Case Study: Car Dealership

This engagement was designed to improve the productivity of employees and the financial performance of the Service Department and the Parts Department of a Buick dealership.

Under the theory that “employees pay attention to what their manager pays attention to,” we worked with the managers of both departments to analyze the behaviors that determined success in each position and brainstormed methods that the managers could implement to regularly monitor those success attributes.

The biggest change in the Service Department was a behavioral change that required Service Techs to stop looking at a vehicle just in relation to the problem that needed fixing, but to view the vehicle holistically instead.  This resulted in major opportunities to up-sell customers on resolving issues to prevent vehicle problems at a future date.

To help achieve this behavior change, we implemented a Jiffy-Lube-type checklist that Techs were required to complete on each vehicle and that the manager would randomly sample before a vehicle left the garage.  In the Parts Department, the major problem was excessive inventory.  We implemented an A, B, C classification of parts based on utilization as well as a visual system for recognizing low inventory.

The biggest change was the implementation of preset minimum inventory levels that prevented employees from ordering products until the inventory reached the safety stock level and then only ordering based on specific parameters.

This resulted in about a 30% reduction of inventory as it was discovered that employees were ordering inventory to take advantage of receiving vendor gifts (i.e., professional sports shirts and jackets, NASCAR tickets, etc.) for ordering certain products and certain volumes.