To tote, or not to tote? That is the first question a vending operation of any size using delivery trucks as rolling warehouses has to answer. Prekitting or prepacking totes/tubs in order to make one trip into a location has some great advantages. It increases revenue per route, allows for lighter vehicles with better fuel economy and isn’t dependent on a lot of technology. But where should operators start and what should they expect? Here’s what the experts say.
When to start prekitting
When McMurray Coin Machines in Fort McMurray, Alberta, Canada, decided to prekit, the company had 13 routes doing traditional curbside picking. “Most of my good drivers were servicing 18 to 20 machines a day,” said Jacques Dube, operations manager. “We decided to add prekitting to improve that.”
Additionally, Dube wanted to get the trucks, which cost $75,000 each, to stop being parked in front of locations and start bringing in more revenue. In four weeks, Dube had each truck doing 30 machines and he dropped down to 10 routes. By adjusting the prekitting parameters, such as increasing depletion rates to 35 percent and having no more than two sold out columns as well as adding dynamic scheduling, he was able to drop two additional trucks while assigning each route 26 to 30 machines. “We service 1,200 vending machines with eight trucks,” he said. Dube is considering adding remote machine monitoring next, which he feels would allow the company to cut an additional truck or extend without adding another route. With his current system, he is making an average of $180 to $220 per visit. “Your efficiencies and profitability go up significantly,” Dube added.
While Dube started prekitting at 13 routes, operators have found success starting much earlier. Six routes is common and sometimes fewer if they aren’t adding warehouse costs. Since every vending operation is different, there is a little math involved in deciding when the time is right.
“Regardless of whether an operator is smaller or larger, there has to be cost versus ROI, a break-even point, that can be clearly seen” said Warren Philips, president of Validata Computer & Research Corp.
Operators can reduce time and costs by prekitting immediately with relatively low total cost of ownership on the front-end using the proper vending machine planogrammed handhelds and by doing it off the truck, on-site, with the same personnel who are currently being used to service/replenish the machines. “You can still achieve one-trip-in without initially making significant new equipment, personnel and supervision costs in the warehouse…this is walking,” said Philips using a walk, then run analogy for prekitting. Once picking operations have moved to the warehouse, the operator can start “running.”
According to Don Blotner, a former operator now part of the customer success management team for Cantaloupe, tracking and predicting what products will be needed for a machine can create substantial time savings. “It’s 3 to 5 minutes a driver spends in front of a machine that could be better spent,” Blotner said. However, he also warns operators about having economies of scale. “You don’t want to just replace street labor with back-of-house labor,” he added. He’s seen prekitting done from the truck early on, in order to avoid this overhead cost. A driver has a pick ticket for the location and loads up a tote before going in. It’s still one trip and saves time. In fact, Blotner says prekitting typically can help consolidate one route for every four. This servicing model does come with a word of warning, however. It requires accurate data.
“Having poor or inaccurate data ripples through the whole process,” said Blotner. “An inaccurate amount of product means having to deal with product a second time when it comes back to the warehouse or having to go back to a machine sooner because of a short fill.”