Skip to main content Skip to Footer

LATEST THINKING


How vending solutions can drive industrial savings

Vending machines have long offered benefits for individual consumers and suppliers. Similar solutions are increasingly being applied in industrial settings.

OVERVIEW

Self-service, on-demand availability, low risk of product loss or damage, easy inventory management… the old-fashioned vending machine offers something for everyone involved.

More and more, major distributors and industrial suppliers offer vending-style solutions. The same goes for third-party providers who tailor their offerings and equipment options to meet the specific needs of nearly any type of customer

We have seen increased interest from our clients in vending solutions that assist in demand management, improve process efficiency and reduce waste and loss. Lower-value, consumable items, such as safety equipment and tools, are just one example.

Industrial organizations should examine how vending solutions can contribute value and reduce costs in maintenance, repair and overhaul (MRO) and related areas.

Real-time Demand Management

Vending solutions include secure reporting software and are accessible anywhere, anytime via a web portal.

Organizations gain the ability to track exactly what products are in inventory, usage patterns at the employee or shift level, and improved inventory visibility across multiple locations. Benefits include

  • Consumption is often reduced 10 percent to 30 percent because of the “Big Brother” effect; when employees know that their usage can be tracked, they tend to only take what they actually need

  • Complements any existing consignment or vendor managed inventory (VMI) programs by providing visibility into who, what, where, when, and how VMI product is being consumed.

  • Easy-access improves compliance to corporate procurement objectives (preferred manufacturers, suppliers, etc.).

Location, Location, Location

Vending can help organizations eliminate process waste and seek LEAN process efficiency targets:

  • Machines can be located near the point of consumption to allow employees to spend more time on the job and less time traveling to and from store rooms.

  • Product or supply availability near the point of consumption means fewer inventory touches.

  • Vending machines may be located in unsupervised locations, while keeping product secure at all times, reducing the risk of theft, loss, damage, or over-consumption.

Automation

  • Product can be automatically ordered and replenished at predetermined thresholds

  • Reduces carrying costs: less inventory on-hand, fewer purchase orders issued

  • Eliminates out-of-stock situations because the vendor can be automatically notified before inventory reaches critically low levels (Most suppliers will keep back-up inventory in stock locally for immediate delivery in rush situations).

In addition to issuing consumable product, vending solutions can be utilized for the check-out and return of reusable items like power-tools or fall protection equipment.

Industrial Vending Program Types

Industrial vending programs typically fall under one of two categories:

  • Supplier-managed solutions - Allow organizations to partner with their preferred vendor of choice. Today nearly every major industrial distributor offers a vending solution with equipment provided, installed, maintained and replenished by local representatives. Most suppliers provide this service at a nominal cost in exchange for commitments on spend levels, time period, or product volume.

  • Supplier-agnostic solutions - Allow organizations to partner directly with vending solutions providers. The cost of a supplier-agnostic solution is typically structured in one of three ways: outright purchase of the equipment, lease, or lease to own. Leasing is the most widely used model because it provides a buying organization with access to the latest technology and equipment, however, the best solution depends on the specific requirements and priorities of the buying organization.

INSERT TITLE

"Regardless of which solution you select, the low-cost, highly flexible nature of modern vending programs allows youto lower costs, reduce consumption,and closely monitor usage of your MRO supplies."

INSERT AUTHOR NAME


NEXT STEPS

As adoption of vending solutions grows, now is a good time to evaluate whether a vending solution makes sense. As a starting point we recommend the following:

  1. Examine your industrial supplies consumption data to identify whether there is a critical mass of product that fits the consumption, frequency and cost profile that suits a vending solution;

  2. Understand the change management implications of a potential vending solution as well as the benefits that extend beyond hard-dollar savings; .

  3. Construct an initial business case, and identify pilot opportunities or potential supplier partners to trial a vending solution.


Authors

Cole Esposito

Cole Esposito

Email LinkedIn

Bryan Cvitanov

Bryan Cvitanov

Email LinkedIn

Mark Hillman

Mark Hillman

Email LinkedIn
SUGGESTED CONTENT