Carvana: Evolution of the Inspection & Reconditioning Process

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I see. Let's approach it this way then. Can you provide some basic statistics? Roughly, how long would it take from the time Carvana purchases a car until it is ready to be sold to a customer, as of your departure in 2023?

From the point of purchase to the point of being ready for the website, it was probably closer to 18 to 20 days. As you probably know, with all the media attention it has received, you have to be very careful about when you have the title. Legally, from the point of purchase, they have 30 days to supply it. So, you could have the car completed well before that, but it still just sits until the title is there before you can put it on the website. There are a few different ways to measure cycle time. One is when Carvana is photo complete and ready for the website. From a reconditioning standpoint, you have no control over whether the title is there or not. So that's where Carvana's cycle time calculation ends.

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After 2019, did parts become a more significant delay than titles, hence becoming the critical path? Was the system managed based on parts availability? Is that why prioritization was based on parts availability and speed? Please help me understand how you source parts and how that creates delays. I imagine there's a wide variation. Some cars might only need oil and tires, while others might need a specific part that takes five weeks to arrive. Could you explain how you identify vehicles based on their parts needs and how you source those parts? Ben mentioned progress in the part sourcing process. I'm interested in how part sourcing in 2023 compares to 2021 and 2019.

Previously, a vendor managed the parts department. Now, we have an in-house parts manager and associates, people with a vested interest.

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It seems like there's a lot of potential to streamline the process by routing vehicles through the system based on title availability. There's also an opportunity to identify the critical path for each vehicle and prioritize them based on the amount of slack in their schedule. Additionally, the price versus cost of parts could be prioritized based on the slack from the title element of the critical path. Is there a significant project here that could save five to 10 days on vehicle speeds and reduce the cost of parts?

Despite being considered a technology company, Carvana hasn't invested much in improving the inspection and reconditioning process. This process is still relatively simple and outdated, and there's technology available that could be leveraged. There's a lot of room for them to refine this process and increase efficiency. However, their priority is still to improve the front-end user experience. I'm not saying this is necessarily wrong, but there's still a lot of potential to improve the reconditioning process. It's far from being as good as it can be.

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