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$7,500 expense you can cut today
As featured in Fixed Ops Magazine:
Fixed-Operations director explains how he saved $7500 per day in lost productivity cost.
Intro:
As a former Fixed Operations Director, I've seen the impact of inefficiency in automotive dealership operations firsthand. Looking back, it often felt like I was writing a check for $7,500 every single day, a cost paid in lost time and missed opportunities. It wouldn’t be uncommon on any given day to be stopped, called, or on a hunt to locate a vehicle or key so that a technician could move on with their day, an advisor could give an update to a customer, or a salesperson could locate a vehicle that they were trying to demo or sell. Sure, we had a key machine, but it was only good for letting you know who checked the key out last and provided zero information on the location if the key was not in the key machine. Picture this: a technician finds a key, walks outside, and holds the key above his head while hitting the alarm or lock button to locate the vehicle, so he knows what direction to walk in, only to find that the battery in the key fob is dead or the vehicle is parked all the way on the other side of the building. That’s terrible efficiency, right? This realization pushed me to rethink how dealerships managed location data for service, new, and used vehicles & keys.
The cost of inefficiency
In my experience, a significant portion of a dealership's day is consumed by employees searching for answers, vehicles, or keys. Let's break this down: if you have 50 employees and they spend an average of one hour per day on such tasks at a labor rate of $150 per hour, the cost amounts to $7,500 daily. This staggering figure reflects the silent yet profound losses stemming from operational inefficiencies. This is a key data point that is often overlooked because the data, until now, hasn’t been measurable. But what if we could measure this unseen data and collect valuable insights that help increase efficiency while optimizing our operations?
Harnessing Location Data:
When I started thinking about how to address this problem, it was clear that it had to be done without changing processes. We all know how resistant dealership employees can be to a change in process, so the solution had to fit right in with their current process and be relatively inexpensive. So we invented the SmartTag. Basically, a reusable hangtag and key tag with a sensor attached that tracks the vehicle and key as they move through the process. By geofencing the dealership lot, we could create zones and track the vehicles and keys with precise location data, offering valuable insights operationally and providing employees with exact locations of vehicles and keys. When combining the movements of vehicles and keys with automated updates to dealership staff, it was like zapier but for car dealerships. The integration of location data into dealership operations is a game-changer. Implementing a system that tracked the real-time location of every vehicle and set of keys meant we could drastically cut down the time wasted in searching. This technology doesn’t just help find vehicles faster; it liberates dealership staff to focus on what matters most – enhancing customer service and boosting sales.
Revolutionizing Service and Sales:
In the service department, the benefits of real-time tracking are immediately evident. Service advisors can quickly locate vehicles, thereby reducing customer wait times, and time spent in the shop and improving overall service efficiency. For sales, especially in the realm of new and used cars, this technology expedited the entire sales process. It plays a crucial role in increasing the speed and efficiency of used car reconditioning, directly impacting sales potential and profits. How long are cars waiting in detail? How long are vehicles in my UCI bays? How long are they taking in each step of the process? Now I have answers not altered by manual clicks because we are collecting vehicles and key movements and auditing their journey through the service and sales lifecycle.
A Continuous Journey of Improvement:
Beyond the immediate benefits, the insights gained from tracking data are invaluable. We could identify patterns and areas needing improvement, which allowed us to continually refine our processes. This ongoing evolution was critical in maintaining a competitive edge in the rapidly changing automotive industry. A couple of my favorite metrics are Repair order creation time to service bay entry, Vehicle bay time to hours turned, and days to frontline for used cars.
