CHICAGO -

The Real Front Line: Do you know what your recon cycle time?  Inevitably, when we ask dealers this question the standard answer is: “I am pretty sure it is somewhere around 5–7 days.”  But do you measure it?  

I have a colleague who always says that you cannot manage what you cannot measure.  The vast majority of stores do not measure their recon cycle time and just have a gut feeling for how quickly cars funnel through the shop.  When we sit down with them and start to measure the real number, often times it balloons to more like 15 or 16 days rather than five to seven.

The truth is that decreasing your recon cycle time (and in turn your days to sale) by just a few days can mean hundreds of thousands of dollars in gross profit over the course of a year.  The bottom line is if your cycle time in the shop is not under five days, it is time to put a plan in place to fix it.

The first step is to begin measuring it.

CarMax for example would call this their “Days in Zone” report.  They split all their steps of reconditioning into different zones and measure the days it takes to get through each one.  This helps to identify bottlenecks and determine what needs to be corrected to speed up the process.

There are many times where the used-car department has their vehicles pushed behind customer vehicles.  Taking care of customers is very important; however, in most traditional dealer settings, the used-car department pays the same amount as the customer to recondition their vehicles.  

Every day those vehicles sit behind the building, they are costing you money.  Many successful dealerships are fighting this battle by tying their service manager’s compensation partially to the cycle time of the used-car department’s vehicles.

Editor's Note: Steve Miner is the director of product marketing at FirstLook. This entry can be found within the Drive Your Numbers blog here.

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