Vending management systems (VMS) can help vending operators increase the efficiency of their operations through the fusion of technology into their businesses. According to a case study conducted by Parlevel on vending operations in Arkansas and Texas, operations have shown a 140% increase in route efficiency and a 30% reduction in operating expenses after adopting a VMS. There are many vending management providers out there that promise to help vending operators run their business better, but not all of these companies are created equal. There are positives and negatives to each system, so it is important to find VMS that fits your business .
With the NAMA OneShow in Chicago right around the corner, it is important to be prepared to ask the right questions when shopping for a vending management system. Shundra Johnson, co-owner of Sunshine’s Vending – a family-owned vending operation based out of Los Angeles – attended the 2015 NAMA convention in Las Vegas with one goal in mind: find a vending software solution that could help her effectively manage her business.
Johnson found a vending management provider to help manage her company, and it was initially successful. However as her company grew, Johnson began to have issues with her software. Eventually, it became too much to handle, and Johnson had to start all over again.
Here are 10 questions Johnson wished she had asked the first time she shopped for a VMS:
1. Is the VMS user-friendly?
Vending Management Systems include many robust features, but not all are easy to use. The underlying code of vending technology is built by computer engineers and software developers with extreme tech-savvy. Issues can arise when developers create systems that are too complicated for the end-user. These high tech systems sometimes require an operator or a route driver to undergo significant training to fully utilize their features skillfully and easily.
On the other hand, some vending software services are very easy-to-use and user friendly, but may be overly simplistic and provide only basic features. These unsophisticated systems might not give an operator enough control over their operation and often struggle at managing growth. A system should find the sweet spot between ease-of use and powerful functionality.
“We initially ran our business with Microsoft Office tools,” said Johnson. “As our operation grew, it became too much to manage with this basic software.” Johnson attended NAMA in search for a VMS to help her manage her business. She visited many different vending technology booths and after weighing her options, she decided she needed a system that was the easiest for her to learn.
“We chose a system that was extremely user friendly,” said Johnson. “I was the only one in my company that was really computer literate. We thought it may be too difficult for the other owners to understand the software.” As her company expanded, she quickly outgrew her VMS and needed more features to manage her operation effectively.
After Johnson picked the easiest system, it was only six months before she realized she had made a mistake. Johnson needed a system that wasn’t just user-friendly, but also powerful. “Lucky for us, we realized our mistake early enough to make a change and transition to a different system,” said Johnson.
2. Is the system cloud-based or server-based?
Vending management systems come in two forms: server-based and cloud-based. Server-based systems store data locally on a program or a device. Operators often have to download special computer programs to make a device compatible with a server. Additionally, a device has to be physically connected to a server in order to access the data stored within. The server’s resources are wholly owned by a vending operator and aren’t shared with other companies, so they are beneficial to companies that use huge amounts of data. For example, credit card companies with huge amounts of customer information use servers to store their massive pools of data.
Cloud-based systems are a little different. They back up data on many servers through the internet and can be accessed from virtually anywhere. Dropbox and Google Drive are good example of cloud-based systems. Since your data exists on many different servers, these systems are virtually limitless and rarely need to be upgraded or expanded. According to Rackspace, cloud servers “are a great option for businesses that need to optimize IT performance without the huge costs associated with (server-based systems),” which makes them popular with small and mid-sized businesses.
Server-based systems are more difficult and more expensive to upgrade than their cloud-based counterparts. When expanding data capacity in the cloud, one simply pays more monthly to access more cloud space. With a server, IT experts must physically upgrade and add hard drives to expand their data.
Furthermore, loss of data is a concern in server-based systems. Many of these systems aren’t backed up in many locations. If the server and its backup location malfunctions, all of the data is completely lost. This failure could prove catastrophic for a vending operation that relies on past data to run their business.
Since cloud systems utilize many servers, there is never a risk to completely lose data. One backup location can be compromised, but many backups still remain. Vending operators who choose a cloud-based systems can rest easy knowing their data won’t be erased. If an operation is looking for an affordable, secure, and scalable system, cloud-based systems are the best option.
3.What devices can I use with the VMS?
Vending management providers utilize many different technologies to help operators manage their businesses. Over the years, handhelds have been one of the most common devices used to log data into a VMS. These handhelds let employees scan products and record inventory levels while out in the field. This data can then be physically downloaded to a computer when an employee returns to the warehouse.
