In our industry, we clearly see the effect of declining disposable income in our same store sales analysis. Now a new element threatens to take a bite out of revenue.

There is a rapidly growing movement underway to take a new the workweek. Employees all across the country are currently submitting petitions to employers in attempt to gain approval of four-day weeks and telecommuting. They are citing more the just gas savings, here are just a few points that are being laid out very convincingly.

The 4-Day Work Week would mean less traffic congestion.

The 4-Day Work Week would mean fewer auto accidents each year.

The 4-Day Work Week would mean a reduction in absenteeism

The 4-Day Work Week would give us more time for family

The 4-Day Work Week would decrease labor costs

The 4-Day Work Week would decrease operational costs

The 4-Day Work Week would mean a reduction in the cost of childcare

These employee proposals also stress the use of internet as a tool to scrap the antiquated notion we should all be at the office from eight to five on Monday through Friday.

The revenues in the business and industry channel for food service, vending and OCS will decline in direct proportion to the decreased time employees spend in their traditional work place. This is an iron-clad certainty.  I suggest that you keep your ear to the ground at all accounts; you may have to adjust your revenue forecast and identify actions needed to protect the bottom line now.

Rather than serving as opportunity for providing direction, growth and alignment, it is more often seen as a necessary evil.

The Aberdeen Group surveyed over 600 individuals: while 95% indicated conducting regular performance reviews, only 11% indicate satisfaction with the process in their organization.  There is clearly a disconnect between the concept of performance management and it’s successful execution. 

Aberdeen reported that two key performance criteria defined ”Best in Class” Companies (BiC) with regards to performance management:

1. Improved bottom line results: BiC companies experience a minimum profitability growth of 10% or move over last 12 months.
2. Increased employee retention rates: 94% of BiC companies increased or maintained stable employee retention rates over the last 12 months.

Coming in future postings:

• What are top five (5) pressures driving performance management?
• What are strategic actions necessary to achieve performance management goals?
• What is the connection between productivity, turnover and job match?

Have a great week; back to you soon!

Sincerely,

Dave McCaffrey

PredicitiveAssets

(866) 584-9551 (toll free)

I agree that the quality and variety of vended products has vastly improved since the 60’s.   Too bad the industry lost most of the ideal venues for the application for vended food and beverage services.  Ironic isn’t it?

While my Dear Friends in the traditional full line vending business are agonizing over how to sell candy bars, potato chips and soft drinks profitably, something is going on in the background.

The self Service Revolution:

* 97% of consumers would use self-service to handle a transaction or service.
* 86% of consumers say they are more likely to do business with a company
   that offers the flexibility to interact using self-service.
*66% of consumers say the availability of self-service technologies
  creates a more positive perception of the brand.
*56% say their likelihood to use self-service has increased over the last
  12 months.

Speed, convenience and ease of use are identified most frequently by respondents when asked why they would choose self-service over personal assistance in each of four industry sectors:

* financial (faster-70 percent, more convenient-67 percent, easier-52 percent);
* retail (faster-68 percent, more convenient-64 percent, easier-52percent);
* travel (faster-63 percent, more convenient-61 percent, easier-60percent); and
* healthcare (faster-53 percent, more convenient-50 percent, easier-47percent).

Our industry was once the leader and innovator in the “unattended sale” concept.  Are we to be left behind in this major shift in retailing?

 *Sources of statistical data:Time Magazine, March 2008NCR Self Service Consumer Survey, 2008 

Do not look for a vending machine that cooks from scratch (as in, peels the potatoes, slices the carrots and braises the beef) anytime soon I foresee a couple of barriers this type of device:·        

Sanitation, temperature control and related food safety issues. ·        

Extended processes, even though automated, mean longer delivery cycles and the vending advantage is fast and convenient delivery. 

Vended products are not usually served up with candlelight and violins. Frankly,  I do not see the need anyway.  There are lots of vendable microwaveable packaged meals and sandwiches available that are of excellent quality.  

 Advances in the packaging microwavable foods have been a big plus factor for the quality of vended foods. Absence of clear, concise cooking instructions on the package can be an issue.  Failure to follow the heat and time instructions will adversely affect finished product quality.  

A little consumer education is always beneficial when new products are introduced.

Keep the new ideas coming……Best RegardsTom

1. Their learning skills (verbal and numerical capability) may not match those required to do their job: 

> If their learning skills are lower than required, the employee may literally not be able to do their job properly. 

> If their learning skills are higher than required, the employee may have communication problems or become bored with their job. 

2. They may not have the necessary unique behavioral traits required to do their job.  In other words, they may not fit into the culture of the job at your company.  

