On The Wash Front

Automation - A Strategy to Contain Costs

By Robert Roman

04/01/14

Historically, car wash owners have been hands-on people. However, the success of the new car wash formats has shown that automation can increase efficiency and free up valuable time.

Every car wash consists of time-consuming tasks that require attention. By automating those tasks, owners can free up more of their time and their employees’ time to focus on other productive activities.

Consider, for example, an automated pay station that prompts customers, handles their order, suggests an up-sell, and processes payment, all of which greatly reduces the need for greeting by people.

Automation is a strategy businesses use to contain costs. It consists of integrating applications, restructuring labor resources, and using computer software applications.

Automation should begin by identifying tasks with the lowest value added. Some washes still hand dry vehicles with towels by design or out of necessity. Two people, fully burdened, costs roughly $36,000 annually. Investing $18,000 to upgrade chemical, brushes, dryers, etc. to produce a cleaner and drier product and eliminating these two positions would have a first-year return on investment of 100 percent.

Automation also helps avoid human error while saving time in execution. For example, if you want to retain a human element, hand-held transponders help minimize data entry and distance advisors must walk, cutting the time spent in two.

Another aspect of automation is thinking about where you want to be in the future. For example, consumer trends indicate consumer demand for mobile payment is growing quickly; this means being ready for customers that want to pay with a Smartphone, tablet, etc.

This requires vendors capable and willing to support your vision and economics that work for the business. Consequently, car wash operators need to pick a technology partner that has the right level of scope, innovation, and technology and can scale with them.

Automation requires an understanding of the financial relationships involved in the business. Before executing the business automation process, determine the cost for completing the car wash process in its current state.

This means calculating staff hours used by process or workstation, relevant wage rates, and associated costs such as materials and supplies. The goal is to quantify what is spent, on average, in managing the process.

For example, an operator may determine that it costs $3,500 per month for each greeter and $1,750 per month for each cashier.

If the greeter generates $12,500 more in extra sales per month than the typical greeter, the position would provide an excellent return on investment (ROI). Conversely, the cashier’s position produces less income and about 1/3 the return.

Like building a new wash where development cost should be matched with market potential, the cost to implement and support automation needs to make sense.

To determine ROI, the cost of automation should include staff time, hardware and software costs, and maintenance and support costs. Besides the cost, you will also need to ensure that employees understand the automation, how to use it, and what the benefits are.

Sometimes, if you automate an inefficient manual process, you will get an inefficient automated process. For example, assume we are opening an express exterior in a market with no such washes or making the switch from full-service to ride-thru format. Like establishing a positive addiction, a positive experience (ride-thru) may not be very enjoyable at first and provides initial negative feedback (e.g., complaints, mishaps). However, it will gradually become more enjoyable with experience and creates future benefits.

For example, ride-thru has a faster process and lower prices that save customers time and money. However, automation can’t do everything and there are only so many signs to post and instructions to hand out. So, the owner needs to influence this experience by rewarding customers.

This might require riding though the wash with customers, offering free passes, and providing instruction pamphlets. A strong customer loyalty program with some freebies and frequency discounts will help the transition.

 

Bob Roman is president of RJR Enterprises – Consulting Services (www.carwashplan.com). You can reach Bob via e-mail at bob@carwashplan.com.



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