Making Change

A new pilot from the finance department helps get the right vehicles into the right markets

August 08, 2017
Showing Off --  Jeff Cawyer walks through the basics of the Sales Optimization Tool he designed to help the regions better order vehicles. (Photos by Tim Rice)

Jeff Cawyer understands that change is the sum of opportunity plus effort.
 
A few years ago, the senior financial analyst of revenue optimization saw an opportunity to help change the way Regions order vehicles for dealerships. So, he built business intelligence dashboards to help them.
 
Cawyer’s creation is called the Sales Optimization Tool. It’s built on a platform called Tableau, and sorts and color-codes sales data to show which vehicle models, colors, options and trim levels are selling the fastest – or slowest – in a given geographic area. Elements of this analysis were done previously in Excel, but the new tool enables Cawyer and his teammates in finance  to produce the information more quickly.
 
With only five business days each month to order new vehicles, it’s imperative that Region team members quickly access data. With its color coding (green means a model is selling faster than average, red means slower) and sortable tabs for things like profitability, sales velocity (how quickly certain models are selling) and volume, the Sales Optimization Tool sheds new light on opportunities in the market.
 
“The tool doesn’t tell Regions what to do. It just helps them get better data to help with decision making,” Cawyer says. “It helps them point out some opportunities that, since they know their market so well with their field and sales experience, they can check and see if they agree. Balance it out with other feedback, with their pipeline data to help them with their decision making.” 
 
To further help the regions find these mix opportunities, the revenue optimization team has been providing the regions with monthly mix or option shift suggestions that could help sell cars faster and increase revenue. The team currently analyzes limited series for certain regions, but hopes to expand its analysis to cover all series and all regions.
 
Since March, the tool has been piloted in the Denver, New York, San Francisco and Los Angeles Regions and the Lexus Eastern Area. The response has been overwhelmingly positive.

A Perfect Companion
 
John Miller recently began a new job as the franchise renewal manager for the Denver Region. But until last month, he was the vehicle supply manager for the Region. He was one of the first to experience the Sales Optimization Tool, using it for his last three orders. In that time, Miller regularly gave Cawyer feedback on what was and wasn’t working.
 
Miller explains that he used the tool works alongside the already established Toyota Pipeline Visualization (TPV), a similar program that offers important data and tells how many of a certain model are allotted for each Region. Using information from both sources, the Regions pick the amount of trim level or color.
 
The Sales Optimization Tool gives historical data – for 1, 3, 6, or 9 months and beyond – about what’s selling where. Is a Super White 2-wheel drive 4Runner hot in Arizona? Increase the order. Are sales of Barcelona Red Camry SE models declining in Utah? Maybe trim back a little bit and order more of something else.
 
“That tool gives me insight to what models are going to turn around the fastest, and provide the most profitability for the company,” Miller says. “It shows me profit by trim level, so if I’m going to make a decision on what model to build, and which is going to sell the fastest, I’m able to use the Sales Optimization Tool to see how much we can make from one model vs. another.”
 
And that helps customers looking for a new car, since Regions tend to increase orders for more popular models.
 
 

Turning Heads

 
When Chief Competitiveness Officer Norm Bafunno started his job in January, he began searching the company for examples of how TMNA is becoming more competitive within the auto industry.
 
Cawyer’s Sales Optimization Tool caught his eye.
 
“It could make us more competitive and earn more revenue,” Bafunno says. “So we’re seeing results from a tool like this, and I think it has great potential in the future. We think this could help us in a way that we haven’t really seen in the past.”
 
Bafunno was so taken by the tool that he singled Cawyer out at last week’s North American Business Update meeting.
 
For Cawyer and his team, those accolades are nice, but just a byproduct of doing the job. He seems most at home showing off the tool to interested parties.
 
“The Regions can see that 4Runners are selling in 30 days,” Cawyer says in front of a giant monitor in a meeting room at TMNA headquarters in Plano. “But the two trim levels in red are selling slower than that, at 39 days. That’s one of the benefits with this tool. Anybody can look at this and, right away, know where potential opportunities are.”
 
Of course, finding potential opportunities is the key to competitiveness. And sometimes, as Cawyer shows, it’s as simple as color- coding information, or putting a metric like profitability at the fingertips of our Regions.
 
“This is the simplicity of what we need to do,” Bafunno says. “To me, this tool just exemplifies the kind of thing we want to see.”
 
By Dan Nied
 

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