3.  They may not have the occupational interests that match those required by their job.  If their interests do not match those needed by their job, they will lose interest and become disengaged.    

There is a management axiom that says: “you can’t manage what you can’t measure’. 

Given that most current measuring standards are based on functional results (sales, profit, returns, etc) that are historic (they tell you what happened yesterday, not what will happen tomorrow), the scale to which an employee is being measured may not have anything to do with the employee’s success….or lack there-of in a job function.

To be able to manage your employees in a predictive manner, you need to be able to measure their learning skill, behavioral traits, and job interests.  Once you have assessed what may be causing their sub par performance, you will be able to manage that employee to increased productivity. 

I hope this information helps improve productivity and reduce turnover at your company.  Please let me know if you have any questions.

Sincerely,

Dave McCaffrey

profiles@predictiveassets.com

866 584-9551 (toll free)

Engineers, Machinists, Tradesmen in Short Supply

Because of an aging workforce and a new generation of workers entering other professions, engineers, machinists and skilled trade workers are the three most difficult positions to recruit for, according to Manpower’s annual list of “The 10 Hardest Jobs to Fill.”Baby boomers are starting to retire, which means many workers with traditional blue-collar skills are leaving the workforce, says Melanie Holmes, vice president of corporate affairs for the Milwaukee-based staffing giant. The survey, released Tuesday, April 22, covered 42,500 employers from 32 countries.The retiring boomers are compounded by fewer young people entering these fields. Less than 10 percent of college students in America are getting engineering degrees, Holmes says.The 10 Hardest Jobs to Fill are:

1. Engineers

2. Machinists/machine operators

3. Skilled trades (your Route Drivers?)

4. Technicians (your Machine Technicians?)

5. Sales representatives

6. Accounting and finance staff

7. Mechanics

8. Laborers

9. IT staff

10. Production operators

Technicians, sales representatives and accountants/finance staff also made it onto Manpower’s list.

Employers struggling to fill these vacancies can, in the short term, enhance recruiting efforts on college campuses and at technical schools and also emphasize the retention of older workers.

Longer term, Manpower suggests, employers should partner with local educational institutions and encourage students to enter these professions.

Nearly 25 percent of employers say they are having problems filling positions because of a lack of talent.

“Employers need to do everything they can to give opportunities to everyone who is willing or able to work,” she notes. “This includes the aging workforce, the younger generations, people of color and people with disabilities.”

Successfully recruiting young workers will depend on how well companies can cater to their specific needs. “This generation wants flexibility, they want to be innovative on the job,” Holmes notes. “And they want to have fun while they are at it.”

To minimize the impact on your company,

PredictiveAssets suggests you:

1. Modify your employment profile: Focus on learning skill, behavioral traits and occupational interests as opposed to education and experience.
2. Broaden your employment profile: Establish core competencies for all jobs in your company. Compare all applicants to all job functions, not just the one being applied for today.
3. Utilize accurate selection tools: Tomorrow, more than ever, you cannot afford to make a bad hire; use all available resources
4. Become an employer of choice: Job fit is much more important than compensation; do you have good job fit for all personnel at your company?
5. Finally, use broader advertising tools (i.e. CareerBuilder or similar online services) instead of local tools: a qualified applicant might be moving to your market next month!

For information and/or assistance with finding, selecting, hiring and developing your workforce, contact Dave McCaffrey at profiles@predictiveassets.com or 866 584-9551 (toll free).

 First determine how you can make more money in your accounts with a cashless solution.

• Price increases

I have been told that the average reduction in unit sales after a price increase is around 15% to 20%. I have seen time and time again when a cashless solution is implemented at the same time prices are increased, unit sales stay the same. As an example, you have a beverage machine that sells 100 units per week at $1.00 with a 6% sales tax and 10% commission and a case price of $15.00 (62.5 cents per unit). You raise the price to $1.25 and lose 20% in sales, you will gain $650 in annual profit. If you take the same scenario but install a cashless solution and maintain unit sales, you will see a $775 increase in profit after all the costs for cashless are taken into consideration. You will see an increase in profit of $940 if the account absorbs the processing and monthly service costs.

• Sell higher end items

I have visited operators who are using one machine to vend traditional beverage and snack items and other machines to sell higher end items such as energy drinks and teas and higher quantity snack items. By “mixing up” the pricing structure in a category, the price increase process becomes much easier as all items are not priced the same. Simply add new higher end items to maintain margins. Cashless will help you guarantee that you do not lose these high end sales due to the fact that the customer does not have the cash in their pockets.