Recently, vending technology has evolved and newer devices have emerged. Now, many systems are cloud-based, which means any device with an internet connection is compatible. iPod Touches, iPhones, Samsung tablets, and Android phones can all be used with these systems.
While handhelds and newer devices both grant mobile access to a VMS, they do so in different ways. Smartphones and tablets can remotely deliver data to a management system through the cloud, while information stored on handhelds can not be accessed until a driver downloads the data at the end of his route. Furthermore, handhelds and scanners tend to be bulky and expensive. Handhelds from Motorola, for example, can cost anywhere from $1600-$2000 and can cost up to $400 on repairs alone.
Vending software that is compatible with mobile devices can save operators money, since they can choose from a variety of different devices. A Samsung Galaxy 4, for example, can be found for just over $100. Furthermore, some employees might already have personal smartphones that are compatible with a VMS, which lets an operator avoid buying devices completely. Or, they can provide a monthly stipend to their employees to account for cellular data usage.
Johnson’s new system is cloud-based, which means she can use virtually any device. “We use cell phones, laptops, and tablets to access our vending software,” said Johnson. “Not only can we manage our operation from virtually anywhere and on any device, we saved time on training our employees, since they were already familiar with working on these devices.”
4. How often often do vending management systems “check in” with my machines?
Vending management software utilizes remote monitoring through telemetry hardware to alert operators to machine information like breakdowns, bill jams, coin jams, inventory levels, money to be collected, and more. Remote monitoring lets operators track machine status without the need to physically visit the machine.
VMS companies track machine information through DEX or MDB data. Systems that utilize DEX data will “check in” with a machine at pre-set times. MDB data doesn’t “check in” like DEX, but instead sends machine information with every transaction. With MDB, a machine that experiences zero sales is indistinguishable from a machine that is broken down, since neither situation triggers MDB data to be sent to a management system. As a result, DEX data will relay more machine breakdown data like compressor issues or if a machine door was opened when it was not planned for service.
Going a step further, different hardware companies offer different “check in” frequencies with DEX data. For example, one company can offer DEX communications twice a day, while another can offer it 4 times a day. The more DEX communications per day, the better off an operator is. Frequent system “check ins” help an operator spot critical machine malfunctions more quickly.
When Johnson made the move to a different VMS, she made sure her machines communicated with the system very frequently. “We wanted as much machine communication as possible, so we could know ahead of time if there was a problem with a machine,” said Johnson. “This would enable us to go service the machine as soon as there was an issue, and we could keep accounts happy and avoid missing out on sales.”
5. Will the VMS work with different aspects of my business?
As the vending industry continues to grow, many vending operators are involved in more than just vending. In particular, micro-markets and Office Coffee Services (OCS) are a growing part of the vending industry. According to a study done by Coca-Cola, there are projected to be over 35,000 micro-markets by 2020.
Vending software is often built to work only with traditional vending businesses. For operations that strictly pursue vending, these systems work just fine. Other vending management platforms can additionally manage OCS or micro-markets, but may require the purchase of additional software or add-ons. In addition, some platforms exclusively manage only OCS or micro-markets.
It is imperative that a vending operator chooses a system that will help them manage many different aspects of their business. Instead of using one company for vending, one for coffee, another for micro-markets, and yet another for telemetry, an operator can streamline their operations by choosing one company that can handle it all.
“We can effectively manage our different business operations with the same company,” said Johnson. “We’re aware of the profitability of micro-markets and OCS, and we have the option to implement them with vending under the same software if we wanted to.”
6. Will a VMS provider work with a company my size?
Vending operations come in all sizes, however, there are significantly fewer smaller operators today than 20 years ago. According to Vending Market Watch, 81.3% of operations could be considered small in 1995. In 2015, small operations only comprise 51% of the industry.
Large companies benefit greatly from vending management providers. These bigger businesses tend to have more routes, higher transportation costs, increased inventory costs, and a larger overall overhead than their smaller counterparts. A VMS can reduce these costs by streamlining operations, which can help larger operations significantly increase their bottom line. One large operator based out of Houston experienced a substantial 25% reduction in operating expenses after adopting vending software.
Vending management systems don’t only help large operations. In fact, these systems can work wonders for smaller companies as well. Vending Market Watch reports that the “dollar percentage of sales has gotten better for all size operators with the exception of extra-large.” Vending Market Watch theorizes that “vending management systems and telemetry are playing a role here.”
