Dennis McGinn Discusses How Dealers Can Create Less Waste In Their Inventories

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On today’s show, we’re pleased to welcome back Dennis McGinn, CEO and Founder of Rapid Recon, a data-driven solutions company that aims to reduce inefficiencies in your dealership’s reconditioning process. Stop by the Rapid Recon booth #2693C at this year’s upcoming NADA Show for a free demo and a copy of Dennis McGinn’s latest book, “Inventory Is A Waste“.

Dennis McGinnVIDEO TRANSCRIPT:

Jim Fitzpatrick: Hi everyone, Jim Fitzpatrick with CBT news. I’m so excited to tell you who we have in our studio today to launch his very new book, Mr. Dennis McGinn, who is the CEO and founder of Rapid Recon. Dennis, welcome back to CBT news.Dennis McGinn

Dennis McGinn: Thank you, love being here.

Jim Fitzpatrick: Congratulations on the book, Inventory is a Waste. There you go. Congratulations on the book.

Dennis McGinn: Thank you.

Jim Fitzpatrick: It looks like an incredible read. I haven’t read the entire thing, the entire book yet, but I plan to. This is your second book. First book was Recon T2L.

Dennis McGinn: Yes.

Jim Fitzpatrick: Yeah, and everybody was grabbing that book and reading, “Okay, we got to learn more about recon.” You’ve become kind of the doctor of a reconditioning there. What do you want the reader to take away after reading the book?

Dennis McGinn: The first book, which was brought to NADA almost three years ago, was just to introduce the approach of time to align, so taking the reconditioning process and making sure you’re covering the whole time you own the car, from the time you own the car until the time it’s ready for customers to look at.

Jim Fitzpatrick: Sure.

Dennis McGinn: We had a lot of progress on that, but that wasn’t quite sufficient because cars could languish before that, not getting into the process and sometimes even in the middle and then sometimes afterwards before they were really customer viewable.

Jim Fitzpatrick: Right.

Dennis McGinn: T2L, Time to Line, was just a category or a way to describe the thought process of return on capital on your investment in inventory, thinking about that just about, as opposed to the technicians and the detailers and the body shop.

Jim Fitzpatrick: Right.

Dennis McGinn: That now has taken root, and I see requests constantly every day now with dealerships trying to evolve and improve their processes to be able to do that. This book takes that to the next level, which is instead of talking about wouldn’t it be nice to be on top of your time to line, in addition to your reconditioning, this then has a lot of examples in it, I think about 20 examples with from real customers, real dealers, about what they’re doing, how they’re getting there.

Jim Fitzpatrick: Okay.

Dennis McGinn: It’s kind of the next level. We know time to line is now become a KPI, a key performance indicator for a lot of dealers.

Jim Fitzpatrick: Right.

Dennis McGinn: Some groups have actually taken it on themselves for all their stores at the corporate level. I tried to, in this one, I tried to put in a lot of the material I’ve written since the first book about that subject, about what people are doing specifically because they don’t want to hear from me.

Jim Fitzpatrick: In the book, you feature some key people with big automotive groups. Here’s Andy Graff, who is with Galpin Automotive Group, right?

Dennis McGinn: Yep.

Jim Fitzpatrick: Big name, a big believer in your product, right?

Dennis McGinn: Yep.

Jim Fitzpatrick: Talk to me about that.

Dennis McGinn: Yeah, so we found that there is one really good way to get this thing going, which is to, not from the top down where somebody at a high level says, “Hey, everybody has to use this,” because the product needs to be owned by the general manager in their team. It needs to be shaped into their way of doing things and then immediately they need to start evolving it. It can’t ever be static. That’s my whole deal. It’s got to be like that.

Jim Fitzpatrick: Right.

Dennis McGinn: In this case, Galpin set it up so that the stores are pretty independent, the GMs run their stores, which is the way most people do it. We go in and we work with the stores individually on their own processes and their own improvements.

Jim Fitzpatrick: Sure.