• Have the account pay for part of the cashless expenses.

Many operators and bottlers are selling their accounts in such a way that the account picks up part of the expense for the addition of cashless to their machines. But the account must believe that there is a benefit for them to have a cashless solution on their machines. During the “price increase” meeting, explain to the account that we must go to $1.25 on our beverages. The convenience store down the road is at $1.39 plus tax., we only want to take price to $1.25 including tax.. We know how hard it is to buy something from a vending machine when the price is over $1.00. We have been thinking of installing a cashless solution using debit and credit cards for your employees (students, visitors). How do you think this could be of benefit to your employees (students, visitors)?

An answer you might get is that we have a young work force and they do not carry cash. Another might be that we would like healthier items in the machines but we know they tend to have higher prices. Another might be that we depend on the commission dollars and that a credit / debit card solution will allow you to sell higher priced items thus higher commissions for us.”

Your answer is “You are absolutely right in that this would benefit your people in these ways. Let me share with you our costs associated with implementing such a program. First the hardware cost is $???, the card processing fee is a certain percentage and our supplier charges a certain dollar amount per month for the cell phone and card settlement capabilities. If we pick up the hardware cost could you pick up the monthly fee and the card transaction fees? With the price increase, your commission dollars should stay at the same level if not go up after all the costs are taken into consideration.”

I know it is easier said than done, but I personally have been on these calls and I have seen it work first hand. Let me know if I can help you achieve the same results.

Hope to hear from you soon!

Regards,

Dave “Mac” McCaffrey

However, as a person involved in selling cashless vending systems, I can attest that there are benefits to vending operators. Vending operators who commit themselves to this over time are realizing a good return on their investment.

Selling your account on the benefits of a credit/debit card purchasing option will allow you to raise the price of your products and if done correctly, the account will be more than willing to pick up part of the cost of the card system.

What are the benefits of credit / debit card program for your customer?

1. The time to purchase an item is significantly reduced, especially utilizing the new “tap and go” cards. The reduced purchasing time allows the lines to move quicker providing your customer’s employees more time to enjoy their meal during their limited break time.
2. Employees are able to purchase a more variety of items even if they do not have the proper cash denominations. The benefit to your customer is increased productivity and morale as employees will stay within the facility for lunch breaks.
3. Verifiable on line sales tracking from total cash and credit sales down to the transaction detail level. Detail transaction information includes the transaction amount, whether the transaction was cash or credit, the time the transaction occurred and the purchased item’s column number. Information that you can provide to your customer if you wish.
4. For the commission conscious account, the sales increase due to the sales of higher end products, the higher amount of sales per transaction, the increase in multiple product purchases per transaction and finally the ability to offer higher prices for all items all comes down to increase commission dollars for the account.

The benefit for you, the operator, is that unlike normal price increases where unit sales go down, with a cashless option, your unit sales should go down less if not stay the same allowing for additional revenue. Unit sales will go up at locations where pricing remains the same. This will help to offset the costs for a cashless system in no commission situations where prices are at proper levels.

Determining which accounts are profitable for a credit/debit card vending program can be done by simple testing and a look at the demographics of the account. The younger generation is a proven user of credit/debit card purchasing options.

Locations where a younger population exists would be college campuses, entertainment venues such as amusement parks and movie theaters. Transportation and hospitality locations such as airports, train stations and hotels have been successful due the fact that customers who use these services are stronger users of payment cards. Corporate offices with a younger, higher than average income could be potentially profitable locations. Finally, health care facilities such as hospitals have also been proven as decent accounts for credit/debit card programs based on the percentage of card transactions versus overall sales. You should find that the percentage of card transactions to total sales will range from 15 percent to 50 percent with an average of around 20 percent.

I am interested in your comments and I would like to answer your questions on how to make a cashless program profitable for you. My background is in vending operations, equipment manufacturing, accountability software and cashless solutions. I look forward to hearing from you.

The good news is that there are more tools available to accomplish this nowadays. Loss prevention is my specialty, and I look forward to sharing my insight with vending and foodservice professionals.

Vending – Cafeteria Loss Prevention has been recognized for what it can be, in company after company: A significant residual Profit Enhancement reducing the Cost of Goods1% to 3% in two to four quarters, remarkable results that has become part of the day to day operating reality and the culture of these companies.

As Pogo once said, I have seen the enemy and he is us. And so it is with the progressive path an incorrigible segment of a Vending company’s employees will climb.

As the AM blogger for Loss Prevention I hope to facilitate the internet discussion on a slice of the business that can transform the bottom-line.