The arrival of a new year is a good time to reflect on what we have done, and also what we have yet to do. Over the past four decades, the vending and coffee service industries certainly have made great progress from the early "seat-of-the-pants flying" management approach to sophisticated analyses of contributors to cost and profit. But there still is work to be done.
A central principle of modern management theory is that "you cannot control what you cannot measure." When understood and applied appropriately, this surely is true. In order to improve anything, you must be able to tell whether you've succeeded. At a minimum, that calls for quantifying present performance, doing something to change it, and then measuring the performance again. That's the only way to tell whether you have improved the process, or made it worse, or expended a certain amount of time and effort without result.
Vending and coffee service have understood this for a long time. The National Automatic Merchandising Association has devoted substantial effort, over the decades, to compiling operating ratio reports (Key Indicators to Success). This provides averages for the major expense categories which permit companies of varying sizes in different market areas to compare their own performance with those of similar firms (or, for that matter, different ones). Such benchmarks are the necessary starting-point for a manager seeking to improve profitability, and also are very helpful for "what-if" modeling.
But one area in which detailed information still is in very short supply is field maintenance. The vending industry always has taken pride in delivering prompt, effective service, and a variety of tools are available in the leading management information systems to track parts usage and analyze service calls according to a variety of criteria. These features can be very valuable in identifying a problem machine or a problem location, and in maintaining parts inventories efficiently. However, even operators who employ them diligently have no way to tell whether their service costs are in line with an industry average.
Three decades ago, an innovative coin mechanism was designed to reduce the incidence of jams, especially in cigarette machines, which tended to hang up at inconvenient hours. The developers marketed it by asserting that the average service call cost $65. We don't know where they got that figure, but we never heard anyone argue with it. And whatever the cost was then, it is substantially higher now.
The advent of remote diagnostics available through bidirectional data communications holds the promise of correcting some faults from a central station, and certainly can improve response time when a malfunction occurs. It also can provide additional detail for the operating company's database. However, these benefits still do not provide information on the incidence, nature and cost of service calls across the industry.
While modern vending machines are much less trouble-prone than their electromechanical ancestors, they still operate in a wide range of locations, subject to all kinds of environmental insults and human abuse -- and, of course, they still are machines, as susceptible to the operations of Finagle's Laws as television sets, computers, lawnmowers, washing machines and anything else. They will break down, and someone will have to go out and repair them.
Good preventive maintenance programs, effective customer relations, careful route driver training and many other remedies can and have reduced the frequency of out-of-order conditions; but, again, without industry-wide reporting and analysis, the individual operating company cannot compare the effectiveness of its remedies with industry averages.
This difficulty was described and explored at this year's NAMA OneShow annual convention by Bill Buckholtz, Goodman Vending (Reading, PA), whose long career in the vending business has included service as a field technician (see story). Buckholtz, who has been a standard-bearer for a number of industry initiatives, and the audience at his well-attended "Operator Perspectives" presentation traded ideas for establishing an online forum at which operators could report their own experiences (including their discoveries of new methods devised by ingenious patrons to beat vending machines) and generally share information. One participant suggested that this might be done on Facebook.
A tool like that could be extremely useful. However, we think there also is a need for to collect, analyze and tabulate information about variables like the average time spent repairing different categories of machine, the average cost of parts and the total cost of making a service call, perhaps including distance as a contributor to expense. This is not the same endeavor as an ongoing interactive bulletin-board, and both would be valuable.
The topic of field service always has been very important to vending operators, and is gaining importance with OCS firms too, as their equipment becomes more sophisticated. Detailed "hard" information would be a valuable membership benefit.