Ten years ago, the first pioneering vending operators implemented new operational models that included pre-kitted delivery routes. In the last few years, many have also implemented dynamic scheduling on top of pre-kitting. The benefits have been proven:
1. Pre-kitting allows drivers to be 25 percent more efficient. Or said another way — operators that implement pre-kitting can take one out of every four trucks off the road.
2. Dynamic scheduling allows even greater efficiencies beyond pre-kitting, allowing drivers and operators to be at least another 20 percent efficient.
When a company goes from using no technology to implementing pre-kitting and dynamic scheduling, often four to five out of every 10 routes can be consolidated.
The old versus the new
Under the old route model, routes do not have handhelds, do not capture product level tracking, are not pre-kitted and are not dynamically scheduled. The warehouse manager/purchaser typically purchases products to fill the warehouse.
Drivers requisition products and/or pull products as needed on a daily basis to refill their trucks. Drivers use route cards for tracking inventory and cash accountability for each service. Service schedules are fixed, with each machine scheduled for service by day of the week or every so many business days.
Under the new route model, routes utilize handheld computers, capture product level data, are pre-kitted and may be dynamically scheduled, especially when wireless data is available. Trucks can be loaded for the drivers in the warehouse.
This article will examine how the roles of general manager, supervisor, warehouse/purchasing manager and route driver change under the new route model.
General manager role, old and new
In the old model, the general manager (GM) relied heavily on the basic key result indicators to determine performance and profitability. Route averages, machine per service averages and profit and loss (PNL) averages did not provide a true valuation of the inventory.
The GM had very little data to guide him as to what the root causes may be and on how to improve areas of low performance. Many companies used commission-based driver compensation to motivate drivers to improve performance and/or manage the driver’s compensation as a percentage of sales.
The new model focuses heavily on capitalizing on the available technologies. In essence, it is a game changer for the GM role. The new GM uses a data analysis and process driven approach. With the use of handheld computers and/or wireless collecting DEX data, the GM must take a data integrity champion role from day one. The typical manager will spend more time on processes to make the data collection more efficient and accurate than ever before.
Most business decisions will be based on the statistical data provided by the respective system. If the new GM is successful at managing the efficiency and accuracy of the data collection, they will reap great rewards. If mismanaged, the incorrect data will affect all areas of key performance indicators (KPIs) and, most importantly, customer service and retention. It can have a negative financial impact if the GM does not know the new system and manages data ineffectively.
The upside is that when properly managed and implemented, the new model becomes a very empowering experience for the GM. With the collection of item-level tracking, the GM can gather detailed DEX cash accountability and warehouse inventory transactions. The GM can now dive into the data to effectively manage the KPIs and the PNL.
With the vast amount of data to manage, the role requires a more analytical skill set than before. Someone who can read and understand various formats of data either directly obtainable from the system or exportable to spreadsheets will succeed. Think of it like a doctor reading a pulse of a body. If you can understand it and the data is clean, the GM will have the pulse of the business at his fingertips.