In recent years, forward-thinking auto dealer groups have increasingly recognized the shortcomings of traditional, paper-based manual portfolio audits. The market has responded, and there are now a growing number of digital inventory audit solutions available, specifically aimed at dealers rather than funders.
These dealer self-audit solutions employ a wide range of technologies in a bid to enhance the robustness of the inventory audit process and provide more timely and accurate information to decision-makers.
In this guide, we look at what’s driven the switch to
digital dealer auditing and some of the key technologies being used.
The Requirements of Dealer Audits
Put simply, inventory audits are required to discover the number, location, and sales status of the dealer’s asset portfolio. This information not only allows dealer decision-makers to manage the portfolio effectively and maximize sales opportunities but also provides essential asset reporting to funders assessing the creditworthiness of the group.
The increasing use of digital sales channels has made timely asset data even more important, as customers search for relevant stock expecting a ‘live’ view of vehicle availability. Reconciling vehicle sales data across both online and multi-site forecourt channels can be particularly challenging.
Dealer Audits Make the Switch to Digital
The inadequacies of manual dealer audits are well understood by those organizations that continue to use them. Perhaps the most obvious is the fact that the data they provide is prone to inaccuracy, ages extremely rapidly, and requires manual input to management systems for reconciliation and reporting purposes.
In addition to this, they are time and resource-consuming and can have a disruptive impact on sales activity while they are being carried out.
These shortcomings can have serious implications for the success of the dealer group, including missed sales opportunities, poor customer service experience, increased overheads, reduced funder confidence, and poor management decision-making.
To overcome these issues, technology-driven inventory audit solutions have been launched that utilize developments from other industries with rapid inventory turnovers, such as warehousing and delivery businesses. These work with varying degrees of success when transferred to the automotive sector with its unique requirements and challenges. We’ll take a look at some of the key technologies below.
Dealer Inventory Audit Technologies
Barcodes and QR codes
Bar codes, and the now equally-ubiquitous QR codes, are used for asset tracking purposes across numerous industries – it provides the entry point level of technology when dealing with high-value assets such as cars.
A sticker is simply attached to the vehicle with a unique code that is scanned via a smartphone or a dedicated reader as part of the audit process.
NFC Stickers
Similar in concept to the above, NFC (Near Field Communication) unique stickers can be applied to vehicles and read using the same technology used in contactless payment systems. The auditor simply scans the sticker using a smartphone app to track each vehicle in the portfolio.
Radio Frequency Identification
Radio Frequency Identification (RFID) technology tends to be used in large-scale storage and warehousing contexts. It utilizes tags that can be scanned from up to four to five meters away (Near Field Communications can only detect tags within a few centimeters), using different types of radio waves. The advantage of this technology is that multiple asset tags can be scanned simultaneously.
Digital Imaging Solutions
Cutting-edge digital audit solutions tend to opt for imaging technology to verify the identity and location of an asset at a specific moment in time – this has the significant advantage of not requiring additional stickers or tags to be applied, which can be lost or deliberately manipulated. For auto assets, imaging technology is usually used to capture the vehicle’s unique VIN (Vehicle Identification Number) using the following process:
- A smartphone app is used to capture the vehicle’s VIN
- Character recognition software then matches this to the vehicle’s VIN in the dealer’s database
- The digital audit record is automatically stamped with the precise location and time
- Additional images can be taken to assess the condition of the vehicle and identify any damage
The Connected Car
As more and more devices gain connectivity capabilities, the Internet of Things (IoT) is becoming a key source of data and insight for decision-makers. Many vehicles now have this connectivity, allowing dealers to automatically append onboard data to their audit records.
This data could include mileage, service records, emissions performance, collision reports, and a variety of information about the vehicle’s specification.
There are two ways that this information can be accessed:
- Using a device plugged into the car’s OBD-II port that can be wirelessly connected to the device running the audit software.
- Connecting to the vehicle’s engine control unit (ECU) and other onboard systems via its own wireless internet connection.
How to Select the Best Inventory Audit Technology
The best-fit inventory audit solution for an auto dealer group will, naturally, differ from one organization to another, but there are some key considerations when looking for dealer auditing technology; these include:
- How robust is the digital auditing process, and can it be carried out by any member of staff?
- Does the data recorded provide unequivocal evidence of each vehicle’s existence and location at a given time and date?
- Is the dealer auditing technology capable of capturing additional information during the process?
- What are the initial and ongoing costs, and what additional hardware or software needs to be installed?
- Are there any vulnerabilities that leave the solution open to exploitation or fraud?
- How flexible is the solution in adopting new technologies as they emerge?
About LotCount
LotCount specializes in digital inventory solutions for the automotive sector and is part of CheckVentory, an award-winning technology solutions business that’s been providing innovative, digital audit solutions for nearly a decade.
You can learn more about the powerful benefits of auto inventory auditing in this
transformative case study.
