Carvana & CarMax’s ramped-up reconditioning operations make efficient & lean recon operations an imperative for dealers

Nearly every dealer in the country is feeling the pinch on new and used vehicle inventories, with sellable inventory levels down as much as 70% for some dealers. To offset the inventory supply crunch, both Carvana and CarMax have ramped up their reconditioning operations over the past few months – to get vehicles Retail-Ready Faster and to speed inventory turns. From opening an additional inspection center to adding resources and streamlining reconditioning processes, these used car heavyweights are expanding their recon operations because they understand the relationship of workflow efficiencies to inventory levels and turn.

CarMax’s acquisition of Edmunds in June 2021 and its new appraisal and instant cash-offer tool – further threaten the used car operations of dealers, as it pushes relentlessly toward the goal of becoming the world’s largest online buyer of used vehicles.

It’s never been more important for dealers to scrutinize every aspect of their reconditioning process – from the point of acquisition all the way to the frontline. In recon, every minute counts and equates to profit – either lost or retained. Plugging profit leaks across ineffective recon processes, minimizing holding costs, and controlling recon expenses are essential to survival.

Velocity Automotive Solutions has enabled dealers to redesign antiquated recon tracking practices with ReconVelocity – the industry’s leading reconditioning workflow management software, implemented during in-store training and supported with a dedicated performance manager to ensure buy in from all stakeholders involved in the dealership’s reconditioning process.

With ReconVelocity, dealers learn to embrace eight key principles of a high velocity recon operation:

1. Use software to manage and measure the efficiency of recon operations
2. Pre-define time thresholds for each recon step and measure performance daily
3. Have total transparency across recon workflows, including third-party vendors
4. Establish individual accountability for each step of recon
5. Have real-time communications across departments and vendors
6. Control vehicle value erosion by minimizing the average Time-In-Recon
7. Start the sales process immediately upon vehicle acquisition
8. Appoint a Velocity Manager to ensure that reconditioning progresses according to goals

To identify areas of opportunity for process improvements in recon requires having valid measurement tools in place to accurately access the time (down to the minute) that units stay within each step of the recon workflow. It is not possible to accurately measure each step using spreadsheets, paper logs, or whiteboards since manual processes are prone to error – which has been the practice among dealers for decades. Rather, dealers can learn to manage by the numbers… that is, software-tracked seconds, minutes, hours, days, and weeks, so that everyone can be held accountable for their part in achieving performance goals.

ReconVelocity’s advanced reconditioning workflow management software enables dealers to:

• Improve cross-departmental communications
• Approve repairs within minutes from any location
• Reduce vehicle idle time to an absolute minimum
• Have total visibility of every unit in each step of the recon process
• Access MPI results in real-time from any device
• View appraisal notes, inspection photos, and more on- and off-site
• Hold vendors accountable for achieving targeted time-thresholds for the work they perform
• Identify bottlenecks in the recon workflow for quick process adjustments
• Alert responsible individuals as units move from one step to another
• Using Smart-Step Routing technology, progress vehicles to the next step with one click
• Define customized steps and sub-steps that accommodate the structure of any recon operation

Some of the largest and best-performing dealers in the country utilize ReconVelocity to ensure that their recon operations are streamlined and efficient, such as Sonic Automotive, Berkshire Hathaway, Paragon Honda, Greenway Auto Group, Hendrick Automotive, and Premier Automotive to name a few.

To learn how ReconVelocity can enable your dealership to build a reconditioning operation that gets vehicles Retail-Ready in 3-5 days from the point of acquisition, visit www.velocityautomotivesolutions.com or call (850) 505-3948 to speak to a reconditioning expert.

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