc.. I have found everything that a customer is going to see. Now all the shop has to focus on is the stuff that is hidden like brake pad measurements, oil on the pan, etc.. My shops love this, and I do too. The shop knows that I know what we are dealing with, and they know that there isn't much use in trying to bullshit me about needed recon. Plus, it saves us money.

I have been in the car business for 35 years, and there is one thing that I never figured out...how to get the shop to do a proper test drive. They just don't want to do it. They drive them around the block and that is it. Even if we paid them an hour to test drive them......they didn't do it the right way. I finally gave up and just started doing it myself.

I know a lot of dealerships do a great job with recon software. However if the process is broken, the software makes it worse not better. I know this is not the traditional approach, but you are small like me. You might find that simple is better by tweaking your process and tracking mechanism.

 

[Jon Singo]

I have been in the car business for 35 years, and there is one thing that I never figured out...how to get the shop to do a proper test drive. They just don't want to do it. They drive them around the block and that is it. Even if we paid them an hour to test drive them......they didn't do it the right way. I finally gave up and just started doing it myself.

Preach!!

At our volume it's imperative our techs drive every vehicle for at least 30 minutes at highway speeds. It's at too many for any single person to drive. They get paid 2.5 for a UCI and generally spend 45 minutes on one. Guess how many cars get driven longer than a couple miles? Literally none.

Reason #475 I'm pushing for our recon techs to be hourly. I don't know another way to make them do it without babysitting.

 

[joe.pistell]

it's imperative our techs drive every vehicle for at least 30 minutes at highway speeds

What a great job for a retired techs or car guy. 30 mins a VIN for test drive and written report. Pays $10-15. It scales for high volume stores.

 

[Jon Singo]

What a great job for a retired techs or car guy. 30 mins a VIN for test drive and written report. Pays $10-15. It scales for high volume stores.

Maybe I'll look into early retirement

 

[Carsten]

Can't you have them record the mileage after they do the test drive? Or set up a course that it GPS tracked.
Also, seems like the manager ain't caring either if they do or don't.
Thus, it's a management issue since they aren't following up on requirements.
I would also worry if there are other areas that they are not properly following through on.

 

[Ryan Everson]

I bet if they were luxury or sports cars they'd find the time for the full 30 min test drive...

 

[joe.pistell]

Thus, it's a management issue since they aren't following up on requirements.
I would also worry if there are other areas that they are not properly following through on.

Carsten, your intense technical knowledge produces a value to the car industry. Your value would go up 100x if you adopted a car dealer and sat in the store(s). You'd watch and document the 100's of variables that happen hourly on the sales floor.

 

[Tallcool1]

Can't you have them record the mileage after they do the test drive? Or set up a course that it GPS tracked.
Also, seems like the manager ain't caring either if they do or don't.
Thus, it's a management issue since they aren't following up on requirements.
I would also worry if there are other areas that they are not properly following through on.

Carsten, you are not wrong with this comment. However, there are a lot of moving parts and variables in play within a car dealership. @Jon Singo and @joe.pistell are touching on them.

Technicians are paid commission. In regard to a vehicle that is in Inventory (not customer pay), their job is to drive them and write down absolutely everything that they notice the vehicle needs. Within that list of items is where the technicians commission lives.

On the other side is a Used Vehicle department manager that looks at that list on each car and immediately starts crossing things off of that list. He is crossing them off because it is his job to maximize profit in his department so he limits his reconditioning (typically) to items that he believes will keep the used car from selling. So after this happens about 40 times, the technician realizes that the inspection is being done for no reason. So the technician just stops driving them.

So what we have is 2 people within the dealership that are actually not "sitting on the same side of the table". but we expect our vehicles to be reconditioned. The system is broken.

How do we fix it? We have someone test drive the vehicle from a Consumer Perspective, not a mechanics perspective. They find the things that they know need attention. Now when the vehicle goes to the technician, it includes a list of a few items that the technician knows need repaired. The technician is more likely to actually LOOK for issues that are hidden. In addition, the test drive is less important.

Technicians are the hardest people to hire. I am not saying to let technicians hold us hostage. What I am saying is don't throw one out because the system is broken.