Better reconditioning through software

All used cars and trucks that a dealership acquires need some sort of reconditioning before they are ready for sale. Mechanical matters, dents and dings, detailing -- these must be addressed.

Each used vehicle in its inventory costs the typical dealership $32 per business day, consulting firm NCM Associates calculates. An industry rule of thumb advises dealerships to spend no more than three to five days on average on reconditioning a vehicle.

A faster, more efficient reconditioning process can generate big savings. A variety of workflow-management software systems promise to help dealerships cut reconditioning time and costs. Many of these products include "recon" in their names: Rapid Recon, ReconTRAC and Simple Recon, among others.

These systems track vehicles throughout the reconditioning process, breaking it down into its component tasks, analyzing each step for ways to work more quickly and efficiently and making sure everyone in the chain knows the status of each vehicle. Dealerships can customize the software to fit their needs and circumstances.

"It's always been about knowing where your money is," says Smit Shah, CEO of Simple Recon, which works with 75 dealerships and generally charges them $399 a month.

Nearly 600 dealerships use Rapid Recon, the most popular reconditioning software. Anthony Greenhalgh, the company's pro-cess performance manager, says he recommends "that dealers structure their software setup around their current process and then run with the system for about four to six weeks" to identify problems.

Freedom Honda in Colorado Springs, Colo., began using Rapid Recon in 2015 at a cost of $499 a month. The dealership formerly kept only vague track of its reconditioning time, General Manager Bret Petersen concedes.

Petersen says he discovered that his staff typically took 11 to 14 days to prepare a used vehicle for sale. The software helped point to major bottlenecks in detailing operations.

By changing the sequence of those operations and varying the flow of vehicles through the detailing department, Petersen says, the dealership has cut its reconditioning turnaround time to four days.

Freedom Honda usually sells about 75 used vehicles a month, but that jumped to 118 vehicles last August after a hailstorm destroyed 20,000 cars and trucks in the Colorado Springs area the preceding month.

"Without Rapid Recon, there is no way I could have reconditioned that many cars and delivered them that fast," Petersen says. "We didn't miss a beat."

JM Lexus in Margate, Fla., typically pro-cesses and sells 200 to 300 used vehicles a month. In December, when the dealership runs heavy holiday promotions, that total doubles or even triples, says Fixed Operations Director Brad Schafer. 

JM Lexus uses ReconTRAC, which lets managers know when a vehicle leaves the dealership for special repair work. (Other major systems also have this feature.) That's important, Schafer says, because vehicles taken off-site can go missing if a key employee leaves or paperwork is misplaced. 

More generally, Schafer adds, "As long as you put the car in the system, and it's being tracked, you can go in and see what's not moving. ReconTRAC helps us stay sane." 

The reconditioning software also can review the work of vendors, such as glass repairers, to help dealership managers stay on top of how long these processes take and how much they cost.

Tommy Gibbs, a used-vehicle management consultant of Tommy Gibbs & Associates, says he sees value in reconditioning software programs. But he also recommends that dealerships, especially high-volume ones, designate a "chaser" -- a point person who monitors the entire reconditioning chain, whether on paper or digitally.

"That person is employed by the used-car department," Gibbs says. "They're not a service person, but they have great service knowledge. They know the issues that go on in the back and can stay with the process."

For Gibbs, a chaser can fulfill some of the software's functions by analyzing approvals of reconditioning work and vehicle handoffs from one department to another.

Rapid Recon's Greenhalgh, a former dealership parts and collision manager, agrees that having a chaser is a best practice. A chaser not only polices the reconditioning process, he says, but can quickly assess whether a department is backed up and reroute jobs to available workers.

Rapid Recon and ReconTRAC executives recommend that dealerships hold regular meetings of their reconditioning employees.

"They pull up the numbers from last week and say, how did we do?" says Rapid Recon CEO Dennis McGinn. "Then they look at what's coming in this week and say, OK, are we covered? They're looking at what they should be improving."

Dealers and vendors agree that effective reconditioning software requires simplicity of design and discipline in its use.

"Software can be overwhelming to people," Gibbs says. "The challenge is to make sure that the software is easy to use."

Simple Recon's Shah concurs. "Users don't like clicking through lots of links, so we put everything on one central screen," he says. "The interactive dashboard is your control center, with all the cars and information you need to worry about."

If reconditioning software is to work, its suppliers say, managers must enforce its use until it becomes part of a dealership's culture.

"If your parts guy says he isn't going to do this, you have to tell him he's got to," says Doug Grimaldi, president of Green Cloud Process, which makes ReconTRAC. Otherwise, he says, "You lose your efficiencies."