Convert Dealership Waste into Cash

Dealers often think of waste being limited to trash such as the old equipment that customers drop off to be repaired and never pick up, a trade in that never gets fixed, wood crates for shipping wholegoods, old catalogs and other treasures collected over the years. While all trash in a dealership can be considered waste, not all waste in a dealership is trash.

In your dealership, waste can take on several forms: time spent in service waiting for the parts department to fill a pick ticket or order, waiting for customers to get back to pick up work that has been completed, come-backs in service and wrong addresses for the pick-up and delivery, and even the time it takes for a manager to answer a question from one of their people. 

Change your thinking

As I work with dealerships to improve profitability I try to help the owners and managers focus on reducing their wasted time, wasted steps and wasted resources¾especially their people. Change the way they look at your dealership by shifting the focus from doing business to building a business.

What if you made the decision to come to your store tomorrow with a focus on building a better business? How would that change the way you went through your day? What if all of your employees came in tomorrow with the same focus? By making a simple change in how you think, you can change the complete dynamics of your dealership and build a strong, competitive, profitable business. 

Observe existing processes

To begin eliminating waste you have to start creating processes for all aspects of your business. Let’s take a look at a specific example of how you can do this in your dealership, using something as simple as the process of checking in a piece of equipment to be serviced. Starting from the moment a customer walks into your dealership, what are the steps you take to get the equipment from the customer to the point it is ready to be brought into the service process?

Mentally walk through the process for your dealership and write down the steps and employees involved in the process. Keep thinking through the process until the equipment is staged to be serviced. How many steps are there in your process? Did you leave out any steps? 

Once you have walked through the process in your mind and jotted it down on paper, take a moment and watch it actually occur in your dealership as your employees check in equipment from a customer. Does the process work the same way that you outlined it? Did any differences affect the result of getting the equipment serviced for the customer in either a positive or a negative way? Take the time to adjust your written process and then share your findings with your employees.

Look for ways to improve processes

You have now created a standard operating procedure for that process and will have uncovered some problems that exist in the current process. At this point, your goal is to focus your employees on improving the process by breaking down each of the steps and consider options on how they could be improved and waste eliminated.

In most cases, the best person to document and improve processes is the person you are paying to do the work right now. Who is better than your delivery people to document your delivery process and work to improve it?

Get your employees involved in eliminating the waste from your dealership this year. Work with them to document the processes that take place in each aspect of your dealership, and send them on the path of finding ways to improve them. If each employee found a way to remove just 10% of the waste out of a process, think of the impact it would make on your bottom line.

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