Technology Roadmap: Operators Recount Their Journeys At The NAMA OneShow

NAMA-OneShow-RecountTechnology has largely rejuvenated the vending industry, but for many operators, making the leap to using it is one of the hardest tasks they ever face. The cost is high, the transition is often lengthy, and a lot of preparation and reorganization is often required.

A panel at the recent National Automatic Merchandising Association (NAMA) OneShow at the Venetian in Las Vegas gave attendees a chance to hear from four operators who went through the process. The operators described their journeys, including the hard decisions they made, the cost expended and the benefits they received.

The operators encountered similar challenges, a key one being deciding which technology provider to partner with. While each of the four selected a different provider, all agreed the partnership was critical to successfully adopting technology, and that the journey was worth the investment.

The session, titled “Optimize your business with a technology roadmap,” was moderated by Dr. Michael Kasavana, NAMA endowed professor emeritus.

Zachary Oliver, CEO of Dependable Vending, Upland, Calif., said his company operated 1,200 machines with 18 routes when they decided in 2013 they needed to invest in technology.

The company spent two years evaluating different software options and upgrading machines to be DEX capable.

“This is not a quick transition,” Oliver said. “It does take time.”

The company chose Parlevel Systems, and in 2015 they began installing Parlevel telemetry devices in their machines. It took six months to launch the technology.

Ironing Out The Kinks

Once telemetry was installed, the team needed to iron out reporting errors in the DEX stream.

Training the route drivers to use DEX was a big task. Fortunately, Parlevel gave good support.

Four months ago, they began pre-kitting. It took four weeks to pre-kit all the routes. Pre-kitting has allowed the business to remove $2,000 in extra product per truck, delivering a $36,000 savings. Oliver expects they will be able to move to a smaller truck.

“When you’re pre-kitting, you don’t have as much inventory on the truck,” he said.

The technology has enabled the company to grow faster.

They were able to condense 18 routes to 15 and a half, although they have since added a route due to growth.

He estimated they saved 5 percent in reduced product spoilage annually.

The total investment was $285,000. This included $200,000 for the software, $15,000 for labor, $50,000 for
boards and parts and $20,000 for totes and racks.

One benefit that is hard to quantify is the ease of teaching new employees how to do their jobs. “Training efficiency is huge,” he said.

The Right Personnel Is Needed

Megan O'NeilDaniels Vending LLC in Trappe, Md. was not able to leverage technology when the company invested in its first system, said Megan O’Neil, general manager. This was because they did not have the personnel on staff that was capable of managing it.

O’Neil made it her mission to make sure the company found the right partner to provide the necessary support to deploy technology. The company’s main reason for investing in technology was to improve route accountability.

The company ultimately decided to work with Cantaloupe Systems based on its customer support. An important action the Cantaloupe team took at the outset was to do a return-on-investment analysis.

Technology Upgrades In Stages

Installing telemetry in the machines took one month for each of the Daniels Vending’s four routes. Once this was done, they deployed pre-picking. The result has been a 30 percent increase in sales per route and 10 percent more fills per visit.

“Now we know how many Snickers we have in each machine,” O’Neil said.

One driver position has been eliminated, while a picker has been added.

Shrink has been eliminated and spoilage has been nearly eliminated. There has been a 2 percent profit gain.
“The efficiency is amazing,” O’Neil said.

The company has also more than tripled its cashless readers.
Besides making the company more efficient, the technology has helped with sales. Where the route drivers use iPods, the sales people use iPads – to show reports to customers.

“It has transformed our business in every aspect,” O’Neil said.

Connectivity Requires Reliable Signals

Mark Houseknecht, vice president, Crickler Vending Company, Rochester, N.Y., talked about the connectivity challenge that companies sometimes face when installing telemetry. The company had serious connectivity problems with its micro markets.

The company now uses OptConnect’s managed wireless service to control connectivity. It also uses Tech 2 Success cloud services.

Houseknecht said the vending business has become more challenging because of all of the different software systems available. “It’s becoming more difficult because there are too many options out there,” he said. “Everything needs to integrate.”

Define Business Goals

Chris Molinar, IT director, Accent Food Services, Pflugerville, Texas, acknowledged that the challenge operators face with technology can’t be taken lightly. He said the knowledge requirements for a vending operation are much different than they used to be.

Operators must first clearly define their business goals. This includes deciding what type of user interface you want for employees. It is also important to consider total cost of ownership.

Once this is done, engage in research. This includes talking to peers and tapping advice from consultants. “Hire a third party consultant,” Molinar said. “It’s always great to have an outside pair of eyes.”

“Evaluate multiple vendors,” he said. “Make sure they fit your business model and your business strategy.”

Molinar said the technology partner should be listed in Gartner’s Magic Quadrant, a “gold standard” for technology companies.

Next, consider what impact the change will have on the employees and the customers. “Buy in is critical for success,” he said.

Once the technology is deployed successfully, data integrity will improve, which will make a big difference. Employees will be able to focus more on their assigned roles rather than on worrying about data.

Stumbling blocks include having unclear measure of success or not having employee buy in. The company needs to be ready to update its training model if necessary.

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