How to Measure Your Pre-Kitting Success
Now that you’ve begun to implement pre-kitting, you want to know if it’s working, and you want to know now! Who can blame you? It’s been an adventure changing your entire business process, and you want to see results. There are two main numbers you’ll want to watch every week to determine the impact of pre-kitting on your vending business:
You may have a different term for “returns”, so let’s clarify that up front. A return occurs when your driver puts a certain quantity of merchandise on their truck to load into a machine, and that machine doesn’t need those items, so they are returned to the warehouse. This occurrence is a very specific measurement of inefficiency. Your returns can be measured in actual units or as a percentage of total units. As a rule of thumb, once you implement pre-kitting, your returns should be less than 20% of total items shipped.
Returns decrease because of the accuracy of your data. You now know - because you have a planogram for each machine, which items are selling and from which slots. Replenishing those items in a timely manner means fewer outages and more sales.
If your returns are 5% or less, then your vending business has attained rock star status.
Second, your revenues for each route that has been converted to pre-kitting should increase. Revenues increase partially because of the data improvement mentioned above, but also because now each route that is pre-kitted is now more efficient and can take on more machines. Unfortunately, there is no rule of thumb for how much that increase should be. However, you should know that, if a the number of machines on a route does not change, but the revenue from that route increases with pre-kitting, then there was a problem with shrinkage on that route.
Finally, if you’re reading this article and you have not yet started to implement pre-kitting, start measuring and monitoring revenue and returns for each route. Then, once you’ve implemented pre-kitting, you’ll be able to see the exact decreases in returns and increases in revenue that pre-kitting can bring to each route.