Fixed Ops Magazine 2023 Vol 20-3 - 26

OBSTACLES TO IMPROVEMENT
Two formidable obstacles to such improvement make
me cringe each time I hear them spoken:
1. That's how we've always done it.
2. We've been using them (a vendor) forever.
Consider an outside vendor handling detail work and
their performance is consistently over your two-day
time-to-line mark. Any time over that mark is an added
cost to you.
A slow vendor can be justified by claiming that they are
less expensive than some other competitors to tolerate
a slow turn. That thinking gets a lot of dealers in trouble.
Here's how:
* Each car you own going through recon carries a
holding cost. The accepted daily per-car cost is $45.
A two-day turn plan allows a total holding cost of
$90. The
creates a total two-day turn cost of $190. That's the
budget.
* However, if the vendor is slow and takes three days
instead of two days to complete the job, an extra
$45 in holding costs are incurred for that car. Your
new total cost is now $235. This example is no longer
on budget. It is losing $45.
Look at this math across the number of cars being
handled by that particular vendor.
Slow turnaround times can mount
up costing both time and money.
Slow processes like this erode margin
opportunities on vehicles when
they sell.
Money is wasted when the recon
strategy is not coordinated with recon
planning and expectations. Net
cost is some of the hardest money
to make up. Given that, it is crucial to
have your reconditioning game plan
dialed in.
cost of the vendor is $100 per car. This
MANAGEMENT RESPONSIBILITY
Breaking down
department silos
allows you to take
better care of your
Who's responsible for managing this dial-in discipline?
In most stores, it's the General Manager.
The GM has the most demanding
role, as he or she helps everyone
come together. If you recall the 2000
sports drama, Remember the Titans,
you'll understand my point about
time-to-line discipline. This coach's
challenge was bringing two teams,
the offense and defense, together
to work as one. Dealers, too, have
two teams in the locker room to be
coached: Sales and Parts/Services.
customers and benefits
your bottom-line.
26
One final example, which regular
readers of my columns for Fixed Ops
Fixed Ops Magazine 2023 Vol 20-3

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