In tight economic times, growing without incurring higher costs is a real challenge. That was just the task Kevin Searcy, operations manager of Golden Brew in Odessa, TX, set for himself during the recession from late 2007 to 2009. It required him to view the business’ practices differently and reevaluate some of the choices the company had made, as well as utilize his computer programing skills to develop a proprietary technology that fully integrated his vending and micro market inventory data and prekitting. The result has been that the company is now celebrating its 40th anniversary with revenue growth of 35 percent over last year. It serves the ever-changing oilfields of West Texas with seven employees, the same number it had in 2007, while increasing revenues, estimated to be more than $2 million by the end of 2018. The secret is the combination of business know-how with today’s technology.
Drawn back into vending
In 1978 Searcy’s grandfather started a coffee business, Golden Brew beverage. He was joined by Searcy’s father, Robert, who eventually took over the business with his wife, Sherri. Searcy grew up working in the business, helping out part-time and watching it become a full-service operation.
In 2005, Robert was diagnosed with Parkinson’s Disease, a nervous system disorder that affects movement. His father’s diagnosis led Searcy back into the business as the family pulled together at a very difficult time. “That sort of forced me to take a more active role in the company so it could still provide a job for family,” said Searcy, who had been away at college studying computer science. The decision turned out to be a good one as Searcy’s technology acumen and computer skills helped grow the company through adding a vending management system (VMS) in 2005 and cashless readers in 2007. In the last several years, however, it has been a proprietary system that creates technology integrations, which has really helped Golden Brew excel and is a source of pride for Searcy.
Creating a proprietary system
While Golden Brew was an early adopter of technology, the challenge of integrating different systems and technology always frustrated Searcy. The DEX data from the vending machines didn’t quite feed well into the warehouse component. Micro markets didn‘t use DEX, which made combining their data with vending difficult. It was out of this frustration that Searcy decided to build his own proprietary system in 2015. He calls it the dynamic transnational inventory (DTI) system.
“It starts with the simple day to day operations,” explained Searcy, “bringing inventory into the warehouse and out of the warehouse to the machines.” When a shipment came into Golden Brew, the warehouse crew had been writing the number of items right on the box, such as 48 X bars. When an order was filled, the number of bars was lowered on the box and transferred to the route.
Even when Golden Brew added VMS and data was collected at the machine level, the solution was still based on a number system, Searcy explains. Machine A had 10 X bars. Machine B had 12 X bars. “With our DTI system, each item instead has an entry created for it,” said Searcy. In effect, the technology considers each bar, or any item, in the warehouse an individual unit with item details, including accompanying date received, sell by date, whether it’s a substitution for another product, machine it’s placed in, etc. “It allows us to track where each item is at any time,” said Searcy.
The advantages to this are that products nearing the end of their shelf life can be moved to other locations before the expiration date. It lowers stales substantially, explains Searcy. He has even created reports based on shelf life. “It will find items with 3 days left throughout the system, so we can move them to avoid stales,” he said.
While to some this might seem more of a nice-to-have feature, Searcy saw it differently. “It was almost a necessity in our area because [area] businesses scales up and down so much,” he said. For the past 3 to 4 years, the company has had local businesses go from employing 4,000 people to less than 100, and then start increasing employee counts again. Searcy explains that part of the fluctuation is the oil fields because the smaller oil companies won’t be mining oil all the time, creating times of heavy refreshment needs for employees and times of nearly no need. Searcy had originally used micro markets to handle these types of accounts as they were the easiest to scale up and down, but micro markets aren’t always the best solution, and he knew it could be better with technology integration. “We wanted a unified system,” he said.
Three years of writing and rewriting code with various technologies has delivered a system that has features other systems don’t. “If we made a substitution for a product and it sold better, this system tells us that,” said Searcy. Other systems he has worked with can take the substitution into account, perhaps provide sales data for an average number of days. However, the systems lack detail.
“We know that this item has June 25th on it,” said Searcy as an example. The advantage is that Golden Brew not only knows if the substitution is selling better or worse, but also exactly when the substituted products are going to go stale so the company can act on the information.
