What's industrial vending, and why is it enabling smart factories?

Imagine this – you’re working on a factory floor. Small debris is floating through the air, so as you start your shift, you reach for your safety glasses. Bad news, they’re not where they should be. You can’t start work without your glasses, so you let your manager know. Your manager, however, just issued the last box of glasses from inventory to another department. Knowing how critical these are to daily work, he leaves the facility to run to a local retailer to pick up some more safety equipment. He pays with a credit card and doesn’t get a receipt. Stocking Equipment on the Spot Can Be Challenging For some companies, this is a typical approach to stocking safety material. When critical inventory is needed, a safety manager will run out and purchase material on a one-off basis, often on a credit card. This means equipment is being purchased at a higher retailer cost and productivity is lost. It’s difficult to track these purchases, document expenses, and understand material consumption. The biggest expense associated with fixed consumables is not having them. Industrial Vending for MRO and OEM This scenario represents why industrial vending is on the upswing. More and more companies are improving inventory availability through vending technologies by enhancing visibility and accountability. Point-of-use vending started with mainly MRO and safety products. Safety glasses, gloves, masks, ear protection, hard hats, and Tyvek Suits are some of the most common inventory seen in industrial vending machines. However, vending has made its way into the OEM space as well. Commonly used, high-volume products such as connectors, cable ties, small wire, cable and cordsets that go into products can be kept in vending machines for easy access. Imagine a “line down” emergency. Having critical spares for specific machinery that is critical in day-to-day processes means less downtime in the event of a line down situation. Manufacturers can store supplies that keep machines running in a vending machine. That can be the difference between a maintenance worker going straight to the issue and doing the work versus having to identify the part, sourcing and obtaining that part to make the repair. Vending has expanded beyond MRO and safety to these other categories. Munters uses vending technology to supply direct materials to their assembly-line workers. Benefits Beyond Personal Protective Equipment (PPE) Vending OEM Components Vending OEM components can actually help with production and quality management. OEM companies have high expectations for on-time delivery and product quality. With today’s technology, vending machines can monitor when an item is checked out and accept returns. If a product fails, you can track that through the supply chain to properly manage the return or repair process if appropriate. You can also identify potential route causes and/or original lots for quality assurance. Going Lean Additionally, vending technologies can significantly enhance the responsiveness and effectiveness of lineside material Kanban or 2-bin systems. Providing immediate notification of material outage or low levels and detailed reporting on usage, vending solutions can dramatically improve production uptime while potentially reducing on-hand inventories and costs. These systems can work as part of Lean initiatives as well. Placing inventory closer to where people are doing assembly work (point-of-use) creates additional efficiencies, reducing time and steps, saving space and improving ergonomics in many instances. Some additional benefits to vending include: 1. Cost Control  One of the biggest benefits of industrial vending is inventory and cost control. When items are logged and tracked, they are typically consumed only when truly needed, lowering overall usage. Manufacturers can lower their carrying costs, freeing up budget dollars for other priorities. Tracking purchases through the vending program also provides greater inventory allocation and transparency. Understanding where and when items are consumed, for what purpose or project, provides invaluable data that can drive productivity improvements and improve budgeting and profitability. Traceability is improved because if a process has a repetitive failure, managers can more easily trace down root causes through long-term data trends of material flow. 2. Reporting Vending simplifies cost control for corporate procurement. For data reporting, procurement knows what PPE is being used where, when, and by whom. Long-term data trends can also be pulled from this vending data. Year-over-year comparisons for consumption spending can determine cost allocation for future projects. Ultimately, this provides a better vision of how your items are being consumed and where money is being spent. 3. Consolidation Industrial vending also allows for a consolidation of service suppliers. Having all of this material supplied by one partner means there’s only one phone to call when you need something. Different departments often use different brands or styles of products that are essentially the same. Consolidating these provides a potential for volume savings. One Step Toward a Smart Factory Industrial vending can be the first step in a move toward a smart factory. Vending is part of the whole concept. Most manufacturing operations use a data collection system in their production lines or process equipment. The company collects data when the system fails and lines up data when MRO materials are being consumed. This system provides insight into failures and consumed safety and MRO materials, which together can provide greater visibility into the true cost of ownership (TC) of a system. These data points can also be the first hints at a potential root cause of the failure, providing insight into potential remedies and fixes. Systems and machines can connect to the supply chain. Down the road, a factory could use this vending information to plan a supply chain response. If every year, a system fails in the same way during a certain production process or at a certain frequency, the company can react to the upcoming production schedule to build up inventory. Getting these products in advance allows companies to prepare the supply chain for unplanned or cyclical events. The ultimate goal is to digitize the supply chain of MRO and safety products. Vending can provide insights, tracking and data that can serve as a move in the right direction.

3 Ways to Optimize Your Supply Chain Strategy

Think of your supply chain as your company’s engine – the smoother it runs, the more effective your business will be. Most companies realize this, but accomplishing it is a bigger challenge. Supply chains aren’t vastly improved overnight. It’s a process that requires time, resources, and the right professionals who can help shape and drive your strategy. But if done the right way, your organization will be able to master its processes, save costs, and mitigate wastes like a well-oiled machine. Here are three ways to ensure that your supply chain strategy will achieve optimal effect and maximum benefit. Align it with your business needs. Aligning your supply chain strategies with corporate objectives will ensure that the organization aims for the same goals. Having leadership support could also eliminate potential barriers that might hinder your strategy. Consider establishing a governing supply chain council that includes your supply chain leader, executives, business unit leaders, and other influential people in the company.  It’s also important to consider how your supply chain is structured. Some companies prefer having supply chain professionals in different business units, whereas others use a centralized approach. Some companies even combine both methods for greater effect. Remember that data is king. It’s crucial to understand how your processes tick. Companies need to know what’s performing well (and what isn’t), how effectively inventory is being tracked, and what type of return on investment they’re getting. The key to gathering this information is sufficient and dependable data. Data analysis has come a long way over the years. Businesses no longer need to manage their supply chains in tiers. Data enhancements now allow companies to manage their processes from end to end, often in real time. To manage everything effectively, many companies govern their entire supply chain through one leader. This person is often responsible for overall performance management and establishing improvement projects across an organization. He or she should also build a data-driven operation with a team that can search unstructured data for risks and opportunities. Your IT team should also be on board. Ensure that they can support any technical resources that will help you make analytical decisions. Embrace the right technology. Technology can do wonders for any supply chain, but only when used properly. Many companies adapt workflows and processes to their software rather than select a service that best fits their needs. This could encumber the data your company needs to make proper business decisions. Get as much useful information from your technology as possible. This will help you achieve greater efficiency, including a more productive purchase-to-pay system. Many businesses use a purchase order management tool to help streamline their operations. This makes it easier to manage delayed or missed orders and better assess metrics. This type of system will also give you extensive visibility to your entire supply chain, making it a worthy investment and a savvy strategic move. It's worth the effort. Optimizing your supply chain strategy will take time, but taking the right steps will get you there much faster. Leverage a comprehensive team of experts and executives, get the most out of your technology, and don’t forget that data rules. These actions will nurture improvements that will impact your bottom line in the best of ways.