Still, some vending software companies won’t pay attention to vending operations that they deem “too small,” while other providers simply aren’t equipped to handle an operation that is “too big.”
“The system we used initially was not prepared to handle our business as we grew,” said Johnson. “We were not a huge company, but we still needed software that would handle our growth.”
Johnson looked for a VMS that could manage their operation far into the future. “We needed software that could both handle the size of our operation and allow us to grow if we wanted to,” said Johnson.
7. Do they offer a mobile app?
As previously mentioned, cloud-based systems can be accessed from virtually any device through the web browser. However, not all vending software systems are easily viewable on the smaller displays of smartphones and tablets. Data and information can be squeezed and compressed until it is too difficult to use on smaller devices. Operators out in the field might not be able to accurately see necessary information, which can prove problematic.
Vending technology providers can solve this problem by providing mobile apps that optimize their software for smaller screens. Mobile apps are made with smaller devices in mind, so they can help operators that want to use the system out in the field.
“Vending is an on-the-go operation,” said Johnson. “Technicians in the field need to be able access their information easily while on their routes. A tool like this is truly indispensable for our route drivers.”
8. How will I transition into the system?
Once we get into a habit, it can be hard to break, and getting into a new routine can be even more difficult. Research shows that, on average, it takes more than two months before a new behavior becomes automatic. For most operators, running their business has become routine, and implementing a vending management system is a big change; machines need to be integrated into the system, inventory has to be accounted for, and employees need to be trained to use the system effectively. Vending technology companies have a responsibility to make the habit forming transition as easy as possible for operators.
Instead of trying to fit an operator into their system, VMS providers should fit their system to an operator. For example, if there is an aspect of a vending business that isn’t supported by the system, a company should work to integrate it.
“Our drivers only service machines and don’t collect money from them,” said Johnson. “This method wasn’t compatible with our first provider. With our new system, we got with their technical team and told them of how we ran our business. Within months, they made a feature that let us define our routes exactly how we wanted them solely because of our recommendation.”
9. How will I learn to effectively use the system?
No matter how technologically capable or advanced, a system is only as effective as the person using it. If an operator wants to truly get the most out of their system, they need to learn how to use it, and there’s no better source than the company providing the VMS.
Vending technology companies may provide manuals or training videos to help operators learn the technology. However, not everyone learns in the same way. “We had little to no training with our first system,” said Johnson.
Operators should be taught how to use the system through a platform that works best for them. Whether through phone calls, web chat, emails, or video calls, users need different options to learn the software effectively, expertly, and easily.
“With our new system, I went through training so I could better use the software,” said Johnson. “I could choose whichever method worked best for me, so we did it over the phone and online. The staff was so willing to help. It didn’t matter how often I had questions, they always made sure I was readily equipped to use the software.”
10. Do I have access to customer support if I need it?
Once an operator is trained to use the software, access to customer support is integral for success. Many VMS companies are constantly adding new features or functionality, and an operator needs to stay on top of these changes.
Unfortunately, not all companies provide adequate customer support. They either halt the support after a certain period of time, or charge operators a fee to access these services. “It was too hard to reach customer service with our first company,” said Johnson. “They had very limited hours, and we couldn’t get in contact with their representatives.”
After her negative experience, Johnson made sure comprehensive customer support was on the top of her list.
“Our new system’s support team always answers our phone calls,” said Johnson. “If we get stuck, they always answer our questions right away. I’ve been up at 3 o’clock in the morning my time, and I still get a response. I’ve done it on New Years Eve, and I was getting responses right away. That is huge being able to have customer service because no system is going to be perfect. There are going to be kinks. This is technology, and things are going to happen. We expect that. But it’s amazing that we have a 24 hour window to speak with somebody at any given time about anything and 99 times out of 100 you get results right away and 100% of the time it gets resolved. So we are very very pleased with our current VMS. Very very pleased.
About Sunshine’s Vending:
Sunshine’s Vending is a family-owned vending operation that has been servicing the Los Angeles area for over seven years. Reliability and an enduring focus on customer service have helped Sunshine’s stand out from its competitors. Sunshine’s began using Parlevel Systems in 2015 to help them manage their company expertly and effectively. For more information on Sunshine’s Vending, please call 310-422-8029.
