Fixed Ops Journal - April 2018 - F17

FIXED OPS JOURNAL

FLEET

continued from Page 16

In-house or farmed out?
A common concern among dealers is determining whether it is more cost-effective to
keep reconditioning work in-house or to outsource it. Dale Pollak, founder of vAuto, a provider of dealership management software,

line them. Younger dealership executives are
more willing to embrace technology that enhances the reconditioning process, says Doug
Grimaldi, president of Green Cloud Process, a
Jacksonville, Fla., company that provides software called ReconTRAC.
The product enables dealers and service
managers to follow a vehicle's inspection, repair orders and work flow as it goes through
reconditioning, Grimaldi says. More than 260
dealerships buy the software, he says, at a cost
of $300 to $700 a month.
ReconTRAC also includes preset prices for
parts, speeding cost estimates for reconditioning work, Grimaldi says. If a part isn't on
the price list, he adds, "our system allows the
[service] technician to electronically shoot a
price question over to the parts department."
Jeremy Miller, service director at Koch 33 Toyota
and Koch 33 Ford in
Easton, Pa., says using ReconTRAC has cut reconditioning cycle time at the
dealerships from 12 days
to four days.
As soon as a vehicle arGrimaldi: Younger rives at the dealership, Redealers embrace conTRAC alerts the service department that it has
software.
reconditioning work, Miller says. It also creates purchase orders for outside work, he adds.
His dealerships are reconditioning about
500 vehicles, Miller says. Without the software, he says, "there is no way I could keep
track of all the cars."
Other dealerships and dealership groups,
such as Birchwood, have developed their own
reconditioning software. Birchwood, which
sells as many as 600 used vehicles a month,
has an in-house team of business analysts
who study data on each reconditioned vehicle
to determine how to improve the process,
Greer says. To that end, the company also employs five software developers.
"We can fully recondition a vehicle, including photos and videos, in less than five days,
including weekends and holidays," Greer says.

"Now vendors understand
that if they don't complete
their job in a timely
manner, they are holding
up the next person in the
production line."
MIKE BOYD

says dealers need to examine carefully their
payments to outside suppliers for reconditioning jobs.
"With margins under pressure," Pollak says,
"dealers would be wise to take a closer look at
these costs and trim them where they can."
Birchwood is firmly in the do-it-yourself
camp. In 2015, the group opened a 40,000square-foot reconditioning center that includes a full body shop. The center enables
Birchwood to do all the exterior reconditioning on a car or truck, Greer says.
"We have 100 percent return on investment
when we invest in exterior reconditioning," he
adds.
For dealerships that outsource reconditioning work, several products enable dealers to
monitor vendors' productivity. Among them
is software from iReconCars in Columbus,
Ohio. Mike Boyd, the company's CEO, says his
product tracks the cost of a vendor's service,
the amount of work it does and the time it
takes to recondition vehicles. The software also allows dealers to compare vendors' performance.
The software, which has 25 dealership customers, costs $399 a month. Vendors have
their own portals in the iReconCars system,
Boyd says, and can see when their recondi-

tioning work is scheduled to begin and to be
completed.
"Now vendors understand that if they don't
complete their job in a timely manner, they
are holding up the next person in the production line," he says.
Marc Cox, general sales manager at Tansky
Sawmill Toyota in Dublin, Ohio, says the
iReconCars software has improved his reconditioning process "1,000 percent" by helping
him keep his vendors accountable.
The software shows where a car or truck is in
the reconditioning process, and which recon
workers - internal and external - are lagging, Cox says. A slowdown is expensive, he
adds, because a vehicle doesn't move to the
next vendor until the current one finishes its
work.
"We run between five and seven days" to recondition a vehicle, Cox says. "If you are on a
60-day turn [to sell the vehicle], you are already five days into that 60 days."

Recon A to Z
Other vendors handle the entire reconditioning process for dealerships. Manheim's
Retail Reconditioning Solutions service will
recondition any car or truck, whether bought
at one of the company's auctions or delivered
by a dealership to one of its recon centers.
The work includes a multipoint inspection,
repair of mechanical problems and detailing.
Dealers pay Manheim a variable rate for the
service, depending on the amount of work a
car or truck needs. Turn time for vehicles is
four to 10 days, depending on a client's needs,
Manheim says.
"The big advantage is time saving," says Angie
Babin, Manheim's vice president of reconditioning.
A growing trend in software is helping dealerships make their used vehicles stand out
through the reconditioning they get.
Dennis McGinn, CEO of Rapid Recon in Palo Alto, Calif., claims his company's software
saves the average dealership $19,000 a month
in reconditioning costs. About 1,000 dealerships use the software, at an average monthly
price of $600.
McGinn says salespeople at Atlanta Toyota
in Duluth, Ga., part of Penske Automotive
Group, use a feature of the software to identify
repairs and enhancements that would make a
used vehicle appeal to a potential buyer before it undergoes reconditioning, and then
pitch those upgrades to sales customers.
McGinn calls it "creating a story" about a car
or truck. He says, "A good salesperson can use
the heck out of it." 

APRIL 2018

PAGE 17

Table of Contents for the Digital Edition of Fixed Ops Journal - April 2018