Atlanta Vending management knew that they needed to find a better way to implement pre-kitting in order to achieve significant savings. Cantaloupe Systems offered an approach that would allow Atlanta Vending to use actual machine sales to make their pre-kit product selections. “The Cantaloupe Retail Optimization Platform is an active management system, always adjusting, always analyzing sales data,” said Shaw. “We knew that by using actual sales data from the Seed application, we could achieve our pre-kitting product projections and improve accuracy.”

A second component of Atlanta Vending’s decision to implement Cantaloupe Systems’ Seed was their desire to centralize control of machine merchandising. Route drivers had been making decisions about product selections on site at the machine. By removing route drivers from this decision process and centralizing it, Atlanta Vending anticipated they could better control inventories. Freeing drivers from product selection tasks would also help drivers complete their routes more quickly.

IMMEDIATE EFFECT ON ROUTE EFFICIENCY

Atlanta Vending began their Cantaloupe Systems’ Seed implementation in January 2009. They started with three routes that were geographically adjacent and installed Seed in all 300 vending machines on these routes. The primary focus of this initial phase was to reduce driver hours on the three routes.

Prior to Cantaloupe Systems’ Seed implementation, all routes were fixed geographical routes. Routes were serviced on a static schedule based on average account and machine sales volumes. Cantaloupe Systems’ Seed implementation enabled Atlanta Vending to switch from static route schedules to dynamic routing and scheduling. All accounts on these three routes were now serviced only on the days that they needed service. Thus drivers made fewer stops on their routes, resulting in fewer driver hours. The historical 10–11 hours per route per day was immediately reduced to eight hours.

The second phase of the implementation focused on pre-kitting and the addition of three more routes. The entire group of six newly implemented routes could now be consolidated into three and a half routes due to the greater route efficiency. “Pre-kitting worked as well as expected with Cantaloupe Systems’ Seed technology,” said Shaw. “We were able to get the right mix of products in our customers’ machines and further improve route efficiency by helping drivers spend less time at each stop.”

The implementation of pre-kitting allowed Atlanta Vending to reduce inventories by an estimated 25–39% primarily due to the elimination of on-truck inventories. They were also able to reduce average vending machine inventories by servicing accounts less frequently without negatively impacting account service levels.

IMPRESSIVE RESULTS THROUGHOUT THE ATLANTA METROPOLITAN AREA

After the success of the first two phases of the implementation, Atlanta Vending accelerated its implementation process. The company now has more than 2,300 machines connected to Seed throughout the Atlanta Metropolitan Area and relies heavily on Seed data for daily operations. With these machines actively connected to Seed, Atlanta Vending reported some impressive efficiency gains:

• 71.1% increase in average sales per route — Future route sales following complete Cantaloupe Systems installation and further operational refinement are expected to bring this increase to 114.2% of prior sales.
• 36.4% reduction in route count — Further route count reductions are expected, resulting in a total reduction of 50.0 to 54.2%.
• 25%+ reduction in inventories — The estimated reduction in inventories is due primarily to the elimination of ontruck inventories.
• 33.8% reduction in route labor costs — Higher route sales levels and a change in route commissions has led to lower labor costs per route.

Historically, route labor was paid on a commission basis. Since implementing Cantaloupe Systems’ Seed technology, greater route efficiency has enabled Atlanta Vending to convert to a per-unit commission rate that translates to a reduction in route labor costs by more than a third (33.8%).

Another qualitative benefit of pre-kitting is a reduction in out-of-stock situations. Pre-kitting has helped to ensure that adequate products are available for every machine on the routes. In the past, Atlanta Vending was experiencing truck inventory outages toward the end of the day, resulting in products not being available for loading into machines.

PROMOTING NEW ACCOUNT SALES AND FUTURE GROWTH

When marketing to prospective accounts, Atlanta Vending emphasizes that the customer can benefit from Cantaloupe Systems’ Seed technology. Seed gives customers the ability to see actual sales levels, thus supporting the calculation of commissions and promoting an open and honest image for Atlanta Vending. Dynamic route scheduling is also emphasized as an important component of Atlanta Vending’s green initiative. Servicing accounts on an as-needed basis significantly reduces Atlanta Vending's carbon footprint and can help reduce wear and tear at the account's facilities due to lower vendor/contractor traffic.

Cantaloupe Systems’ recent entry into cashless vending is also viewed as a future revenue opportunity for Atlanta Vending. Cashless payment systems are expected to help increase sales volumes at existing accounts by making it easier for customers to make purchases.

CERTIFICATION OF CASE STUDY

The findings presented in this case study, regarding the impact of Cantaloupe Systems’ technology-enabled vending solutions, have been independently conducted and verified by Bachtelle and Associates, a nationally recognized consulting and market research firm focused on the vending and automated retail industries.

Bachtelle and Associates conducted direct vending operator management interviews, followed by in-depth analysis of company financial and operational reports for accounting periods prior to and after the implementation of the Cantaloupe Systems’ technology and associated software and services.

The numeric findings included within the case study incorporated standardized accounting and financial return analysis techniques, including the application of appropriate federal and state tax effects to complete the payback and return on investment calculations.

An additional statement including a broadened summary of applied methodology is available upon request.