Purchasing

Mary Walker

Making the Most of Vending Machines
July 24, 2007

No, I am not talking about going to the break room and putting some money in a machine to get a snack you don’t need or a drink to quench your thirst. We are talking about a MRO vending machine.

I was reading the Purchaisng article Partners in cost management by Susan Avery, from the November 2, 2006 issue of Purchasing. (Don’t discount an article by date, that is a mistake. A lot of good information is out there that still pertains to today’s world.)

In the story, Danny Hemperley, senior manager, strategic sourcing, indirect materials at  PPG says he was looking for innovative and creative ways to reduce costs. PPG uses vending machines to dispense such MRO items as safety supplies at some of their locations.

The way it works is the vending machines, which are located close to the job site, provide employees with access to supplies 24 hours a day. They use an ID card or personal code to dispense items. The article states with this accountability it helps manage consumption which drops through use of the machines and tends to stabilize at that level.

Items in the vending machines are consigned inventory and PPG pays for them as they are used. Distributors handle restocking and can view use via the internet. A few years ago when I worked in material handling at Briggs-Weaver, we had one of the vending machines on loan from the manufacturer. I wish I could remember the supplier. Anyway, we had it set up in our training room. The sales force thought we had lost our minds. "No one would use this thing" as they put it. Now they can even track usage via the Internet.

Distributors are now expected to provide service around the clock. Manufacturing plants, refineries, and other type of business run 24/7. Distributors have people on call around the clock. To maintain and keep this business, you must provide the service. What a great idea to provide needed supplies through the vending machines. Distributors provide people on site at some locations; however it is hard to keep people on site around the clock. You need to come up with ways to handle the needs of the employees.

This relates back to risk management. Run out of an item and production shuts down. It can be indirect materials. Employees are required to wear protective clothing, safety glasses and etc.; if you do not have it available, they cannot work. It is not just the nuts, bolts and screws that go in to a product that can cause production to stop. A manufacturer I am familiar with uses a certain type of masking tape in production--no tape, no work. Many MRO items affect production.

One of the things that surprised me in the article was the visibility of storeroom supplies at PPG was only visible to the local plant. Purchasing was working on a new tool: visibility of storeroom catalogs. Did you realize PPG operates more than 50 manufacturing sites in the U.S.? Worldwide, PPG has 110 manufacturing sites and the company employs about 31,000 people. When PPG thinks about centralizes the MRO buy, this is a big project for purchasing.

Posted by Mary Walker on July 24, 2007 | Comments (1)