20 Aug Servomation Saves 37% Labor by Picking Beverages on Lights
If you are in the vending business, you’ve probably wrestled with the question of how to pick beverages on your LightSpeed system. Should we use our tablets or should we move them to lights? What would I gain by moving to lights? In our interview with Brian Bruno, President at Servomation Refreshments Inc, we discuss his operational efficiencies after adding lights and the early success his team achieved, and the thought process that led them to make this decision.
Servomation Refreshments Inc. is an entrepreneurial vending, office refreshment and innovative food concept company servicing clients and customers throughout New York, Connecticut, Massachusetts, and Northern Pennsylvania since 2007. For five consecutive years, Servomation Refreshments has been named to Inc. Magazine’s list of fastest-growing private companies in America, which measures a company’s growth over a three-year span. Servomation earned the position of 2,606 on the 2014 Inc. list. Servomation topped this list in 2012 at #904. Servomation has been named as one of Central NY Best Employers to Work for- 2017 and Avanti Markets’ Fastest Growing Micro Market Operators, 2017. In addition to its refreshment services business, Servomation also owns and operates two Corporate Restaurants.
Marler: So why don’t we start by talking just a little bit about how you guys went from bulk picking beverages to pre-kitting beverages. What was your thought process to take that step?
Bruno: If you look at the history of our industry, and how much it’s evolved… the margins of our business are constantly under pressure. One of the things that LightSpeed and other innovative technology companies have really done a good job of is allowing us to shift the pennies in this business around to help us drive better efficiencies and become more profitable. Moving forward, there will be increased pressure to maximize operating efficiencies in order to sustain margins. Employing technology and choosing the right partners will be critical to any company’s road map. Lightspeed has been one of the most significant strategic partners we have aligned with. With your support, on the snack side of the business, we were able to implement a very efficient pick system that allowed us to maximize both our labor efficiencies as well as affording us the opportunity to drive retail sales through individual SKU level picking. Fast forward, we are probably 7 or 8 years into the snack side and we were discussing ways to better improve our efficiencies in our corporate management meeting, we were discussing, “where is the next big chunk gonna come from?” And we started looking at our operation and where some of the other inefficiencies were, and it was kinda obvious to us – if it worked for the snacks, why wouldn’t it work for the beverages? So we started laying out what that might look like and started to recognize how much wasted time we had because of our growth and the way we operate, and picking beverages in a cart versus a straight line. That’s when we decided to reach out to Lightspeed to discuss how we may be able to implement and find success in a beverage picking light system.
Marler: What kind of bump, in either sales – and I’m not talking about specific dollar – but maybe percentage gain, did you guys see in sales as a result of prekitting beverages? Or did you see the savings on the backside where you were saving labor in the warehouse?
Bruno: We weren’t picking beverages in bulk. We were picking by the each, so we didn’t necessarily see any retail sales growth. Although I do believe if you were picking in bulk you would see a significant sales growth and also better retail sales and inventory turnover. But to answer your question, we saw on average a 37% increase in the labor efficiency in terms of the time it took to pick on an iPad in a U versus picking a straight line with the lights. It was very impactful.
Marler: I think we installed your light system the second week in May, so it’s been 2.5 months. How long did it take your guys to get adjusted to the change from picking with the iPads to picking with the lights?
Bruno: Within the first week it was vastly different. We continue to make little changes here and there, so we’re always evolving and improving. But I would say on an average, probably a week or two before we notice a huge difference. As an example, on the very first day we were expecting to finish at our usual time of around 2:00pm but we were done by 10:30 AM… it was remarkable how quickly we saw the impact.
Marler: Wow, that is remarkable. So you said about a 37% increase on labor savings. What have you seen in terms of mistakes on picking? Is it fewer mistakes? Is it about the same? Have you seen improvement in the overall operation of moving to the lights on your beverage line?
Bruno: There are certainly less variables to manage in terms of tracking potential mispicks. There is also a significantly lower chance of a mispick when using actual lights versus ipads with pictures. I do think that we’ve improved our ability to rotate product because of the way we fold those lines, and it’s in a straight line now; whereas before we would have to stop when you’re picking, or at least reload while people aren’t picking. Now you can kind of do that constantly, so you’ve got people working simultaneously. Again, it’s all about driving efficiency.
