Automotive dealers waste time, money and resources – can a lean approach be suitable for automotive retail as well?
- Lean approaches successfully established in other industries for production and retail
- Automotive dealers can benefit from adapting an approved best practice approach
- Standardized approaches are not sufficient – dealers’ specific situations have to be considered individually
- Interdisciplinary working groups to solve the dealer’s challenges internally are recommended
It has become more and more difficult to retail vehicles profitably due to many threats like increasing competition or decreasing gross profits. Thus, the dealer has to increase its competitiveness through efficient retail processes and structures. iic group recommends to implement the Lean Retail approach, which has already been proven successfully in various other industries.
Lean Retail at a dealer pursues three main goals:
- A slim (or lean) retail process through the elimination of waste. After a thorough examination of the retail process, all non-efficient factors that cost time and / or money shall be eliminated.
- Customer services that lead to sell more. It is not contradictory to strip down the retail process and in parallel enhance customer services, as long as the enhancements are necessary to offer a complete customer experience, which will be evaluated by taking the customer perspective.
- Positive long term effects through regular Lean Retail application by appointing internal employees to continuously pursue the compliance of lean standards at the dealership.
In automotive retail, so far, dealer optimization rather did not include lean thinking and therefore many so-called optimization projects burdened the dealers’ time, money and resources additionally. The reason therefore lies in the misconception that all dealers can be cured with one universal potion. iic group on the other side noticed that a more individual approach is more efficient and effective. “In our experience, an individually tailored process always serves better than a solution off the rack. This is why more and more automotive dealers want to apply Lean Retail in order to face nowadays’ challenges. To make this happen, OEM and NSC need to grant the dealers individual freedom.” says Igor Bonačić, managing director of iic group.
So the first advantage of Lean Retail is the ‘what’; another one is based on the ‘how’. Thomas Hegger, manager at iic group knows “Lean Retail pursues a change of mindset of the dealer staff. This can only be achieved, if internal staff is involved along the entire operation.” After an initial enabling by external consultants, the staff will be able to carry out independently all optimization steps (identification of potentials, definition and execution of measures) – for sure under selective external guidance. “Once that the lean mindset is implanted, the regular improvement process can be followed up completely without external help and can be handled by an internal resource on a part-time basis”, Thomas Hegger concludes.
Lean Retail does not require neither many externals nor does it bind much time and resources from internal staff. And the positive consequences at the dealer will pay back even that effort by a multiple.
For more information on Lean Retail, please contact iic group under moc.p1563391151uorg-1563391151cii@o1563391151fni1563391151.