Empowering employees: Offering insight, improving performance
Fast facts
- Customer
Leading automotive manufacturer
- Business challenge
Consultancy and coaching help dealer employees gain financial and operational knowledge to improve network performance.
- Geographical coverage
Asia Pacific
- Solution implemented
MSX Performance Consulting Program, supported by Insight BM
Playing a proactive role
MSX is helping a leading OEM reinforce and strengthen the performance of its Asia Pacific-based dealer network with a comprehensive, face-to-face dealership consulting program.
It includes dealer coaching to equip employees with a better understanding of the business, and dealer performance improvement programs (DPIPs) which involve deep-dive discussions.
MSX helps dealer staff to take a more proactive role in business management and performance, helping them to understand issues and opportunities, develop action plans, and set priorities. MSX technology, Insight BM, generates financial reports that help the team identify which dealers need the most support and in what areas of business.
Creating informed decisions
The OEM wanted to educate dealer employees on how to use business management data to drive performance.
Employees understand their roles, but don’t always know how to prioritize the often-overwhelming numbers of tasks they undertake. The organization understood that by making information such as financial data and key performance indicators (KPIs) easier to access and more transparent, employees would better understand how their decisions and actions can influence different areas of the business.
Giving dealers direction
MSX deployed its Performance Consulting Program within the organization in 2021.
It includes an educational component, in which the MSX team offers face-to-face consulting to educate dealers and middle managers on the foundations of KPIs and how they affect performance. In addition, MSX dealer performance improvement programs (DPIPs) offer employees an additional four meetings a year. During these sessions, the team performs an in-depth examination of the dealership’s performance and KPIs – from financial KPIs to process, satisfaction, and people-related KPIs – and identifies issues and opportunities. The program’s competence enhancement element helps the team create highly targeted action plans and set objectives, which are measured for effectiveness and adapted later if needed. The team also trains staff in managing expenses and operational assets with greater efficiency.
The MSX Insight BM platform supports the program by generating performance reports that enable the team to identify the dealers they need to focus on, track KPIs, and monitor the outcomes of dealers’ activities.
Key Components of the Consulting Program
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Thorough Performance Analysis
Rigorous examination of KPIs across all departments.
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Actionable Insights
Identification of issues and opportunities, leading to a quantifiable action plan.
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Competence Enhancement
Training and development initiatives for the Original Equipment Manufacturer (OEM) field force to effectively implement action plans between consulting sessions.
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Discipline and Focus
Cultivation of a disciplined culture emphasizing ongoing improvement (kaizen).
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Expense Management
Proactive control and efficiency in managing dealership expenses.
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Asset Optimization
Lean and efficient management of operational assets.
Observations and results
Dealerships enrolled in the consulting program exhibit notable improvements compared to their non-engaged counterparts.
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Discipline and Focus
Increased emphasis on operations and continuous improvement.
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Financial Resilience
Demonstrated ability to weather economic downturns with reduced losses or sustained growth.
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Balanced Contribution
Achievements of a well-balanced performance across all dealership departments.
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Expense Management
Proactive control and efficiency in managing expenses, leading to sustainable profitability.
Impact on Dearlership Network Health
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Program vs. Non-Program Dealers
Non-program dealers had a 0.5% ROS increase in 2022 but faced a 0.8% decline in 2023. Program-enrolled dealers helped the OEM maintain and slightly increase overall ROS.
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Consistent Improvement
Program-enrolled dealers improved their ROS by 1% in both 2022 and 2023
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Fixed Operation Absorption (FOA)
Inflation led to higher overhead costs, outpacing fixed operation gross profit growth in 2023, causing FOA erosion. Dealers in the program improved FOA by 2.8 points in 2022 but faced a 9.8-point drop in 2023. However, their FOA was more resilient compared to non-program dealers.
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Enhanced Resilience:
Program dealers showed better expense control and after-sales operations, resulting in increased FOA despite overall network declines.
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Stronger ROS Growth
Dealers in the MSX Performance consulting program showed robust ROS growth, even in the challenging 2023 inflationary environment.
Supporting stronger dealerships
The OEM has seen a considerable improvement in performance across its networks.
With the layers of education now in place, the OEM and its dealers are fully prepared for peaks and troughs in performance, and the OEM has already been able to mitigate losses throughout the unfavorable economic periods of the last few years. In fact, enrolled dealers have achieved some significant improvements, and while those not taking part in the MSX program have seen a decline in some areas, the organization has still managed to protect and increase its overall return on sales (ROS).
Impact on Dearlership Network Health
-
Program vs. Non-Program Dealers
Non-program dealers had a 0.5% ROS increase in 2022 but faced a 0.8% decline in 2023. Program-enrolled dealers helped the OEM maintain and slightly increase overall ROS.
-
Consistent Improvement
Program-enrolled dealers improved their ROS by 1% in both 2022 and 2023
-
Fixed Operation Absorption (FOA)
Inflation led to higher overhead costs, outpacing fixed operation gross profit growth in 2023, causing FOA erosion. Dealers in the program improved FOA by 2.8 points in 2022 but faced a 9.8-point drop in 2023. However, their FOA was more resilient compared to non-program dealers.
-
Enhanced Resilience:
Program dealers showed better expense control and after-sales operations, resulting in increased FOA despite overall network declines.
-
Stronger ROS Growth
Dealers in the MSX Performance consulting program showed robust ROS growth, even in the challenging 2023 inflationary environment.
Enrolled dealers have become
more resilient.
Enrolled dealers improved ROS by
1% in 2022 and in 2023.
Enrolled dealers have increased
