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Inventory Management: When Vending Is Not the Best Choice

 

Grainger Editorial

Posted: 7/20/17

 
 
 
Inventory Management: When Vending Is Not the Best Choice

As the least resource-intensive form of inventory management, vending is an appealing choice for many companies. Instead of spending time on restocking, managing inventory, and monitoring compliance, organizations using a vending solution can focus on getting the job done. This hands-off approach saves time and money across the floor.

Even though vending can be a powerful tool for your team, it may not always be the right answer. Depending on the exact needs of the organization, ranging from tight human monitoring to the need for a rotating inventory, other inventory management solutions may be more appropriate. There are 6 common scenarios where your company may need to think twice about vending. 

1. Inventory Control Requires a Human Monitor
Vending greatly reduces the human element from normal inventory management, automatically monitoring stock and access without the need to issue material by staff resources. This works for most industries, where a human presence is simply not needed. 

Not all industries have this luxury. Organizations focused on mining or semiconductors, for example, may have requirements for very stringent inventory controls at all levels. Whether to protect intellectual property or to prevent loss, these organizations require a person to approve access to nearly every tool, part, and material used in production. While vending can meet these requirements in many cases, it may not be an appropriate solution in environments where compliance demands human monitoring

2. Slow or Seasonal Pace of Work
If your team is not producing every week, then having an on-site vending solution may not be the best way to get materials. Many industries are contract-based and highly seasonal, with weeks or even months off. While having inventory on hand daily is useful during the busy season, keeping it around during the off times costs money and requires upkeep.

General inventory management is a great option for teams in this situation, and vending should still be considered as part of that plan. Weigh the costs of maintaining the solution in off times against the efficiency of vending to find out if a balance of vending will work for a seasonal team.

3. Unpredictable Jobs with a Range of Materials
Not every industry has the benefit of producing the same things every day. Many teams, like those in electrical and fabrication shops, may need to rapidly switch parts and expertise to meet the needs of a new job.

While vending can cover common items like PPE and basic tools, each job may require specialized materials not needed in other jobs. This requires a vending solution that is either constantly refreshed or that holds unneeded inventory. In both cases, vending alone may not be an appropriate solution for the fast-paced change. The situation instead favors normal inventory management focused on predicting need and ordering directly in advance of a job, with vending to manage common items.

4. The Team Is Not Invested in Change
Vending is a people-first solution: your team can access exactly the materials they need to do the job well in an instant. That benefit is only realized if the team actually adopts vending and uses it. If they bypass monitoring or buy their own supplies, the gains realized will not match your objectives.

A vending solution must live alongside established culture and ways of doing things that can make adoption difficult. Without buying into the new approach, many on your team will fall back on old, inefficient habits. This does not mean that vending is inappropriate for these teams, but that the change needs to come from the bottom up. With the support of those doing the work combined with organizational support to make the move, vending can become the new way the team works. 

5. No Investment in Monitoring Inventory
Every organization cares about saving money, but not all invest in understanding every efficiency available to them. The key benefits of vending are that it reduces the need to directly manage inventory while monitoring real-time use and stock. If neither of these objectives are important to your organization, or just fall below other critical priorities, then vending may not be the right solution. 

Generally, this means that your organization is focusing on other objectives and efficiencies, or that staffing is too tight to manage a new process. While vending may certainly impact the organization even without a clear goal, it is likely that adoption will be reduced and executive buy-in will be lacking. Consider vending as part of the overall inventory management plan in this situation, and slowly phase it into the team as inventory objectives become clearer.

6. You Want Hands-on Control over Inventory
Vending solutions work best when they are automatically tracked and replenished to ensure that your team always has the products they need. That requires not only knowing what you need and constantly monitoring access, but also using a third party to manage restocking at all times.

That approach simply will not work with every company's inventory management approach. Some may want a more hands-on approach, choosing when and what to order internally. Others may schedule delivery around very particular milestones, perhaps quarterly or before big jobs. In either case, the organization has a strong willingness to manage their own inventory and is likely best suited to use that method as their primary inventory management approach.

 
 

The information contained in this publication is intended for general information purposes. No representation is made that the information or references are complete or remain current. Click here for Grainger's full legal disclaimer.

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