I am often asked if route handheld computers are really necessary for companies that are looking at telemetry solutions that can offer pre-kitting. It is a fair question, because in theory, once a system is set up with accurate inventory levels, telemetry alone should be able to monitor activity and tell the drivers what to bring.
In practice, however, handhelds are still needed because vending is not an exact science, and handhelds allow the driver to collect additional information in the field. They also serve as a backup option to provide DEX data to your vending management software (VMS) if the telemetry system fails.
Besides managing product inventory, the handheld allows the driver to record refunds, coin tubes fills, recycler fills, and spoiled product. If inventory levels are not correct (this can happen for a variety of reasons including VMS failures), the handheld will identify this and allow the driver to quickly make corrections.
Finally, the handheld allows a driver to make a product change by scanning a new product as needed because the inventory is not on the truck. If you are not using a handheld, this information can be recorded on paper and later entered into the system, but in practice, it often isn’t.
Keep in mind there are other uses for the handheld besides filling vending machines — many vending operators also do OCS deliveries with invoicing and delivery confirmation supported by the same handheld. And for operators that are not pre-kitting routes, the handheld is used for driver check-in/check-out procedures and truck inventory transactions.
More vending operators are facing challenges in deciding how to employ technology. Some are diving in and adopting software systems and/or remote monitoring with handhelds that use machine specific planograms to track item level sales in vending machines.
Tracking sales at item level is the first step to utilizing cost saving technologies such as pre-kitting and dynamic scheduling. Using a DEX handheld that tracks at the item level gets you into the cost saving game.
This article is designed to help operators planning on deploying handhelds, and also deals with the challenges involved in moving to item-level tracking.
Item-level tracking provides enormous benefits to your bottom line by enabling:
Pre-kitting — Defined as packing bins in the warehouse for each machine. Companies can consolidate 25 percent of their routes by implementing this.
Dynamic Scheduling — When software tells you when to visit a machine instead of on a regular schedule. Companies can consolidate another 20 percent of routes on top of pre-kitting.
Merchandising — Using computer tools to optimize product mix or space to sales. Companies initially looked at merchandising to increase same machine sales, however, when used in conjunction with dynamic scheduling, service intervals can often lengthen 50 to 100 percent by doubling up on the best sellers.
Vending operators seem to be taking two different approaches to get into item-level tracking.
They are rolling out handhelds as an extension of their VMS as an upgrade to their existing system, or as part of a change to a new system.
They are trying item-level tracking on a few machines that are being monitored by wireless solutions.
Both approaches are valid and may work for operators of different sizes. A small operator can start monitoring a few machines on wireless and use the tools provided by the wireless provider to prove the value proposition (knowing when to service a machine and what to bring).
Larger companies typically cannot manage a few machines or routes on wireless unless the system is integrated into their existing VMS, but they can often migrate a few routes at a time onto item level tracking with handhelds.
Regardless of the size of your company and the approach you take, one of the most important choices is in choosing the initial route and driver that will use the new system. The driver you choose should be an honest and technology adept. He should also be well respected by the other drivers because he can influence them.
If you are moving from a loose cash accountability system based on products versus cash, the challenge may be larger. By taking DEX readings with a handheld at every service, you can bring cash accountability completely under control. If drivers have been able to take liberties with your cash collections, some will immediately know that the game is over and will look for other employment.
Most operators are moving from a system of tracking at the category level and need to accurately collect planograms at each machine before implementing handhelds or wireless monitoring. There are many successful ways to do this, but the most unsuccessful is sending out the driver with a new handheld and asking him to collect the planogram information with a new handheld.
No matter what method you choose, do not put the burden on the initial driver. Send a route supervisor or temporary help along with the driver to record the planograms and pricing in each machine. The ride-along person’s responsibility is to capture product, price, and inventory levels while the driver just does his job.
Here are the ways you can collect the planograms and price information at a driver’s machines:
Best Method: If your technology provider provides a mobile handheld solution that can configure machines, use it. The best ones can read DEX from a machine and set up the planogram. The supervisor needs to scan the products in each column and set prices. Figure A on page 34 shows a handheld’s machine administration screen that a supervisor can use to capture the information.
Second Best Method — Give your supervisor a laptop computer with an air card with access to your software solution. Then he can manually edit the planogram at the machine in the software while riding along with the driver. Figure B shows planogram editing for the same machine as shown in Figure A.
The last solution I recommend is sending out the supervisor with a written template that he can fill in that can be entered into the software system back at the office. This works, but I recommend it as the last solution because the information needs to be keyed into the software immediately. Many times, the data entry lags, and the driver arrives at the machine to do a service and the information is out of date when the driver returns.
Your goal is to make the initial service as easy as possible for the driver, so you should have the route supervisor or ride-along person to collect this data as accurately as possible right before the driver services the machine for the first time. If you collect the data a few weeks before the first service, the planogram may be out of date, causing the driver to have to make many product changes and waste time during the first service.
If drivers are paid hourly, they will have no incentive to make any new time saving system successful. If you position the handhelds as a time saving tool that can help them earn more money, the honest drivers will be on your side and will work with you to make the program a success.
Find ways to motivate drivers
There are other things you can do to help get the drivers on your side. One operator offered a $200 bonus to each driver to be paid once the driver’s route was fully functioning on reading DEX from all of the machines. This gave the drivers the incentive to accurately communicate DEX issues to the service personnel so they could quickly address them.
Another operator was trying to get his driver’s truck inventories to less than 1 percent shrinkage per two weeks — the truck inventory will only be accurate if the handheld data collected from the machine is accurate. The operator instituted a rule that if the driver met this goal, he only had to inventory his truck every two weeks, but those that didn’t had to do weekly or even daily truck inventories until the problem was corrected. Because inventorying the trucks was time off the route and earning commissions on a Friday afternoon, most drivers worked to make sure the data was accurate.
In a previous article, I presented a financial model for companies deploying both software and telemetry that demonstrated a 40 percent reduction in routes and increased sales. You cannot get any of these results without first moving to item-level tracking, and utilizing a DEX-based handheld solution is the most cost effective way to get there.