From Potato Chips to Power Cords: Revolutionizing The Supply Chain with Smart Vending Machines

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How Smart Vending Machines will Revolutionize Supply Chain Planning and Asset Management for IT Peripherals and Accessories

Perhaps no fixed asset has been so constant and ubiquitous in the business world as the humble vending machine. Whether tempting you to cheat on the latest fad diet or just providing an excuse to leave your desk for a minute, vending machines have been a mainstay of office spaces for decades. Thanks to recent advances in connectivity and Internet of Things (IoT), this old dog has learned some new tricks.

In the traditional model of IT asset management, support technicians or office managers restock bins in office supply closets or service support desks on a periodic basis. With the bulky, inexpensive, low turnover assets of yesteryear, this arrangement was suitable. In today’s business landscape characterized by a mobile workforce and IT assets with compressed lifecycles, this method is fraught with management problems. At best, organizations mask or obscure their real demand signal for supply replenishment, and at worst, they foster failed internal controls for asset accountability.

Many organizations still treat these inefficiencies as an acceptable cost of doing business — an indirect, below-the-line, management overhead not worthy of attention. But while we continue to shift to a service-based economy from traditional manufacturing, you have to ask yourself: what are the significant expenses incurred that can truly be controlled? As competition for skilled personnel sends labor costs to dizzying heights and commoditization of hardware production limits quantity discounts commanded by even the largest organizations, it is unlikely that talent acquisition or hardware unit price is the answer.

Enter the smart vending machine. For some time, leading manufacturing organizations have used versions of this concept to control and track direct product costs incurred by the production line (e.g., materials, tooling, equipment, etc.). This same concept is beginning to come into vogue for IT assets as organizations around the world realize controlling indirect costs in cubicles today is just as important as controlling direct costs on the shop floor in years past.

Smart vending machines dispense hardware with the swipe of an employee ID badge, allowing IT managers and their supporting supply chain management organization to track and manage the business down to the end user. Aside from the asset accountability benefits this setup inherently enables, the importance of capturing true demand at the point of consumption cannot be overstated from a supply chain planning perspective.

Raw demand data captured automatically by a connected smart vending machine can be leveraged in myriad ways by organizations seeking cost and operational improvements. The data can be configured to flow directly into an organization’s ERP or other procurement/planning systems to reduce administrative lead time and right-size inventory levels to achieve desired service levels. This precise conveyance of the demand signal allows organizations to remove pipeline inventory from their end-to-end supply chain, reducing cost while simultaneously improving the customer experience via reduced stockouts.

Data feeds can also be linked to business intelligence dashboards to alert leadership of shifts in the business environment and changes to their end users’ needs. Traditionally, this problem manifested as a storeroom full of obsolete technology and perpetual inventory write-offs. Enabled by automatic data feeds, IT and supply chain leaders can process trends in real time and effectively mine for actionable intelligence before it’s too late.

Smart vending machines will likely represent notable upfront investment in your organization’s IT management solution, with the connected hardware and backend interface configuration running in the thousands of dollars per copy. But when you start to consider the total cost of ownership business case that includes all of the potential efficiency gains and improved user experience, there is an opportunity for real transformation. You may find that, unlike the broken snack dispenser in your break room, this vending machine will make change.

To learn more about how you can leverage innovative technologies at your business, click here to schedule a fee-waived, 60 minute Innovation Diagnostic with our subject matter experts.

 

Gaetano Gerace
Supply Chain SME
Gaetano is the Supply Chain SME for the Astreya Center of Excellence with expertise in supply chain management and operational strategy development with a focus on quantifying the financial benefit of improvements to logistics, procurement, and operations.
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