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Issue Date: Vol. 42, No. 4 / April 25, 2002 - May 24, 2002, Posted On: 4/25/2002


NAMA SPRING EXPO: Operator Panel Explains Advantages, Describes Potential Pitfalls Of Employing Handheld Computers For Automated Data Retrieval


Tim Sanford
Editor@vendingtimes.net

LAS VEGAS - A growing number of vending operations, large and small, are embracing handheld computer technology are weighing the pros and cons of using today's increasingly rugged and affordable "palmtops" to download data from DEX-compliant and retrofitted machines. A panel of operators, each of whom presently makes use of this technology, shared its experiences at a seminar titled "Handhelds: Your Next Business Partner" during the National Automatic Merchandising Association Spring Expo here. The panelists were Craig Hesch, A.H. Vending & Food Services (Rolling Meadows, IL), Thomas Murn, Answer Vending (Bellerose, NY) and Tom Whennen, Triple A Services (Chicago).

Hesch led off, explaining that he was a pioneer when he brought handheld computers into the business in his operation in the1980s. While he could see the potential benefits very clearly, he learned that the first generation of handheld devices simply were not engineered to withstand the kind of handling they received on a vending route.

Hesch presently is having a second go at route data automation, this time with the new industrial strength hardware , developed on the basis of users whose experiences had been similar to his , and he is confident of success this time around.

Once the handhelds replace paper route tickets on all of his routes, the third-generation vendor plans to implement DEX automated data retrieval, first for audit information and then to retrieve item-level sales records.

"Operators ask me what you save, and what you get, by using handhelds on a route. There really is no loss or gain , on the route , unless you're using DEX," said Hesch. The driver is following instructions on a screen and entering information with a keypad, rather than using a paper route ticket and a pencil; the time required is about the same.

Still, Hesch said, it's worth doing. "It's in the back of the house that you save labor and get more timely information," he explained. "We saved 35 minutes on each route in the office, and were able to do the same job with two fewer people, when we went to handhelds." Data keyed into a handheld route computer can be uploaded automatically to the office data processing system; it need not be rekeyed in the office, and it is free from transcription errors. And, of course, familiarizing the drivers with handheld computers can be expected to ease the transition to DEX.

Tom Whennen, Triple A Services (Chicago), has 33 vending routes, and he sees automated data capture and retrieval as essential to the business's success. Triple A has used Rutherford & Associates' route management software for the past 20 years, and Whennen now has the majority of his routes up and running on second-generation handhelds. He is prepared to move ahead to automated data collection, he told the audience. He attempted to do so a few years ago, but was frustrated by incomplete implementation of the standard by machine manufacturers, as well as by their differing interpretations of what the standard actually was. The problem was widely recognized, Whennen reported, and most of the kinks now have been ironed out.

PRIOR PLANNING

The veteran operator emphasized the importance of detailed, well-informed and realistic planning. The first step is having management software in place that will be capable of processing the information and generating the desired reports when the DEX system begins to stream that information in.

There can be a lot of hurdles along the way, he added, and equipment malfunctions are high on the list. He advised operators to do their homework early, to avoid costly headaches.

Whennen is pleased with the "Symbol 1800" handheld computer, with scanning capability, that Triple A has adopted. "It makes it easy for the driver to inventory at the truck level, and on the column level at the machine," he reported. The durable "palmtop" computer can operate at temperatures as low as -20·F., and its backlit display screen is a great help in imperfectly-lit locations.

To ensure a smooth transition to handhelds, operators must bring employees into the process from the beginning, emphasized Whennen. "If your people do not 'buy in', it's not going to work. It's critical that you train your supervisors from the beginning, as well as the drivers. You need to put the computer right in their area; show them what you do with the data, and let them get familiar with it," he urged. "We've had few problems with our drivers; they like to build their orders and do their inventory with the handhelds. But supervisors are less quick to embrace data automation if they don't understand why you want to do it."

It is also essential to design and organize the data that the handheld will display, to it will be easy for the driver to read and understand. For example, Whennen suggested abbreviating the names of products so the entire label will fit on the screen without the need for horizontal scrolling.

It's also very important to make sure that a detailed record of all the inventory in the warehouse and on the trucks has been established in the host computer' database before the handheld devices take the field, or the implementation can't succeed fully, he added.