Searcy feels this level of information is important because of the rapid change in vending machines as well as the consumer. “I’ve been in the business for 16 years. In that time, we have gone from mostly closed front stack beverage machines to mostly open front, glass vending machines,” he said. “There are also more flavors in the machines to appeal to the Millennials.” All this added product makes lowering stales and monitoring space to sale imperative.
Working with glasses
An additional element to the DTI system is the use of Google glasses by the route and warehouse personnel. “We have been using the glasses on all routes for the last 3 months,” said Searcy, “testing them for 6 months.” He had to rewrite his DTI software to utilize the glasses, but he considers the trade off well worth it. The glasses can do everything from show an image of the machines’ planogram to ensure quality control.
With “computer vision” the glasses can auto detect empty slots in a vending machine at the end of service, according to Searcy. This is important information to know because there needs to be a reason these slots are empty — wrong product? Someone not doing a good job? In fact, the glasses are used to review driver service stops. “We make a recording of what they are doing, everything they do at all locations, and upload it, compressed, which pares down an entire route into 30 minutes,” Searcy said. Previously, the company did physical location checks, which took 2 to 3 hours.
Another advantage of the glasses is that the display can be shared if needed. “I was out, had my glasses on when a tech called because he had a problem he couldn’t figure out,” said Searcy. “I logged in and could see what he was seeing. We figured it out in minutes.”
Initially the fact that the company could log into the glasses any time, made some of the drivers uncomfortable, Searcy explains. However, Golden Brew set down certain rules of use, including that the login would only be used when drivers were at a machine. “It was a privacy issue,” Searcy explained. “They didn’t want us logging on when they were going to the bathroom, for example.”
The glasses act as GPS for the drivers as well and record when they use the company gas card to refill their vehicles. “We did have some drivers meeting a girlfriend or a wife and abusing the fleet card to fill those personal vehicles,” said Searcy. The glasses recorded that, and Golden Brew was able to deal with the issue.
Better merchandising
The glasses and the DTI system work together to help drivers better merchandise machines. As the driver looks at the machine, the glasses display red and green numbers that tell the driver what to pull back into inventory (which is moved to a later machine on the route automatically or brought back to the warehouse). Sometimes the system will simply have a driver move product from one column to another, based on the quicker turns of specific spirals. “It’s all based on the rules we set up, and how fast everything moves,” said Searcy.
Drivers also make corrections or notes using the glasses if they didn’t have the right product or ran into a problem. It is then all recorded and used by the DTI system.
Glasses in the warehouse
Glasses are also used by two warehouse personnel to stock inventory and pull orders. They use voice commands to speed the process of inventorying, separating products into different regions of the warehouse and adding “best buy” dates. When it’s time to pick orders, the workers prekit using the glasses, which show the number of each item needed. No route is the same two days in a row — it’s all dynamic and created automatically by the DTI system based on driver start time, geographical region and what equipment needs servicing.
Gathering the DEX data
While Golden Brew pushes information out from the DTI system through While Golden Brew pushes information out from the DTI system through Google glasses in the warehouse and on the routes, it gathers information via cellular connections. If the vending machine has a card reader, then Golden Brew utilizes that connection in order to get the DEX data used by the DTI system. About 80 percent of the vending machines Golden Brew services have card readers. On the others, Searcy installs a telemeter Golden Brew created itself to collect DEX data 8 times a day using LTE 4G for a fraction of the cost.
“A cashless unit might cost between $280 to $350, plus a $7 to $9 per month charge for data,” said Searcy. “Our own telemeter costs 75 cents per month to pull data out of it.”
For Searcy, deciding which to place comes down to how much the machine sells. “Covering $9 a month means I have to sell a case of soda to recoup the charge versus 75 cents which is about two cans of pop,” he said.
More for less
Searcy credits the DTI system and glasses for creating higher profits for the company and reducing employee turnover. “Our drivers actually service fewer machines per day,” he said. They also like the hands-free technology of the glasses since it lets them be more efficient at filling and restocking.
The DTI system has also contributed to the company’s bottom line. “We are up 35 percent in revenues compared to last year,” said Searcy. With more integration, he sees an even brighter future for the company his family started 40 years ago. The best part; however, is that he is able to keep his family employed while combining his love of technology and vending.