Dennis McGinn: We give them that kind of attention. Andy saw the value and the overall consistency of using a tool like this, but everybody using their own version of it or being able to tune their own version of it.

Jim Fitzpatrick: Okay, gotcha.

Dennis McGinn: That’s why he’s such a big supporter.

Jim Fitzpatrick: The software has that kind of flexibility built into it?

Dennis McGinn: It does right from the get go. We have… Stores would have six or seven steps and some that have 50 or 60.

Jim Fitzpatrick: Oh, my gosh, wow.

Dennis McGinn: Yeah, where everybody is in there, all the detailers, all those people, the body shops, and we found that the more usage, the more take-up, more individuals you have saying I own this, the better information you’re going to get.

Jim Fitzpatrick: Right. Yeah, that’s pretty cool. Even right down to the vendors where you’ve got somebody that specializes in paint and dent or an upholster, somebody that’s in upholstery and fixes upholstery, they know when a vehicle hits the lot, right, and it alerts them.

Dennis McGinn: They’ve become an integral part of what we do for [inaudible 00:05:12] dent wizard. They’re in a lot of our systems as a user. They’re just an extension of that deal, of the customer’s team, and they need to know and they need to be accountable top. We’re actually going to be announcing some things at NADA here in a couple of weeks to take that vendor part of our product to the next level to make it easier for them to be part of that team. We’re going to facilitate that. Yes, it’s vital.

Jim Fitzpatrick: Yeah.

Dennis McGinn: They can’t, dealers can’t get by without that. A typical vendor or a typical dealer has five to eight or 10 of these vendors.

Jim Fitzpatrick: That’s right. Yeah, for sure; if not more, if not more.

Dennis McGinn: Yeah.

Jim Fitzpatrick: This is really 10… You guys have been, it says where 10 years Rapid Recon. That’s how long you’ve been helping dealers in their recon.

Dennis McGinn: Yes.

Jim Fitzpatrick: Yeah, you’re like the grandfather of recon.

Dennis McGinn: I don’t feel that old. Although, I am a grandfather.

Jim Fitzpatrick: No, but I think you brought it-

Dennis McGinn: I am a grandpa. I had my fourth grandchild just a week ago.

Jim Fitzpatrick: Congratulations.

Dennis McGinn: Thank you.

Jim Fitzpatrick: I, too, have four, so I know the feeling.

Dennis McGinn: I know, yeah. I’m feeling I’m falling behind.

Jim Fitzpatrick: That’s good.

Dennis McGinn: In fact, when I started this in 2010 it was because some people in the business said, “Hey, there’s a problem here. Everybody’s kidding themselves,” so I got involved. I think the reason it worked for me is because my background, Hewlett Packard technology and things like that, I came in and I looked at this as an outsider from the process.

Jim Fitzpatrick: Yeah, you want a car guy, so to speak.

Dennis McGinn: Yeah, I wasn’t a car guy.

Jim Fitzpatrick: Right.

Dennis McGinn: Although, I’d worked with a lot of the manufacturers from that side, so I understood the OEM side.

Jim Fitzpatrick: Right.

Dennis McGinn: Here, everybody was just trying, kind of in blinders.

Jim Fitzpatrick: Yeah.

Dennis McGinn: Okay, our spreadsheet and they were just kind of kidding themselves because they didn’t feel like they could trust the right information anyway. I said, “That’s not good.” I came in and I said, “This is not a static process with a worksheet or something. It’s got to be manufacturing-related.”

Jim Fitzpatrick: Yeah.

Dennis McGinn: That’s how they do it. That’s the way they produce all the phones and things, all these overlapping workflows, so we got into that and said, “Okay, we need to take this down that track,” and this is the culmination of nine and a half years of learning and not just look-, going on a step at a time. I’m really proud of this. I’m really proud of where we are. We have a great team of people. We have terrific support. All that stuff is working really well, but we’re still just getting started.

Jim Fitzpatrick: Right.

Dennis McGinn: We’re going to take this thing to the next level at NADA with regards to where the cars are physically, where the keys are physically and how the vendors can-

Jim Fitzpatrick: Wow, so there’s a whole new depth to this?

