"Establish checks and balances to monitor that these procedures and processes are being followed and, most importantly, create consequences when they are not," he said.
Bill Lockett, vice president of sales at InOne Technology, agreed the operator must designate someone with project leader responsibilities when installing a new system. This person would ideally be well versed in the current process and fully understand the owner's vision and the goals for the new system.
Lockett said the need for a full-time collections person and a full-time inventory manager usually occurs when the company reaches five routes.
Procedures must be followed
"Do not attempt to control a warehouse unless you have someone responsible and available to enforce the warehouse management process," Lockett said. He suggested operators first consider inventory control, beginning with the warehouse. Inventory bought should be measured against what comes back from the trucks.
Using a bar code scanner, the warehouse manager tracks all deliveries from suppliers and all returns from the trucks. When the warehouse reconciliation is within a minimum of 5 percent of actual ending count, the operator is ready to begin focusing on truck inventories. A 5 percent or less variance to actual ending count is also a reasonable truck reconciliation goal.
Step two: measure route inventory
Once the operation is managing its warehouse inventory, the next step is to measure route inventory. This can be done one route at a time.
Lockett said the drivers need to record and report machine fills at every service and beginning inventory by category or item with every collection, as well as meter readings.
A company that is not already doing this needs to do it as a first step before introducing DEX handhelds. "Begin item level management on the can and bottle machines, which gets the driver to start thinking about item level reporting," he said.
With this data, the operator can monitor his sales-to- service ratios, which is sales for a period divided by the number of services. The target for can and bottle machines is 40 percent of inventory at retail, while snack is 30 percent of retail value.
The collection and inventory management system is now in place to introduce DEX reporting, Lockett said. This will enable the driver to eliminate manually recorded meter readings and automatically record product sales. The time saved -- between around 15 percent of the driver's machine service time -- will likely allow some routes to be consolidated.
Drivers must follow instructions
For DEX reporting to work, the driver must follow the machine planogram, because if Doritos isn't in A-1 and the handheld thinks it's Ruffles Ranch, the whole reconciliation process is compromised. DEX automatically records the column sales in the handheld, but to be accurate, the handheld must remain in sync with what's actually in the machine.
The DEX handheld does not automatically record the column sales, because the driver does not have time to scan each product as he fills the machine.
RFID, when and if it comes to vending packages, will allow the inventory of the machine to be highly improved because it can instantly read the inventory level of the machine without opening the door.
A good beginning system, Lockett said, is one that handles warehouse inventory, location commissions and sales taxes.
One of the great things about DEX is that operators can take advantage of the benefits one step at a time. Electronic meter readings via DEX handhelds bring an immediate savings by giving the operator an accurate account of what cash should be returned from each machine. "A driver cannot tamper with that DEX file," said Damien Moroney, director of sales at Crane Streamware.
With more accurate data, the operator can make use of various financial reports to make the operation more efficient.
Moroney said operators have historically looked at software as a record-keeping tool, when in fact it is a business improvement tool. "The best run operations have the best financial tools," said Moroney. "We give them reporting and other tools to help them in that area."