“Where there’s muck, there’s brass"

There was a great response to last week’s blog on the Near Term Dealer Model – I appreciate the feedback.  It’s always useful and sometimes picks up on specific points that merit further comment.  This is an example of that – with respect to the need to reconsider how processes work in dealerships, and whether there are opportunities to improve.  I mentioned a couple examples where responses to Covid had forced innovations and workarounds that proved to be more efficient and provide a better customer experience than the normal process that had been carefully defined.  However, it should not take a pandemic to question processes and innovate.  ICDP has its roots in the “lean” movement, and has with varying degrees of success tried to help dealers apply lean thinking to the dealer environment, particularly in aftersales.

What we saw during the pandemic was a reappraisal of how things were done in both sales and aftersales.  Some of the constraints – whilst dictated by the need to reduce the risk of viral transmission – could also be expressed in ‘lean’ terms of eliminating waste, whilst adding customer value.  For example, an unaccompanied test drive adds value to the customer (it’s what they have told us they want in our own consumer research) and it saves the sales executive being tied up for the duration.  Allowing the customer to manage more of the sales admin process at home in their own time, reduces the pressure they feel in a face to face environment in the dealership, and also allows the sales executive to have multiple deals in progress in parallel.  Improved scheduling of customers coming into aftersales reduces frustration for them, smoothes the workload for service reception, and reduces the number of cars parked around the dealership.  In addressing the pandemic-operating requirements dealership management have found that they also eliminated waste and improved customer satisfaction.

The process that they went through to plan for a safe reopening is also very close to lean methodology.  I am not aware of any group where top management sat round a table and came up with a master plan that was then imposed on the dealerships.  The process was much closer to the lean principles of Plan – Do – Check -Act (PDCA) which sits at the core of Toyota’s success.  Once the general principles were established, processes were redesigned on the ground, dealership by dealership, and tested to ensure that they were fit for purpose.  The Check-Act stages have been applied since to ensure ongoing compliance.  Having discovered the benefits that come – even accidentally – from a systematic and detailed re-examination of dealership processes, including setting aside some previously strongly held beliefs on what represented the “optimum” customer journey, we need to keep that going.  Whatever happens in the face of ongoing health risks, dealers need to adopt lean thinking as a way of life.

This latter point is critical.  The variation in the level of success has not been a function of the application of the techniques or the quality of thinking by the staff who are directly involved, or I must also add the quality of coaching provided.  It has been much more often related to the support from management and the need for them to understand that ‘lean’ is a state of mind rather than a 3 month or 6 month project.  Once you’ve prepared a used car, you don’t park it out front and leave it.  You have a team who will check the stock, clean them regularly, and ensure that they are always presented in the best possible way.  Management need to understand that ‘lean’ is never done – there will always be new opportunities that have just not been discovered yet.

The title of this blog has probably left a number of you puzzled, particularly those who are not native English speakers.  It’s actually an expression from the North of England, where “muck” relates to unpleasant work, and “brass” to money.  Given that lean thinking relates to the detailed, some might say tedious, examination of processes in order to identify waste, and that if that waste is eliminated, it saves money and improves other aspects of performance, it’s an expression that could be designed for the lean movement.  We need to go looking for that brass in our dealerships…