COMMENTARY: Physical auto auctions change for better

The Hub at Manheim Atlanta. Photo by Joe Overby
CARY, N.C.  - 

The first thing you might have noticed at Manheim Atlanta earlier this year was a countdown and buttons worn by employees that notified sale attendees that “a change is coming.”

That change they were specifically referring to was Manheim’s investment in a widespread technology update and redesign of some of its auction processes, a change the company called its largest ever.

But that “change” could also describe the broader approach by the auto auction industry as a whole to become more efficient and technologically swifter at its brick-and-mortar locations.

That’s evident everywhere from Atlanta to Chicago, North Carolina to Arizona and all points in between, as changing ways of buying and selling wholesale vehicles are met by an evolving industry striving to adapt.

That includes a Manheim mobile auction in Wilmington, N.C., transitioning to a permanent, two-lane location and a new Bel Air Auto Auction site that Ray Nichols, chief executive of parent company BSC America, says “will be able to accommodate continued growth in the marketplace and allow us to serve better our customers’ needs with ease and efficiency in a state of the art auction facility.”

East and west, corporate and independent — change is here in the auction business.

More efficient, leaner ops at Manheim

As of late September, more than half of Manheim’s auctions (including Manheim Atlanta) had been upgraded with the aforementioned enhancements, which include, for instance, centralized technology that would allow the administrative office at this Atlanta-area auction to complete title work for the Orlando location.

What you might notice is missing from Manheim Atlanta on sale days, by the way, are the long lines, says assistant general manager Chris Hill. 

When you walk in the door at the auction, to the front left is a bank of computers known as a “Hub.”

A “hotbed” on sale day, Hill said these computer stations allow dealers to complete tasks they would have otherwise had to stand in line at the front desk to complete.

Things like making payments, printing gate passes or ordering ancillary services post-sale inspection — dealers can take care of these tasks on their own at the bank of computers.

“They can immediately come in here, and do what they need to do and get out of here,” Hill said in a late-September interview at the College Park, Ga., auction.

With the auction being what’s known as an “enhanced location,” the line at the administrative desk is reduced, because so many more clients are doing some of the admin type tasks on their own.

“They never had this conduit into our system by which to get information out. They always depended on us via phone call, via standing in an arduous line,” Hill said. “We don’t want you to leave here, but we know you’ve got a business to run or a family to see or both.”

Another piece of efficiency you might notice at Manheim Atlanta is what’s known as Lean Daily Management. It’s a concept founded by Toyota as a manufacturing improvement, but adopted by other business sectors, including the likes of the New England Patriots.

And starting last year, Manheim began rolling it out to its locations.

“As we were looking at new technologies for driving efficiencies for our clients throughout the auction locations, we also, at the same time, realized it’s not just the technology,” said Grace Huang, president of Cox Automotive Inventory Solutions, in an interview at Manheim Atlanta.

“Technology in and of itself is great, but you have to have the processes and the foundational pieces to underpin it, to really maximize technology and technology investments to really bring it to life for our clients.”

Manheim had a team look into how the LDM concept could be incorporated into auctions, “and we followed the same tenets about measurement and metrics, and looking at each of the processes, working together collaboratively across departments to identify potential road blocks,” Huang said.

In a conference room at the auction, there is a whiteboard — known as a “measurement board” — that shows each individual department displayed horizontally, with various metrics (including safety, quality, delivery, cost and engagement) displayed vertically.

Each square has a score, highlighted in green for metric goals that were reached and red for those that were not reached.

Each department has a 10-minute standup meeting for to discuss their own metric and the auction as a whole has a “set the standards meeting” where all departments meet to discuss roadblocks and pitch project that can solve the “rocks” that might be hindering the system.

“It has brought all the departments together in a much more collaborative fashion,” Huang said.

And it has fostered an approach to thinking of the auction as one system, rather than silos.

Opening day in Chicago: ADESA builds on safety & tech  

In March, I had the chance to check out the new digs of ADESA Chicago during its grand opening event

On the left side of the arena (from the entrance) were doors to the outside that can be opened and closed as necessary.

Exhaust fans were there to keep the air fresh even if the doors were shut. These doors fed into the auction lanes.

