How to Identify and Close Gaps in Your Reconditioning Process – Dennis McGinn and Scott Gruwell

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On today’s show, Dennis McGinn, Founder and CEO of Rapid Recon, joins us in-studio with Scott Gruwell, Dealer Principal at Courtesy Chevrolet in Phoenix, Arizona, who joins us via Zoom.

Rapid ReconVIDEO TRANSCRIPT:

Jim Fitzpatrick: Hi, everyone. Jim Fitzpatrick with CBT News. Thanks so much for joining us today. Today, we’re very excited to have with us Mr. Dennis McGinn, who is the founder and CEO of Rapid Recon in the studio with us and then along with us we also have, via Zoom, Mr. Scott Gruwell who is the GM of Courtesy Chevrolet in beautiful Phoenix, Arizona. Thank you for joining us today, Scott.

Scott Gruwell: Thank you.

Jim Fitzpatrick: We wish we were in Arizona, don’t we? Rather than Atlanta where we had some fall weather.

Dennis McGinn: Oh, yeah, especially since it’s not summer anymore.

Jim Fitzpatrick: That’s exactly right. Well, thanks a lot for joining us, Scott. We appreciate it. A lot of the viewers know Dennis McGinn, he’s been on our show talking about Recon now for the last couple of years and I think he’s opened up the eyes of many dealers to say, “Hey, you may have a problem in your recon center or your recon department with regard to how long these vehicles are taken to get to the front line.” Talk to us a little bit. If you would, Scott, about the issue that you had prior to bringing Rapid Recon in and maybe some of the issues that has fixed.

Scott Gruwell: Yeah. So thank you, Jim. Us car dealers out there, we’re always getting frustrated when you go buy some vehicles in the line or you get some program vehicles in or some fresh trades and you go back there and you look at it and a week later you look at it again and you get frustrated why it’s not on the front line, right, ready to get merchandise and sold. So about five or six years ago, Dennis and his team engaged with us on the Rapid Recon, the software tool. And it’s been eye-opening at first, and then it’s just really, really driven our Recon time tightened it up. Before literally, some vehicles were on hold or parts issues and/or whatever the excuse might be. We all heard all of the excuses out there.

Jim Fitzpatrick: Yes, we have. That’s right.

Scott Gruwell: And literally, what his tool has done for our organization. I run on five stores that I have and I’d like to feel like we were pretty damn good at the used car business. And what it’s done is really sort of peel back the onion. Most of you CGMs and dealers out there understand, or when you start saying, “Well, what’s going on with this?” And all of all these sudden finger-pointing starts going on and you’ll see frustration here. What that does, what Rapid Recon does is it really takes away the finger-pointing. It was a little bit of a structural management change when we implemented it, but it really exposed some of the deficiencies we had five or six years ago on that, and it’s been eye-opening and now there’s no finger-pointing. I mean literally, we track it every hour, every day for all five stores and now we have internal contests who could get the tightest to line.

Jim Fitzpatrick: Really?

Scott Gruwell: Yeah. And it’s really worked out well. A lot of the internal competition’s really worked out well.

Jim Fitzpatrick: Do you remember, Dennis, when you met Scott and brought the program into them and what the days were that the cars were sitting in recon?

Dennis McGinn: Well, you probably have to ask Scott that, what they were, but most of the time they don’t either don’t know or don’t want to know.

Jim Fitzpatrick: That’s a good point.

Dennis McGinn: They only want to get on with it and get to where they have a starting point with it. But one of the things that he mentioned, which was really the biggest first challenge was to create something where the individuals using it said, “Oh, I like being accountable now, because I can see what everybody’s doing,” and I can say, “Okay, I can see it, what I’m supposed to be working on, and now I’m done. Click, I’m done,” and nobody’s going to be asking me questions because they can all see what I’m doing.

Jim Fitzpatrick: And, Scott, did you have any pushback when you installed this program and said, “Hey, we’re going full guns here?”

