5 Ways Industrial Vending Can Improve Profitability

What Is Industrial Vending?

Industrial vending solutions are not your average chocolate bar dispensing machines! It’s an organization’s means of finally controlling their tool crib expenses. A tool crib is commonly a stockroom environment that is looked after by a set of employees hired by the organization. The other option is a VMI (vendor managed inventory) program where the vendor/distributor will take control/ownership of the organizations stock levels. In either case, there is a great deal of human error that can/will occur, not to mention the usual overstock of goods to ensure a costly stock out is prevented. Are there more profitable ways of handling and dispensing supplies to your employees? Yes! Industrial vending has surely come a long way; from dispensing batteries via a helix coil machine to providing RFID tagging solutions and dispensing large MRO industrial supplies via various types of machines. So what can an industrial vending solution do for your organization? It’s about time you asked.

5 Simple Ways Industrial Vending Can Improve Profitability

1) Reducing Consumption: An industrial vending solution will allow you to track who within your organization is using what. You will also be able to provide access to only those employees who require the use of certain resources to complete their tasks.

  • Reducing theft, waste and abuse will yield lower operating costs, helping improve the organizations profitability.
  • No need to overstock items by using a min/max purchasing system. With real-time reporting you can have 24/7 access to accurate usage information, allowing you to buy limited stock as you need it.

2) Reduce Spend On New Tools: Industrial vending provides the opportunity to not only pull out supplies, but re-instate product back into the vending machine that can be re-used or re-machined for use at a later date.

3) Reduce Obsolete Inventory & Stock outs: By tagging product with date/lot codes you can eliminate the possibility of carrying obsolete items. At any given point in time the user interface can provide multiple reports advising which items require your attention. AND if you would prefer little to no human interference, than there’s an opportunity for the system to automatically place POs when needed. The extra costs associated to a stock out (last minute freight expenses, production delays, etc…) will be a thing of the past.

4) Reducing/Eliminating the Use of a Tool Crib/Stock Room Environment: Having a stock room that can be accessed via a key card or via an attendant(s) can get quite costly. An industrial vending solution will provide aid in the following ways:

  • Allow your tool crib attendants to work on more profitable projects
  • Allow employees to have restricted access to resources 24/7
  • Increased floor space (a vending machine will require less floor space)
  • Vending machines are mobile and can be placed in multiple strategic areas, reducing walking & waiting time for employees.

5) IT Infrastructure/Technology: The vast amount of reporting capabilities are simply amazing! We discussed above the topic of trace-ability and reducing theft and/or waste within your organization. This type of reporting is simply a starting point; you can also allocate the expense of certain items to job numbers, providing you with an accurate total cost for a project/job. The technology available, such as RFID tagging, brings industrial vending to a new level of efficiency.

Choosing The Right Tool For The Job

How do you go about choosing the right solution? The good news is that you’re not alone; your industrial distributor can help answer many of the concerns and questions you may have. When choosing the right industrial vending supplier and distributor, it’s important to be aware of what your goals are and how your needs will evolve in the near future. A standard solution is rarely provided, because every organization’s needs differ from one another. I mention both vending supplier and distributor because the right team will make the difference in helping you achieve maximum savings.

Costs/Initial Investment

The cost for an industrial vending solution will vary depending on your needs, a mixture between the type of vending machine and technology required to meet your cost reduction goals. When looking for a solution you will find that distributors, those that provide VMI solutions, package it in various ways. The common packages I have come across are; straight out purchase of the vending machine, different financing options and providing the unit “free” of charge. Please note that nothing is free… I say free because some distributors give away a unit in return for a certain amount of monthly purchases. Note: depending on the distributor and vending machine, a standard free unit with limited custom capabilities can come at a great expense. Such expenses will be; limited savings, high implementation costs (than the cost of switching to a better solution), and time lost where you could be reducing your operating costs etc… If the goal is to reduce your spend why get a standard unit that will partially reduce your organizations spend? Paying for a VMI solution that will mold to your needs and help you drastically reduce your organizations spend will provide a greater return (the cost savings will more than finance the unit, making the ROI timeframe as little as 12 months). The idea of being tied to a contract that requires a certain amount of spend also sounds counter intuitive, as the goal is to reduce your spend and improve your efficiency. Although, depending on the size of your organization such goals most often can be easily attained.

Conclusion

The above is only a brief snippet of what industrial vending can do for your organization. Yes it can yield fairly quick (12 month ROI) and large ROIs (20-40% savings), although it’s important to note that it is still not the only solution available to you. Depending on the size of your company it may be efficient to have a small stockroom with an open door policy, but it is still important to be aware that there are solutions out there for when you do grow and require a more robust solution. When looking at such a solution it is important to set realistic goals and ask for a trial period. Record your success and/or failure and move forward.

Whether it’s the first time you’re reading about industrial vending or a veteran on the topic, feel free to share any questions/concerns you may have. AND if you have any experiences using an industrial vending solution, tell us about it!

If you are interested in learning more about industrial vending and the various VMI solutions available to you, I have include a few sources below.

Autocrib - A leading manufacturer of industrial vending solutions

Tenaquip - A leading distributor of vendor managed inventory (VMI) solutions