Inventory Forecasting Saves Time on the Route and Can Boost Sales

Most route drivers welcome tools and techniques that improve their productivity. Higher productivity enables drivers to make the same amount of money in less time or, if they are paid on commission, more money in the same amount of time. Fortunately, techniques exist that enable drivers to do this, with and without new technology.

A central component of improving route productivity is to reduce the amount of inventory on the truck. There are two basic ways to accomplish this without running out of products: 1) Carry fewer individual products (known as SKUs), and 2) Load the truck with less of each SKU.

Another technique is to make only one trip from the truck to the machine. This can be done by eliminating the "counting" or "correction" trip. We will consider these and other time savings options in this article.

If you are like most drivers, you either load your own truck, or order what needs to be loaded by filling out a sheet a few days in advance, or "calling in the order." The challenge is to keep track of what accounts you are visiting the next day and order the appropriate products. The safest thing to do is often to load extra product so you won't run out.

The problem many drivers have is they leave the warehouse every morning with two to three times the amount of product they will need that day. In addition to making the job more tedious because of fumbling around in the back of the truck, the excess product guarantees that they will end up with more damaged and spoiled product at the end of the day. And finally, if the company keeps a running truck inventory, the entire inventory process takes longer when more products are involved.

Consider ways to reduce truck inventory
How can you reduce the amount of truck inventory? There are several ways.

If your company uses some sort of planogram, stick to it. Obviously, some accounts are going to require special products, but generally, drivers can reduce the number of different SKUs being loaded on the truck without compromising customer needs by sticking to the company planogram.

The next step is to figure out how much of each product to load on the truck. Without technology, the easiest way to "forecast" the amount of products is to keep a route book (or log) that has a past history of product sold (or filled) in each machine.

The route logs enable the driver to estimate how much product will be needed the next day. Some drivers keep a route log for the entire route and do not break it down for each machine. While not as accurate, this is easier to do and often requires less time.

The terms "prepacking" or "prekitting" in vending refer to a process whereby drivers service machines with pre-packed, stackable bins that have been prepared for them in the warehouse. There are several benefits of prepacking:

  • You only make one trip to each machine.
  • There is no "truck inventory" to deal with, just pre-packed bins for each machine. As a result, you spend no time gathering up product once you stop the truck.
  • Trucks generally leave full and return empty, minimizing any inventory issues.

For companies that prepack, the trick is to figure out what each machine needs before it is serviced. Drivers who are not using handhelds and software usually do this by filling out a "pack sheet" for the next service visit while they are servicing the machine. This way, they can analyze usage patterns and know what products are selling in the machine while they are at the machine.

When utilizing a prepacking system, the driver will not necessarily fill every column completely.

Prepacking saves time
Even when a company is not pre-packing in the warehouse, smart drivers essentially prepack off the back of their trucks in an effort to only make one trip to each machine or bank. Being familiar with what is selling at your machines, using standard planograms, and minimizing SKUs makes this process a lot easier.

Software designed to reduce inventory is used in most route-based businesses. "Just-in-time" inventory managment software systems utilize a variety of forecasting methods to reduce the amount of excess inventory carried in all stages of the process.

For vending operations, a technology solution involving a handheld computer and a back--end system that manages the truck's inventory can work together to speed up the process of truck loading or prepacking.

How technology assists the process
The technology can help in two ways:

  1. A DEX capable handheld can download all the sales data from a machine in five to 15 seconds. This eliminates the time needed to "count down" a machine.
  2. A forecasting system can be used in all stages of the process; helping load the trucks, and providing the information needed to prepack at the warehouse or off the back of the truck.

Here's how it works:
The handheld keeps track of each machine planogram. In other words, it "knows" what is being sold out of each column of each machine. It also "knows" the par, capacity, price and average daily sales for each column or slot.

A DEX handheld uses the planogram and the item level sales information together to determine how much product has sold out of each column, and how much is needed to fill it back up.

The software uses the average daily sales for each column in each machine to forecast what is needed to be loaded on the truck and what needs to be brought to each machine.

If you are using a software system to forecast what needs to be loaded on the truck each day, the results can be dramatic. In cases where companies are prepacking on the truck and not in the warehouse, the software will "overload" the truck by 10 to 20 percent.

At each stop, the handheld will have a pick list for each machine or bank. The driver can use the pick list to load the cart or effectively prepack off the back of the truck. The combination of less fumbling around and only taking one trip to the machine generally translates into a time savings of 5 to 15 percent over an entire day.

One driver's experience
Total Vending Services, Benecia, Calif., uses a DEX based handheld system and software based forecasting system. They have an "assembly line" style warehouse and they utilize dedicated "packers" to prepack bins for each machine the drivers fill.

Because of the prepacking, driver Jared Clark told me, "I can service an entire snack machine in six to seven minutes, while many drivers take 15 minutes to do the same job." He felt that the prepacking system itself contributed to most of the time savings; the DEX-based handheld saved a minute or two of "counting time."

Since Total Vending Services pre-packs everything, the trucks leave with stacked bins for each machine in the morning and return virtually empty.

Fewer products to carry saves time
Carrying fewer products on the truck and employing some sort of forecasting system can help you become more effective at servicing more machines in the same amount of time. Utilizing forecasting for truck loading will help keep fewer products on the truck and run a more organized route while prepacking off the back of the truck can let you make only one trip to each machine. Together, these are both great time savers.

About the author
Glenn Butler is vice president and chief technology officer at Crane/Streamware. He is the primary architect of the VendMAX and DeliveryMAX software systems.