"You have to decide how much money to allocate to equipment and training. The initial benefit of handhelds is that they reduce expenses in the back of the house," said Whennen, concurring with Hesch. "At first, it may take a while to determine which reports you want to use, because there's capability to generate far more reports than you need. But once you decide what information you want, you'll be able to generate reports instantly that used to take three days, because the office workers had to key in all the data. That data now comes right in from the handhelds."

Thomas Murn of Answer Vending (Bellerose, NY) fully automated his company's route data collection process three years ago, using handheld computers that upload both audit and sales data from DEX-compliant vending machines. It has proven well worth doing, he said, but it was not simple.

WORTH THE EFFORT

"It was a slower process than I would have liked, but issues that existed in the past have been resolved by data automation," the Long Island operator told the audience. "I think the present is a good time to get into handhelds; I think the manufacturers understand us."

And it must be done, he emphasized. "You'll need handhelds to compete, if your competitor is using them to run his business more effectively."

Murn explained that he invested $3,000 to $4,000 per route when he converted to handhelds, along with the cost of training route drivers and back-office staff. The process involves a lot of time and work, at best; costs mount swiftly if everyone is not very sure of what to do, and convinced of the value of doing it.

"It's very expensive if you're not going to take it seriously from day one," the panelist warned. "The drivers, office staff, supervisors , and owner , must be committed from the outset," he emphasized. "If you're not committed to making very sure that the data is collected and used correctly, you'll be wasting your time and money."

Operators who make the move to handhelds must be patient, added Murn. "It may take six months to a year before you see the benefits, and before you decide just how to act on the data you receive," he noted. "But over time, you begin to see the changes that you can make to reduce expenses on your routes and to become more profitable."

Handhelds that incorporate DEX data transfer technology are well worth the investment, if for no reason other than their superiority in tightening accountability for cash, Murn stated. "You can compare each transaction to what actually was collected; you can sleep well at night," commented Murn. "Handhelds with DEX capability upgrade the operation from a 'cash business' mentality to the recognition that you'll be held accountable for everything you do. I found things I didn't like about our procedures when I saw the information. You can run smarter by collecting and analyzing a lot of information, but first, you have to pick the key things you want to watch and control. Do that, and you'll make quick changes to your organization."

EASING THE TRANSITION

Sanford added that the experience of companies that made the earlier switch from manual to computer record-keeping a decade or two ago was that the ones already practicing meticulous record-keeping the "old fashioned" way made the most straightforward transition to the new technology. However, less well organized companies that grasped at computers as a magical way to bring order out of chaos had a very difficult time of it. The panelists' emphasis on the need to plan, prioritize and prepare suggests that the same principle applies to the next step forward.

The moderator asked to what extent the panelists make use of handheld computers in their warehouses.

Hesch said that the final piece of the puzzle in order for his company to be fully automated is to integrate the drivers' order requisition process into the handheld program. "That way, we won't need people five days a week just to get the product moved to the truck," he explained. "You have to look at why you want handhelds: to reduce labor? To tighten control? We still have a way to go in our company before it's totally seamless."

Triple A Services uses handhelds both in the warehouse and on its routes, and the money room also is linked directly with the management information software. Thus, warehouse tasks and collection processing are automated, exchanging information automatically with the host computer. "The next step is DEX out of the machine, first for cash accountability, and then for item-level detail," Whennen explained.

Using the handhelds to track data at the warehouse level enables Answer Vending to generate "movement reports," so the company can leverage its purchasing power to best advantage, Murn said. "We can look at last February's records, and by seeing what moved, we can work out a deal with our supplier to buy three months' worth of product at once, to save money. It's a lot harder to take 100 receipts from last February and try to figure out what you bought each week," he pointed out.

MAXIMIZING SALES

And by uploading data from the vending machine directly into the handheld computer, Answer Vending is able to track exactly what was sold from each column. This permits category management on the basis of much better information. Also uploaded is a record of the money inserted into the machine for each transaction, which provides very accurate cash accountability. The handheld automatically "grabs" the meter reading too, leaving little room for undetected foul play.

The moderator asked whether the panelists check merchandise out to drivers by using an electronic register with scanning capability, like a supermarket's.

Answer Vending's warehouse supervisors scan product boxes, creating an electronic record, as they issue them to drivers, Murn replied.

"Our drivers fill out a piece of paper right now, but my biggest push is to have a touchscreen ordering system. That's the last piece of the pie for our system to be seamless," said A.H.'s Hesch.

