Supported by investors with deep pockets, competition among pure online vehicle dealers is intense. Their goal is to transform the shopping experience for used cars by offering high-quality, refurbished used vehicles, simplified transactions and exceptional customer service. Our customer purchases vehicles, prepares them and uploads detailed profiles to his website. Once the vehicle is purchased, they deliver it to their customers throughout the United States.
The original operating model of the private equity-backed company was to clean, photograph and offer for sale vehicles before processing was complete. This approach accelerated the sales cycle, but sometimes forced buyers to wait for weeks until the vehicles were actually ready for delivery.
The actual throughput (vehicles per day) was 40% lower than expected due to a high reject rate during the treatment process;
Herausforderung: Überholung vieler verschiedener Fahrzeugmarken und -modelle nach hohen Qualitätsstandards mit erheblichen Volumenschwankungen.
When we started working with the company, the reprocessing process took an average of 21 days, and the yield on the first run (zero defects at the end of the reprocessing process) was about 40%. After helping stabilize existing operations, TBM worked with the company to transform its sales model." Now the vehicles are first refurbished, then photographed and offered for sale.
In order to carry out this changeover without a massive increase in inventory, much shorter processing times were required. These times have been shortened to only 5 days. Along with other changes, TBM helped the company reduce overall inventory, maintain capital requirements, improve profit margins, and halve the time between order and delivery.
Lösung: Eine umfassende Lean-Manufacturing-Umstellung, beginnend mit Standardprozessen zur Verbesserung der Qualität, der Gestaltung der Arbeitszellen, der Verbesserung des Gesamtflusses, der visuelleren Gestaltung der Fabrik und der täglichen Managementmethoden, um den Fortschritt aufrechtzuerhalten.
Our first task was to standardize the initial inspection process and the way the reprocessing work was specified and planned for each car. After identifying the main culprits for the low yield at the initial inspection, we helped introduce stricter quality standards and processes while transferring more quality responsibility to individual repair departments.
Workflow changes in the painting area, which was a major bottleneck, included the reorganization of the workplace, a new scheduling process, and standard work. All of these improvements reduced paint backlog by 80%.
Our goals were:
- Improve profitability
- Improving quality
- Increase in capacity for vehicle preparation
- Doubling of daily output
- Reduction of labor costs for processing by 25
- Delivery of more than 97% of orders within two weeks
Ergebnisse: Jährliche Einsparungen bei den Wiederaufbereitungskosten in Höhe von 10,8 Millionen Dollar
To maintain progress, TBM worked with the company to expand some existing programs and launch a number of new initiatives. Performance boards give employees and supervisors an immediate overview of how they are doing on a given day.
Sustainability efforts are supported by problem-solving training for employees, supervisors, production managers and site managers. The collaborative and team-based techniques are learned in the context of the real-world problems they face on a daily basis, including a clear escalation and chain of help process.
Overall, we were able to:
- Reduction of the throughput time for reprocessing from 21 to 5 days
- Reduction of labour costs per unit by 30
- Reduce rework costs by $600,000
- Improve quality from 50% to 87% the first time.
- Total annual cost savings on reprocessing of $10.8 million ($24.5 million if the Company achieves its revenue target)