Scott Gruwell: At first, there really wasn’t. I mean, everyone has their skepticism about new software and new ways of doing it. But exactly what Dennis said, the recon manager, I had always had an excuse. This happened to be a parts hold excuse and so all of a sudden that opens it all up and realize, “You know what, recon manager? You’re absolutely arrived. We have a back counterparts issue where we need to speed that timeline up.” And so it really, really helps out the whole organization. Nobody likes to be thrown under the bus, but when you got the data there, you’d look at the data. You adjust and do your best to try to make it better.
I mean, we’ve gotten to the point now, Jim, is where if we have a set of inbound program cars or almost like a certified near-new kind of units. We pre-ordered the parts and we haven’t been [inaudible 00:04:59], and the vehicles coming in from a multi-state location or out of state on a transport but we already had the parts, at least the parts that we know that it’s going to be, because they have nowadays the technologies, you have pictures of the vehicles that you’re buying, so unmatched tires and you know the typical mileage, the filters and the wipers and all that.

Jim Fitzpatrick: Yeah, sure. Wow, that’s amazing. I mean you’ve taken it to the next level.

Scott Gruwell: Because we didn’t want to wait for the car to come inbound and then wait to go get the parts that we always buy or we always utilize, and so we pre-package those bins together with the VIN number and the stock number we create on the inbound time. And we’re all trying to reduce that time to line because the more times you reduce that time you’re able to make your turn and spin quickly. I wasn’t sure if you’d be familiar with the velocity model.

Jim Fitzpatrick: Yeah.

Scott Gruwell: Well, we embrace that at our organization here and it really assists with your turn. We have a couple of stores doing 18 turns a month and we think that’s a model that it’s been working for us.

Jim Fitzpatrick: Right. And the Recon was kind of the last frontier of that, right? I mean, you can buy the car, right, get it to the dealership on time. You’ve got to maybe even a customer waiting to buy that car within a day or two of it leaving recon. But it seems as though the recon process was really the bottleneck in killing that turn, right?

Scott Gruwell: It really is. Like I said, we knew that we sort of had a problem and this tool, this software system really opened up exactly where the log jams are because in the business it’s all about process, cars and the inspect and do all the certifications and such. And this really helps speed up the process. And, body shop, everyone who has a body shop realizes that it sort of sticks around there. Well, we’d have a little issue there, and we cleaned it up, and then now that guy’s real proud to get on the software and show somehow well he’s doing on it.

Jim Fitzpatrick: Dennis, is he a pretty much a typical scenario out there?

Dennis McGinn: Yep. Yeah. I mean, it takes a little while to kind of get everybody into the flow of things. So they’re all comfortable with passing the cars and knowing where they are. And one of the things that they’ve done and we emphasize is you keep the people communicating about how to improve things. Okay. And a lot of that leadership comes from the general managers saying, “Okay, now we see where we are and we will be able to see when things get off track,” And they’re always going to be a tendency for things to get off track. You can’t keep everything on track all the time, but you can’t manage if you don’t know where you are. If you’re not measuring it, you’re not going to be able to manage it. So that’s part of the game here that we do is bring that in. That whole idea of, “Okay, you don’t just have something that tells you where you are. You have something that’s so easy to use and so easy to iterate that we want to encourage you to try things and keep tuning your processes.

Jim Fitzpatrick: And, Scott, correct me if I’m wrong, but you’re one of the largest Chevy dealers out there, right?

Scott Gruwell: Yeah, yeah. With all our different facets of the business, the Phoenix location is one of the largest less than Mississippi. And we’re selling to 280 to 300 used a month out of our Phoenix location, and we’ve got that spin. And so it’s a lot of help. It’s obviously, a team but software like Dennis’ is really helped out with that spin.

Jim Fitzpatrick: So if you had other dealers that are thinking about this program and bringing it in, although they don’t have the volume that you have, they might get a hundred units a month out in terms of use, I mean, 75 to a hundred units a month, what would you say to them? Do they need a program like this at that kind of volume?

