Technology fuels demand for industrial supply distribution systems, part 2: computer peripherals
Photo courtesy of International Vending Management.
Editor's note: This is a two-part series exploring the industrial product distribution market, which is rapidly growing and utilizes some of the same technology as self-order kiosks. The market offers a potential growth opportunity for kiosk suppliers.
The industrial supply vending market has fueled the growth of several supply dispensing system manufacturers in recent years, thanks to a growing demand for controlling supplies in industrial worksites. As noted in part 1 of this 2-part series, much of the recent growth is due to evolving technology.
Companies in the computer and technology segments have become major users of these computerized systems that help manage inventory and control product loss.
Technology companies grab market share
Mike Pitts, president of International Vending Management, a supplier of industrial dispensing systems, said that half his company's supply vending business is now for managing technology peripherals as opposed to more traditional industrial supplies such as mechanical tools and personal protective equipment.
Pitts credits the change to Facebook, which uses IVM machines to dispense keyboards, flash drives, headphones, cables, phone covers, screen protectors, mice, batteries and other items.
"They came to us in 2011," he said. "They had seen one of our supply vending machines at the Union Pacific (railroad) terminal. "It's exploded from there across Silicon Valley because companies are so focused on creating a frictionless environment where employees can focus on their jobs instead of waiting in line at the IT help desk."
|Industrial supply dispensers allow worksites to better control products and reduce product loss.|
The technology sector has grown faster than the more traditional industrial sectors for IVM, which now serves 28 countries. The demand for managing computer peripherals has grown faster than segments known as maintenance repair order and personal protective equipment.
"The technology sector will be far larger than the PPE and MRO vending," Pitts said. "It will be much larger since there are so many more products that can be distributed, and there are so many more companies and market verticals where these applications will work.”
A complex business
While the technology sector has expanded, it is still a complex business, Pitts said.
IVM has its own back-end software, its own control boards and three data centers that enable the company to customize solutions for clients.
An employee who needs to refresh a laptop will message a call center and be given a locker bin number. The employee uses their ID badge to access the locker and switches the old laptop for a new one. The process takes five to 10 minutes.
"As opposed to the days that it might have taken them to drop their laptop off at a help desk,” Pitts said. "They can just go get the products they need and move forward immediately with whatever their tasks are.”
Product suppliers also benefit
"Their (product) suppliers love it, too, because their suppliers can go to our reporting website, and they'll know that somebody at Facebook vended (removed) all these products," he said. "They know what products to ship to Facebook, they know what to bill Facebook. Facebook can put that bill against the usage report they get from us. It's a very streamlined distribution process that benefits everybody."
Another IVM customer, Intel, uses IVM's locker systems to dispense laptops to its employees.
"They have 130,000 laptops that they have to manage for their employee base,” Pitts said of Intel. "Every laptop has to be refreshed every 18 months.”
Hewlett Packard, another IVM customer, has a desk and a locker where an employee can plug in a laptop and get it scanned remotely to assess its condition. Depending on the results, the employee might be directed to access a new laptop from an adjacent locker.
"For them, it's all about the frictionless environment for their employees, and the seamless flow of their entire distribution chain," Pitts said.
In addition to having IVM machines in its own facilities, Hewlett Packard has them in customers' facilities.
Competitive benefits cited
Pitts said IVM distinguishes itself from competitors in the industrial vending space like Fastenal that only offer their own products in their machines.
"That's very easy for us to overcome from a sales perspective," Pitts said. "We're not affiliated with a (product) supplier.” Many worksites prefer to have the option to source products from more than one supplier from supply vending machines.
"The (customer) buyers sometimes have to get products from different places," Pitts said. There can be different OSHA requirements for different locations within a facility, for example, as well as internal company requirements.
Pitts said that IVM does not use cloud technology for security reasons. The company maintains its own servers in its data centers.
While technology has delivered more efficient systems for dispensing industrial supplies at worksites, the technology sector itself has become a major market for these systems. And as companies in many industry sectors embrace the benefits of these systems, kiosk technology providers have yet another growth opportunity.
(Image courtesy of Industrial Vending Management.)
Elliot Maras Elliot Maras is the editor of KioskMarketplace.com and FoodTruckOperator.com.