'Test Drive' Provides Instant Experience - On the Numbers
Construction Equipment Distribution magazine is published by the Associated Equipment Distributors, a nonprofit trade association founded in 1919, whose membership is primarily comprised of the leading equipment dealerships and rental companies in the U.S. and Canada. AED membership also includes equipment manufacturers and industry-service firms. CED magazine has been published continuously since 1920. Associated Equipment Distributors
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'Test Drive' Provides Instant Experience

By Garry Bartecki

Article Date: 01-01-2009
Copyright(C) 2009 Associated Equipment Distributors. All Rights Reserved.

AED presents a realistic simulation program that challenges business strategic thinking for dealer veterans and rookies alike.

I have been waiting for this moment for the last six months and I can finally announce AED’s Test Drive: The Business War Game for Distributor Operations, presented by PriSim Business War Games, and sponsored by BDO Seidman LLP. This program is industry-specific and available to dealer managers, aspiring dealer managers, bankers who service our industry, manufacturers with dealer networks, and service providers with a need to know how a dealership makes money.

AED titled this program Test Drive because it allows participants to “get behind the wheel,” so to speak, of running the operations (sales, parts, service, rental) of a struggling dealership over several simulated years while competing for customers and qualified employees.

At a time when dealers need to operate in a “lean” environment while at the same time preparing to maximize profits when an upswing occurs, how valuable is a sophisticated dealer simulation that provides adjusted profit/loss, cash flow and balance sheet statements after each individual input is made?! Quite valuable, believe me.

To make things interesting there are five or six teams in a session (25 to 30 participants total) that compete against each other. They all start with the same struggling dealership, decide on a strategy, implement their changes and/or new directions, compare their results against those of the other teams, and then discuss how each team achieved the results they posted. After each reporting period the moderator will throw in new challenges that will force changes in the way the strategy now gets implemented, and you go through another round – and so on until the end of the program. We’ll acknowledge the winners who have produced the best overall operating results.

These sessions are quite intense because you have to understand where each department is at, determine what changes are required to produce better performance, decide how your needs fit in with the overall strategy and then implement departmental strategy to see if you get the intended results – all within a limited time frame. Did I mention it’s intense?

Having gone through this a few times, I can attest to the fact that this program is sophisticated and industry specific – in fact, I’ve been advocating for AED to roll Test Drive out to the entire membership since I first encountered it last spring. Just about every type of action you perform on a daily basis is part of this program. So if you are a department head (or soon-to-be-department head) you get multiple-reporting-period experience in two days, experience that is very similar to real-life experience.

In addition, you get to implement different strategies to improve departmental results. After going through multiple reporting periods you have it pretty well figured out because departmental and overall operating results start getting better. Apply what you learn here and you are sure to bring “value added” back to your dealership.

You will be seeing materials about this program in future communications from AED. Test Drive is scheduled on: March 4-5 in Dallas; May 5-6 in Boston; and Sept. 30-Oct. 1 in Phoenix. But this means only about 75 people will be allowed to participate in this profit-producing program. Make sure you sign up as soon as possible if you want to attend.

Past attendees gave the program high marks, and it was tough to get some participants away from the computers at the end of the day. It’s so real that it is easy to get addicted to the process – you could sit there and work out business plans and projections until you are blue in the face. The balance sheet and cash flow reports really add to the output.

The best way to use this program would be to have the whole dealer management team participate at the same time: CEO, CFO, plus branch managers and heads of sales, parts, service and rental all working together to test different strategies and see if the expected results materialize. If that is not realistic I would send at least two department heads at a time to work through the process. New department heads should definitely attend.

Other exciting applications could include: (1.) having manufacturers sponsor a session for their dealers, (2.) having bankers sponsor a session for their field personnel, (3.) having manufacturers sponsor a session for their field personnel, and heck, (4.) even accountants in public accounting or CFOs would greatly benefit from this program.

Participants get to deal with strategy, receive continuous financial updates, wrestle with assorted marketing issues, analyze the returns their actions produce, learn to work as a team for the good of the dealership, and measure their results against industry benchmarks. You will get this same experience working at the dealership, but it will take you years (and a lot of lost profits) until you gain the proficiency you get after two days of intense use of this simulation model.

This is a great program, and I encourage all of you to learn more about it. Even in the current business environment, this is a must if you plan to run “lean” for 12-18 months. Register online at www.aednet.org/testdrive.

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