Scott Gruwell: Well, from my standpoint is absolutely yes. Whether it’s three units or 100 units, you still got, I always call him Rodney, tomatoes rotting, appreciating every day, so the quicker we can get it out, you’d be amazed. The whole velocity model and working with Rapid Recon is, I allocate a certain budget of used car inventory and that’s what it is. So they got to get the most out of the dollar amount they possibly can. And so if you’re able to shorten the time to recon, you’re able to utilize those dollars and spin it up faster and sell more cars with the same resources you currently have.

Jim Fitzpatrick: It’s got to help also with the sales department. I imagine the salespeople and the sales managers like it because once that car hits the photo booth or what have you, or word gets out that the car is out there. As you know, good salespeople always have a list of a customer’s potential candidates for that car that, that has been purchased and they want that thing out just as quickly as possible, right?

Scott Gruwell: Right. Well, in the world of the digital age that we live in now we’ve even got a step forward where we’ll let’s say not all the vehicles, but the vehicles that are in good condition that we buy at auction, they post pictures of those vehicles when we buy it at auction on wholesale sites. So we load it up with those pictures so-

Jim Fitzpatrick: Oh, the clock starts ticking.

Scott Gruwell: Actually, as soon as you say, “Yes,” that car to me, the clock starts ticking. And although it might not be fully ready to merchandise and retail but it gets the car out there and it gets the looks. And so we’ll have people saying, “I want to buy this car. It’s the right price point,” and blah, blah, blah and fits their needs and it hasn’t even landed here yet. And so a good salesman will work through that and then they put that with the software. It really tightened up that time and it’ll be sold one or two days after it clears with recon.

Jim Fitzpatrick: Right. Dennis, when you go into a large volume dealership like this and launch a program like this, what’s the time element that it takes to get everybody on board? Is this a 36-hour or a 36-day process?

Dennis McGinn: Yes. Yes and yes. Well, some people get to it right away. I mean some people say, “Okay, we-

Jim Fitzpatrick: Early adapters.

Dennis McGinn: Yeah, I mean, early adopters, but we get all the people together and we do a lot of GoTo Meetings. It’s very efficient for everybody we’ve gotten very good at it and we can see who’s getting with it and who’s not right from the get-go. And then you launch the system and then you almost immediately come back and say, “Okay, let’s see what’s working, what’s not.” You don’t wait too long. We do a seven-day checkpoint with the dealers. We do 30, 60 and 90 and we’re very good now at being able to profile these things and see where either their process things that don’t look like they’re working or they’re individuals. So we see all the activity as well. And, of course, the dealers can see that as well, but it’s very straight forward. There are always a few people that kind of have to be brought in later and sometimes we’ve got to do a little remedial. But for the most part, they jump on it pretty fast because what? It’s taking anxiety out of, “Where’s the car?”

Jim Fitzpatrick: For, Scott, for the dealers that are listening to us right now and the GMs and such, what bit of advice would you have for them if they’re on the fence about something like this? Bringing something like this into their store?

Scott Gruwell: Really like most projects that’s interdepartmental. You got service reconditioning, you got parts and you’ve got the used car sales department. It really takes an initiative from the top, the general manager or the dealer-principal, the dealer-owner to really drive this because as Dennis says, “You have late adopters and you don’t want those late adopters messing up the process here, because it is a good process. It works. It’s a good software system. It really peels open. Now, typically, what we’ve found is the late adopters are the ones that are causing the problem to begin with. And so you really got to manage through that and realize that in the end, you’re going to have a better working process where it’s going to spin the cars faster. You’re able to make a little healthier front GP on the fresher stuff but you got to be committed yourself. If the GM or the dealer-principal is not committed then you just spin your wheels.

Jim Fitzpatrick: Gentlemen, thank you so much. Scott, thanks for taking the time out of your busy schedule there. Good luck to you and a strong close for October here and for the rest of the year.

Scott Gruwell: All right. Thank you very much, everyone.

Dennis McGinn: Thank you, Scott.

CBT Automotive Network, the number one most-watched network in retail automotive. This has been a JBF Business Media Production.

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