Machine pre-kitting, which refers to arranging fill orders for every location in the warehouse, can improve a route's machine service capacity by 25 percent, Lockett said.
He said that on average, routes that employ DEX and machine fill order forecasting return an additional $2,000 weekly, by being able to support an additional 20 machines per route than before DEX automation.
"The size of the trucks is going to decrease," he said, because the average pre-DEX route carries 50 percent more inventory than necessary to serve demand.
He showed a picture of what a "prepack" looks like in a warehouse. It consists of a tote filled with product, labeled for the appropriate route, that the driver simply picks up in the morning and places in his or her truck.
By improving location sales, an operation also increases the route driver's compensation if the driver is paid based on sales. Lockett said a driver who makes $40,000 per year instead of $35,000 is always less likely to leave and find another job.
Hence, the benefits of improved route efficiency also pay dividends in improved route driver retention.
There is still another labor related benefit associated with DEX, Lockett noted. He said that when a company uses DEX technology to prekit its deliveries, it is easier to teach a new driver how to do his job. He said a driver can be trained in half the time compared to the traditional route service model.
Cashless oftentimes includes remote monitoring
Lockett also noted the benefits of cashless card readers. He said the current card readers that authorize credit purchases via telemetry also provide the location with the added benefit of remote machine monitoring.
If a machine has a credit card reader that authorizes purchases by transmitting data to an authorizing party, the machine's DEX can also be transmitted to the operator's system, so it can be used to more accurately forecast demand in high traffic locations. These high traffic locations are usually the better candidates for cashless devices.
Introducing DEX in a vending business requires an education process, Lockett said. "Without the time, people and money to do it, don't do it," he said. "To properly embrace DEX requires complete focus and commitment from the top down. Take your time and don't rush the embrace, and you will succeed."
Introducing DEX: an 8-step plan
Lockett offered the following 8-step plan for introducing DEX to a vending operation.
1) Install handhelds first in the warehouse. "Put one in the warehouse first," he said. "It gives you that item level perspective" that serves as the foundation for the routes.
2) Introduce DEX cash audit before using the handhelds to retrieve column sales data. This will yield the immediate benefit of automatic cash accountability of the machines. It will also allow the reporting to become consistent, so it can then be used to support product demand and forecasting.
3) Develop machine planograms. By deciding what products should go in the machine facings, management controls what products the driver takes from the warehouse to the location. "The age of the driver has nothing to do with his ability to embrace it (the planogram)," Lockett said. "Once he realizes how much easier it makes his life, everything will begin to work, because without his 'buy-in,' we've learned nothing works."
4) Introduce DEX handhelds to the routes beginning with the best driver, then do the worst driver. Everyone in between will then see that it can work for them, too.
5) Introduce DEX handhelds to the other routes at a rate of one every two weeks for every route supervisor. It will take two weeks for a route to expand from DEX cash audit to "full" DEX.
6) Once all of the routes are using DEX handhelds, install dynamic scheduling.
7) Once dynamic scheduling is in place, introduce remote machine monitoring and/or a cashless card reader, to a site where purchase demand is unpredictable, such as airports, parks, universities and high traffic public locations. "It's a wireless world," Lockett said, looking to the future. "We'll see a day soon where wireless machine readings can be harvested for free, using Wi-Fi (wireless local area networks) public networks."