One thing we found early on was we couldn’t tag the bins the same way we used to with the snacks by utilizing the hanging paper color tags. We ended up finding heavy-duty clamps that are colored. They attach to the plastic bin on the back; they don’t fall off and they stick up in the air, versus hanging down in the bin. That helps the pickers recognize where the orders start and end easier. After a little real time experience in using the system, we started moving some of the beverages around just to balance the lineup. I think those are probably the two big things that we recognized early on.
Marler: That’s interesting. You’re right, putting the color clip on top makes it easier to see the order color. You were talking about rearranging the line – is that to balance the load out so that you guys are picking all the high volume drinks at the beginning of the line, or did you spread the high volume stuff throughout the total line?
Bruno: The way we looked at it originally, I think we were miscalculated in our thinking. If you pick based on the the highest volume SKUs, you can make a mistake because of the way certain assets are mechanized. Certain assets may be mechanized with a bottler or based on package sizes, etc., If you have those products next to each other on the line, you’re gonna have all nine of those selections right next to each other in a line which ultimately creates a bottleneck because there’s only one guy picking and then that light doesn’t start until that product basically catches up. As an example, we took the Coke and Pepsi portfolio and tried to get one of their best selling beverages to start at the beginning of the line and then obviously the the highest volume towards the end of the line. That way as soon as that color started, we could see early on where the bins needed to start.
Marler: So that’s a perfect segue into my next question. What are you guys prekitting the beverages in? Are you guys using totes or using the black Coke trays and the blue Pepsi trays? What container are you using?
Bruno: We’re using a custom container from a supplier located in the Midwest that Randy from Lightspeed recommended to us. We have used them for years. We took the plastic inserts out and we could fit 35 units inside the bin and it nestles on top of another one. We found that to be the most efficient way to stack creating the most cubic space within a transport vehicle.
Marler: Does it have an attached lid to it?
Marler: So it’s open.
Marler: Okay, because I was going to ask – how does a driver know if its beverages or snacks and the answer is there’s not a lid on the beverages.
Bruno: Well, it’s a different container altogether. I think the snack bins most people use are pretty universal. They’re wider and bigger. The beverage bins, they used to have an insert that sat inside where you only put 24 units in it, so if you take that insert out, you could fit 35 of them in. The footprint of those beverage bins is probably half of the size of a snack, maybe 25% less.
Marler: Okay, 35 units isn’t too heavy for the drivers to handle?
Bruno: No, based on the mix of packages its still only around 20lbs.
Marler: So one of the challenges that operators have when they start prekitting snacks is returns. Are you seeing the same problem with prekitting beverages where you guys are having a lot of bring backs? Or has the forecasting and telemetry eliminated that, and the totes are coming back empty?
Bruno: Well, I don’t know if I can answer that question. I could tell you that one of the biggest points of emphasis we have is just making sure we have good information coming in because I think if you do, you get pretty good output – and we have.
Marler: Last question, because hindsight is always 2020. Knowing what you know right now – would you do anything differently, or would you have done it earlier? And what advice would you have for an operator who was thinking about putting their beverages on lights?
Bruno: I wish I did it earlier; I also wish I looked harder at the layout and made it even bigger. If you were early on in evaluating LightSpeed as a solution, I would advise heavily to look at doing your entire operation. Both snacks and beverages at the same time, because it’s really hard to move these things once you implement them. It doesn’t mean it’s impossible, but it is very difficult once you start it. I do wish we started sooner and I’m definitely glad we did it, and I think that our employees are certainly happier. One of those things that we all know is happening that I can definitely tell you is we have a lot less safety issues in moving bins. We used to pick snack orders and not really be worried about picking them up. But when you start having people move beverages to consolidate them onto the different orders, because you complete your U when you pick on an iPad and inevitably your U-boat wasn’t full, so you’d pick another U-boat for your next trip around the circle, and then you try to combine those so the driver would only have one – that’s a lot of extra lifting and picking, so I think there’s a big advantage on the safety and workers comp side. I am definitely happy I did it and I wish we did it sooner.
Takeaway #1: Remarkable savings in labor cost, seen immediately.
Takeaway #2: Don’t be hesitant to make small changes that could work better for your specific operation.
If you are interested in learning more about beverages on lights, please email Lindsay Klintworth at firstname.lastname@example.org and we will get in touch!