At the opposite end were gateways to a space that were still under the roof of the facility, but fed out to the back of the facility.

From entry-to-exit, the vehicle essentially would travel in a backward J route. This is designed to avoid the “wind-tunnel effect,” said Kurt Madvig, ADESA’s vice president of auction operations, during the on-site interview in March.

In the lanes themselves, near the blocks were digital displays with lights, announcements and other bits of information. The point, Madvig said, was to make sure that the dealer in the lane — whether he or she is tech-savvy or not — has the same easy access to information to the person bidding online, simply by looking at the screens.

“It helps transition from the old paper days to digital,” Madvig said.

Yellow pylons line the lanes, designed for safety. These steel tubes were filled with concrete, with plastic outer covers and went four feet into the ground, Madvig said.

Should a car go off course, this helps to keep it contained within the lane.

Another unique part of the facilities: the cafeteria and Internet center were smack dab in the middle of the arena, allowing the dealer to “feel like this is the only place they need to be” during the sale, Madvig said.

The bright teal floors consisted of an epoxy surface with grit, which were designed to make them anti-slip with all the weather Chicagoland can get, be it rain, snow or ice.

Speaking of weather, the exterior is prepared for weather: besides the area out front, the entire facility utilizes rolled concrete instead of asphalt.

ADESA Chicago employees were equipped with mobile printers, vehicle stickers with bar codes and folks using mobile phone apps to conduct business.  All of this with the intention of making the customer’s day quicker and more efficient at the auction.

The future?

So what does the design of an auction look like years from now? Perhaps Bob Wolfsen’s Auto Auction In The Round concept — which has earned a patent from the United States government — gives us a hint. 

Walk into most auto auctions today and the arena where the sales happen has a familiar appearance: rectangular with long lanes that extend from one side to the other.

Wolfsen’s design shakes that up, making the arena — as the name would imply — round.

Each selling arena in Wolfsen’s design is a circular pod that includes anywhere from eight to 12 lanes, he said in an interview with Auto Remarketing earlier this year.

The vehicles enter and exit behind each auction block. They come into the pod and go around to the front of the block, going 180 degrees before exiting out behind the block.

To get to the pods, attendees can walk from the office down a “tube” hallway and then select one of the pods to enter, he explained.

The patent was approved on March 23, Auto Auction In The Round is now operational, and the official patent number is 9,691,100. 

Wolfsen, whose company is based Chandler, Ariz., is the transportation manager at Metro Auto Auction in Phoenix.  

Asked what prompted the idea, he said: “It started when I helped put another auction together here in Phoenix — Dealers (Auto Auction of the Southwest),” he said.

Wolfsen and the team there shaped the auction blocks into a V-shape, he said, “so that the dealers could see all the cars at all the blocks from any position.

“I wish I could take credit for that but I can’t,” he said. “But it started me thinking about, ‘How do I close the V to make a circular pattern?’”

But closing the V would result in bunched-up traffic, he said: “It would be six lanes feeding into a three-lane area. So that’s when I started thinking about the circle, and coming in from the outside of the circle, around the front of the blocks, and then back out behind the block.

“And I actually laid it out over there — this was, gosh, almost 14 years ago now — in paper and drawing it out on the floor. It was an empty building. It made sense. So that started the thought process”

The design was based on what dealers had told him over the years.

“And it boils down to, ‘I missed some opportunities. I wish I had the ability to be in that other lane at a point because I really needed that car,’” Wolfsen said. “I hear this more and more. I hear it every week here. On the seller’s side, (they’re) never happy with the lanes. ‘Oh it’s too far away from the door. It’s too close to the end of the building.’

“There’s always a reason. And the third item is that, ‘I’m not happy with my numbers. I want to run in prime time and I want to run in the meat of the sale, and I want to run in 30 to 60,’ or whatever that might be,” he continued. “This addresses all those issues, where the buyer will be in a position where he can bid on any car that comes through the building.

“That’s unheard of in this industry. Where the seller can (choose to) not be concerned about lane preference, because it doesn’t matter anymore. Every car has the same exposure, availability.”

Just one of many ways auction folks are thinking differently. 

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