An audience member asked the panelists which management software package is used by each. Hesch runs EMS Solutions' management suite; Murn employs Validata's "RouteSail" package; and Whennen's company is on Rutherford & Associates' information system.

PHASED PROCESS

"How long did it take for you to make the jump to handhelds?" asked another participant "And how did you do it , route by route, or all at once?"

Hesch replied that when he made his initial move to handhelds in the1980s, he trained each route driver individually, one at a time. "This time around, when the time came to retrain them, those who knew the first-generation handheld loved the second generation model so much that it was a very painless process," he recalled. "I spend one and a half hours with four drivers, on a Wednesday, to train them; then I send them out on Friday, which is not a heavy day. If they know the paper route book, then they know what information to enter, and they can learn the handheld within an hour and a half." They go out with no paper backup, so they will rely on the handheld for the information they need, and must enter data into it as they perform their scheduled tasks.

Whennen trains his drivers individually. He emphasized that operators can reduce the steepness of the "learning curve" substantially by having a well-thought-out training plan in place. This is another example of the importance of good, detailed preparation and planning for the shift to automated data collection.

The ability to train drivers efficiently and competently builds confidence, the industry veteran explained; and drivers thus trained almost always will continue learning on their own. "Your route personnel will pick up that handheld and do more with it than you thought it could ever do ,in many cases. They have fun with it; they use the built-in 'Palm' features, and they put their schedules into it."

Murn reported that his drivers were not at all ready to embrace the new handhelds with DEX data transfer capability; and many of them had their reasons. "I lost 30% of my workforce almost immediately, because once the information started coming back, I found out how many 'partners' I had in my business," he said. "The technology makes it impossible for them to do anything they shouldn't be doing."

Not all the reluctance was occasioned by dishonesty, Murn added; in some cases, mild technophobia was the cause. "Some of our drivers were very frustrated because they'd never used a computer before. And the handhelds hold them to what must be placed in each column, which is more time-consuming for them."

The drivers who survived the transition are proving the value of the new technology, bringing back $170 to $220 per collection, with no empty columns because Answer Vending is able to use the data collected during each service for increasingly accurate sales forecasting. This virtually eliminates sold-out conditions and minimizes staleage. The drivers unwilling or unable to make the changeover are gone.

"Those who are not happy with the change will fight you tooth and nail," Hesch agreed. "But it's too bad. You have to rock the boat a little to move ahead."

Triple A's Whennen noted that while most of his drivers now are pleased with the time they save on their routes by using handhelds, he also lost some when he made the switch. He expects to lose some more as a result of the transition to DEX.

Whennen again emphasized that it takes a lot of time to plan for the switch to handhelds, and then to DEX. Once the planning is complete, actual implementation does not take long.

DEX data collection is attractive to drivers whose compensation includes commission on sales, he added. The faster return of more accurate and detailed sales data enables machines to be stocked for maximum sales, and saves time on each stop so drivers can handle additional business in the same amount of time. Both these benefits put money in their pockets, Whennen said; "The ones who stay on will see that."

Sanford asked the panelists to what extent their handhelds are integrated with money-room data automation.

Whennen replied that Triple A's bags are marked with identifying numbers; the driver enters the bag number into the handheld, to identify the machine whose collection it holds. He is preparing to further simplify the process by placing barcodes on collection bags, so drivers can scan in the bag ID.

Answer Vending's drivers punch the numbers of each collection bags into their handhelds as well, Murn explained.

Sanford pointed out that any standard covering the collection, fielding and encoding of transaction data from devices as diverse as today's full-line vending machines is likely to contain a lot of leeway for idiosyncratic interpretation, until experience suggests the ways in which the standard must be made more precise. He asked the panelists what specific difficulties they encountered in working with earlier versions of DEX.

DURABILITY

Murn's biggest complaint, early in the game, was that the cables used to connect the handheld computer with the DEX jack had not been designed with route drivers in mind; this issue has since been resolved, he added.

"The cords that the drivers plug into the machine were very flimsy, and drivers are not real gentle. They'd supposedly been designed to last for four years. and the drivers were going through them every 35 days. And those cords aren't cheap; we got a bill for $4,000 for cords!" he recalled.

"Now they make them stronger," Murn reported. "Now we also tell the driver, 'You break it, you buy it,' and they seem to last longer."

He also noted that, on a small percentage of machines, the driver plugs the handheld computer in, but the machine does not download the information automatically. In such instances the driver can manually initiate a data transfer.

