Have You Considered Going Lean in Your Auto Dealership Process
In many ways, the process of moving customers from checking out some cars to buying their dream vehicle is the core variable in your auto dealership success. If you get it right, you’ll get plenty of referrals from happy clients who send their friends and family to have the same positive experience. If you don’t, the opposite tends to be the case.
But how do you improve that process? How to you make sure that even as they wait for financing and bank approval, your customers don’t grow annoyed or discouraged? One solution is to borrow a common management principle in the manufacturing industry: it may be time for your car dealership to go lean.
What does it Mean to Go Lean?
The core idea of this management philosophy, according to the Lean Enterprise Institute, is to maximize customer value while minimizing organizational waste. Through a process of continuous improvement and incremental change, you build your organization toward a process in which everyone is involved in making sure that the company runs as efficiently as possible.
Don’t take waste in its literal sense here. Within the lean framework, the originates from the Japanese Muda, which (fittingly) evokes mud. It describes any wasteful processes that may slow your business down and prevent it from operating at peak efficiency.
For example, your dealership may have an established process of sending every potential car buyer to your front desk, where they wait for a salesperson to get assigned to them. That wait time, of course, could be considered Muda. If the customers could check in automatically, you eliminate work for your front desk receptionist and improve the speed of your service.
The Origins of Lean in Car Manufacturing
The company first embracing lean, fittingly, comes from the car industry. The process was first introduced by Henry Ford, before Toyota revolutionized the industry with principles in which cars could be created more efficiently and cost-effectively than any of its competition. Lean as a concept was born, and spread rapidly.
Today, lean is a guiding principle for countless manufacturing companies around the globe. It functions so well in that sector because most manufacturing depends on automated processes, which can usually be optimized (and waste eliminated) through a series of simple, small improvements.
How you find these improvements opens the door to another core principle of lean: in this management philosophy, everyone is involved. Employees at every level can make suggestions on how their work may be improved or made more efficient. These suggestions are evaluated for greater organizational impact, and implemented quickly if that impact is positive.
Applying Lean Principles to Your Car Dealership
How does a manufacturing concept apply to your car dealership? As it turns out, in more ways than one. We already mentioned above the example of customers having to wait less if you can make the process of assigning a sales representative more quickly and automated. But other examples throughout the auto dealership process abound.
For example, what if you could minimize the amount of times your salespeople have to call the bank for financing information? The time between choosing a car and waiting for the loan to come through tends to be the most strenuous for any car buyer. Improving that process can lead to a significant increase in customer satisfaction.
Streamlining your process, of course, requires more than just a few changes. That’s why the embrace of continuous improvement by lean practices is so beneficial. Once your organizational focus shifts toward that goal, your process will improve. And of course, that process will eventually include financing–which is where we come in.
Our goal to streamline dealership sales and finance processes aligns perfectly with the core principles of lean. To learn more about what we do, and how we can help you improve your auto dealership process, contact us.
Author: Pete Maclnnis
Author Bio: Pete brings over 37 years of experience in automotive finance and technology as Founder and CEO of eLEND Solutions™. Founded in 2003 as DealerCentric, eLEND Solutions™ is an automotive FinTech company specializing in online and in-store digital credit, identity and finance solutions designed to create a more efficient and profitable vehicle purchase process for the retail automotive industry.