Dennis McGinn: Yep.

Jim Fitzpatrick: Yeah.

Dennis McGinn: Yep, and how we can give the vendors more control of what they’re doing because they want to be accountable too.

Jim Fitzpatrick: Yeah, of course, of course. Needless to say, the recon area is one of those last areas that a dealership needs to focus on because the cars sit in recon so long if they’re not being monitored by some kind of software, right? Obviously, yours does just a phenomenal job in doing just that and bringing it to the forefront because there’s dealers out there, as you just said, that think, “Oh, my vehicles get out pretty quickly,” and then when they take a closer look at it, they’re in there for two weeks, they’re in there for three weeks and, meanwhile, the clock’s ticking away on that used vehicle.

Dennis McGinn: That’s always the case.

Jim Fitzpatrick: Yeah.

Dennis McGinn: We go in, and it’s usually people will get frustrated that I don’t know where my cars are, I just don’t, and they get frustrated and they boil over. They’re so used to ignoring it that until it boils over a lot times or they say, “Okay, I’m going to try something,” so that’s where it begins.

Jim Fitzpatrick: Yeah.

Dennis McGinn: The amount of money that I’ve learned involved with what’s not paying attention to this, so it’s really 10 or 15 days, not five days, a couple of turns. It turns out to be a lot of money, and it rolls right to the bottom line for these guys. That’s what this is about. The title says Inventory is a Waste; that really is what I mean.

Jim Fitzpatrick: Sure.

Dennis McGinn: There’s probably twice as much inventory out there as is needed in the whole industry.

Jim Fitzpatrick: Isn’t that crazy?

Dennis McGinn: Yeah.

Jim Fitzpatrick: Just because they’re stuck in recon.

Dennis McGinn: This is about turns and profit per vehicle.

Jim Fitzpatrick: Right.

Dennis McGinn: Okay, so that’s [crosstalk 00:09:36]-

Jim Fitzpatrick: And it’s loaded with best practices from some of the biggest retailers out there.

Dennis McGinn: Yes.

Jim Fitzpatrick: Yeah, that’s fantastic. How does somebody get the book?

Dennis McGinn: Okay, so they would then send a request to support@rapidrecon.com.

Jim Fitzpatrick: Okay, we’ll show it on the screen here.

Dennis McGinn: Okay, and just request a book. You can’t buy this. I decided we’re not selling it. It’s only for people by request, but I’m happy to accommodate, certainly, our customers to the extent.

Jim Fitzpatrick: Wow, very cool.

Dennis McGinn: The other one we printed-

Jim Fitzpatrick: That’s exclusively only for CBT viewers, right?

Dennis McGinn: Yes, only CBT users. They have to click… Yeah, put their fingerprint on it.

Jim Fitzpatrick: That’s right.

Dennis McGinn: Yeah, no, but I think I would like everybody in the industry to read this book. That would be my goal.

Jim Fitzpatrick: There you go.

Dennis McGinn: If they have something they can give back to me in terms of their ideas, I want to hear that too.

Jim Fitzpatrick: There you go. Dealers, it’s right here, okay? Figure out your recon. Get the book, first of all, and then let Rapid Recon tell you what it’s all about and how they can help you lower the number of days that that vehicle is in inventory or in recon, I should say, and get it out to the front line. You can’t sell a used car that isn’t reconned and you don’t want these cars sitting back there and, meanwhile, it just keeps clicking away day after day on interest and it frustrates the sales department, it frustrates the used car manager, it frustrates the recon manager; everybody gets frustrated when nobody knows what’s going on.

Jim Fitzpatrick: Grab the book, and it’s right here full of best practices and such. Dennis, I want to thank you so much for joining us once again on CBT News. This has been fantastic. As I said, the book will be available. Just watch the screen right there and we’ll show you how to get it.

Dennis McGinn: That’s terrific.

Jim Fitzpatrick: Thank you so much.

Dennis McGinn: Love being here. Thank you, Jim.

Jim Fitzpatrick: Great.

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