Whennen commented that, for most operators, it's likely that only 50% of their machines are DEX compliant, while 50% will need to be upgraded. retrofitted or replaced. The upgrades and retrofits today work well, but some machines may not be worth the expense.

"And we've argued with the software companies along the way; I think they've made it work a whole lot better,' Whennen added. "It used to be too difficult for the driver just to switch one product out of a machine for another; the interface just wasn't user friendly, but I think that's changed."

Murn agreed that a certain cost for replacing unsuitable equipment must be anticipated. "In some situations, it's not cost-effective to upgrade your machines for DEX," he said. However, the benefit of automated data retrieval is worth paying for, whether by retrofitting or replacement of obsolete venders.

"You need to evaluate your routes, account by account. The data you get by DEX upload really lets you see the cost of goods, and deduct location commissions and driver commissions; it tells you plainly when you should walk away from an unprofitable account, or renegotiate your contract."

Whennen again urged operators not to try to do too much at once, but to be systematic in their approach. "You'll fail if you do too much too soon; we did. But now we're succeeding. Start with cash accountability, if you can't decide where to start, then move to the item level detail. And plan for at least four weeks for the driver to get comfortable with it," he advised.

Murn added that operators or route supervisors who have seen see three errors pop up on a route report in one day will understand the value of immediate access to accurate data. "With information retrieved over a DEX connection by a handheld and uploaded to the office computer, management can now address an issue on the same day it's discovered," he said.

The hardware has come a long way, according to Hesch. He noted that the first-generation handhelds, which had been designed for business applications but not engineered for hard use in the field, had a 10% failure rate. Worse, when they did fail, all the data that had been keyed in could not be uploaded or displayed; it, could only be printed out, and using the printer drained the battery. "There weren't enough slots for a barcode reader. There were a lot of early problems, including insufficient training by the suppliers in addition to the unreliable hardware," he recalled.

Hesch added that, even with today's durable and reliable handheld computers and upgraded software, manual data entry results in about 10% of his meter readings being wrong. "I can't blame that on insufficient equipment; it's insufficient people!" he explained. "I'm dying to go to DEX because I think that will eliminate the problem, even if it means drivers leave."

BUILDING CONSENT

He thinks most will stay, if management addresses their perfectly natural reluctance to start doing something unknown rather than something they're already good at. "You have to gear people up to be positive about the change. They all have to be on board, and understand your vision in order to buy in. I had one driver who went out and dropped two handhelds , intentionally destroyed them , because he didn't like the system; and drivers will do that if you don't persuade them that handhelds will make you be a better, more profitable company."

Murn noted that using DEX technology "red flags" even the slightest discrepancy between sales and collection. "With DEX, we don't even care that much about meter readings for the customer, because we have so much more detail. If the collection is $94 and I know there was $96 in the machine, I get somewhat concerned. When there is an error, the supervisor has to do an audit if the problem is too big to understand, and he can do so very quickly," said Murn.

A seminar participant asked the panel members whether DEX works with a hot beverage machine in the same way it does for a packaged cold drink or snack vender.

"With a coffee machine, it's not going to tell you which item sold, only the cash audit. Coffee machines are not really part of the DEX standard yet," replied Murn.

Whennen is hopeful that bigger and better things are on the horizon for DEX in the not-too-distant future. "The problem is that manufacturers and software suppliers have been telling us how to run our businesses, when in fact we need to tell them how we do that," he said.

"I would love it if NAMA would get involved in training, to find what we need and to bring it to the manufacturers," added Murn.

An operator in the audience asked how drivers prepare their pick lists, and whether the process has been automated.

Whennen reiterated that while his drivers presently manually requisition the items they need, the next step will be to inventory machines automatically to determine what must be sent out to replenish them. "Eventually, we hope to do projections. The next generation will allow dynamic routing, all based on the information from projections created with data transferred through the DEX interface, perhaps through wireless polling," he stated.

Before DEX, Murn reported, his drivers used to come back with 40% of the product they brought out on their route trucks. With DEX, that figure has dropped dramatically, to 14%. "DEX gives control back to the owner, who can determine where the driver should be and what product he needs," he said.

"As much as you expect your people to change, you need to change, too," Hesch pointed out. "And as much as you change in the front of the house, you have to change in the back as well, if you're going to succeed."

And time is of the essence, according to Whennen. "If you don't learn more about handhelds and DEX, and start making the move, you won't be around in five years," he warned.


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