WEST CHESTER, PA- October 29, 2010- While many operators have taken the first steps toward more efficient route scheduling by investing in vending management software, most haven’t moved on to step two – making the most of that investment. A considerable number of operators are using only a small portion of their vending management software’s total capabilities, missing significant opportunities to cut costs and gain more profits.
D&R Canteen of Rochester, Minn., invested in MEI EASITRAX® vending management software eight years ago to identify route efficiencies, analyze product sales and manage over/short cash information. Now the operator is taking full advantage of the software’s powerful capabilities for pre-kitting, forecasting and reporting to achieve further efficiencies – in the warehouse and on its routes.
Stu Riemann, project manager at D&R, and his team started by integrating their 3000 DEX capable machines with EASITRAX. They began using the system to generate accurate, detailed reports. For example, within minutes of running a report on coin changers, Riemann determined that he could remove more than $65,000 worth of change from the machines, take it off the street, and deposit it directly into D&R’s bank account.
D&R’s general managers regularly run ranking reports on machine profitability to relocate poorly performing machines and reduce the need to purchase new machines. They also monitor machines’ monthly sales. They can identify machines with the least amount of customer traffic to make adjustments to route schedules. In the first year D&R eliminated multiple routes, saving $150,000 per year.
The report data also helps predict consumption of fresh food, including sandwiches, cookies and pastries. This information, along with EASITRAX food forecasting functionality, has significantly reduced waste levels of perishable items. Another report lets them track price increases as they are initiated on each machine, increasing driver accountability.
Warehouse Organization and Pre-Kitting
“We knew we had a powerful tool, but we were only using about 45 to 50 percent of its capabilities,” said Riemann. So, D&R began overhauling its warehouse operations for pre-kitting, starting with the installation of a pick to light system that integrated seamlessly with the EASITRAX software. The system eliminated the need for drivers to spend time picking products.
Warehouse personnel now handle that task, pre-kitting each machine’s required products. Products are racked so they can be picked as efficiently as possible. When a picker inserts an order into the system, the racks light up, showing him/her which items and how many to put in the tote.
When the drivers arrive in the morning, they pick up totes containing the exact items needed for each machine. By only delivering what is needed, drivers have more time to service more machines in a day. And, because trucks are no longer weighed down with unnecessary products, they last longer, get better gas mileage and require far less maintenance. This has directly impacted D&R’s bottom line.
Increasing Profits by Forecasting Needs
Reiman then turned his focus to forecasting. He knew that mining machine data to better understand usage patterns was the only way to eliminate the “counting trip” for drivers and increase the number of machines that each driver could service.
Every night, after drivers return their handhelds with all their route data, D&R runs reports to determine which machines need to be filled and what products they require. Only those items are pre-kitted for the next day.
“When you zoom in and look at the data, you quickly see that there are things happening in the field that are costing your company a lot of time and money,” said Riemann. “The data is there; you just need to access it.”
D&R was able to take control of and automate a number of key data points that previously were controlled by route drivers– namely item level tracking. Since removing driver control of the data, D&R has achieved a .008 over/short percentage.
The system also helps with preventive maintenance. A report each morning tells the last time someone inserted a dollar bill into each machine. If a machine hasn’t collected any bills the previous day, they service the machine as soon as possible, preventing downtime, lost sales and frustrated consumers.
“Our machines are always full and almost always working properly,” said Riemann. “In fact, although the U.S. average is 17% sold down (from last visit) at time of replenishment service, D&R now approaches 50% sold down at time of replenishment.”
Pre-kitting and forecasting efforts have provided unprecedented insight and inventory accuracy for approximately 90 percent of D&R’s machines. D&R plans to deploy MEI telemetry technology to achieve the same level of service for its remaining machines.
“Having remote access to real-time data will take our operation to the next level,” said Riemann. “Telemetry technology can help us cut more routes, find more ways to be efficient and become even more profitable.”