Apex Supply Chain Technologies, the supplier of point-of-work vending machines, has entered the European market after its solutions have conquered the US. Roberto Priolo finds out how the company expects to make supply chains in the Old Continent leaner.
Have you ever wondered how much time it takes a shopfloor worker to travel the lenght of a site, queue up at the parts store and come back to his station with what he needs? The answer is that, often, it takes a long time. Apex Supply Chain Technologies, a Ohio-based manufacturer of point-of-work vending machines, has found a way to tackle this form of waste, commonly experienced by many companies.
Kent Savage founded the company in 2006, and in the last five years Apex has sold thousands of machines in the United States. It has now crossed the Atlantic Ocean, and hopes to appeal to the European market just as much as it did to the American one (of which it now enjoys a 60% to 70% share). There are many benefits a company can reap by positioning a set of vending machines by a production line or in a hospital, just to name two of the environments where these solutions can be found: they dispense commonly used equipment and are connected to a cloudbased supply chain IT system to ensure reliable replenishment and easy access to spare parts and tools for workers.
The solutions Apex offers are, in many ways, revolutionary: the company’s vision of how the supply of spare parts and tools should be organised is, in itself, very lean. Apex machines don’t only reduce waste in the form of the time spent by the worker travelling to the spare parts store (with the consequent loss in focus), but they also contribute to saving a business a lot of money in the form of unused stock and lost items.
LEANING OUT AT THE POINT-OF-WORK
You can’t manage what you can’t measure. We are all familiar with this adage, and Apex is no exception. Its machines produce reports to help management see where stock is going. Data can also be segregated, to profile and compare usage between groups to realise where best practice is.
Line operators won’t have to travel to the parts store and, by simply swiping their cards in the machine, they will have immediate access to what they need, be it a pair of goggles, a drill or gloves. Besides the time savings, these solutions provide management with a valuable means of knowing who is using what at any given time.
Take Megastore, for example, a technology Apex will launch in the spring. It’s a point of use vending machine that will be completely pre-configurable depending on customer specifications and, more importantly, will be able to detect even the lightest items, even screws, being taken and then put back into place. Bigger than the very successful Edge 5000, Megastore can change if more space or extra storage for larger items is needed.
Founder and CEO Kent Savage says: “Megastore allows a wide range of items to be dispensed in a very compact way. It makes restocking fast and efficient, delivering greater value than ever before. We have made the space smart.”
In 2011 alone, Apex has installed over 10,000 machines. With 160 of Europe’s largest companies already using the technology in their facilities in the United States, the company is now confident about having a strong customer base to build on as it enters the European market, both in terms of end users and large distributors.
Steve Dobson, director of business development, tells LMJ about the formula that Apex has used to win such a big part of the market it operates in: “Our successful approach provides a win-win outcome and entails distributors providing machines for customers in return for gaining a bigger share of their spend on consumables. The advantage for the customer is that the usage of items is greatly reduced, often by 35% or more, and for the distributor that they lock in the customer, lock out the competition and gain a wider range of products.”
Savage explains why Apex’s vending machines can work well in a lean environment: “Companies that are already embracing lean understand the potential of the products we supply, which give them a way to achieve results in removing all sorts of waste – in motion, materials, time. High use, critical materials are placed right where workers need them. We help businesses to eliminate inventory, and a lot of the back office activities. The data the machines capture support the implementation of lean and six sigma, and the information they provide has a dual role: one for supply chain cost improvement, the other for process improvements.”
IS THE RIDDLE SOLVED?
The use of the cloud gives Apex a distinct competitive advantage over its competitors, who still work with older PC-based technology. Dobson says: “All reordering is automatic, as the cloud sends a message to distributors or buyers anywhere when replenishing becomes necessary. All you need is a device to get onto the internet, wherever you are, and you will be able to track what the usage is for each person, machine or cost centre.”
Savage adds: “The cloud allows us to increase visibility throughout the supply chain, linking information at all levels and automating processes and inventory.”
Apex machines can reduce inventory levels by 50%, consumption by 15 to 50% and increase stock turns up into the 30s. They are also quick to install and don’t require the purchase of any software.
Is it possible that Apex has found the ultimate answer to the eternal question “Can lean and IT work together?” Maybe so, but, as Dobson stresses, to make the most of the use of these vending machines companies need to understand what they want to achieve from the implementation. “They need to identify what they want from the machines. Is it cutting down on the usage of items, driving down costs or having the ability to measure their supply chain operation on consumables and tools?” he explains. Once again, a clear set of goals is crucial to implement a change initiative.