The Growing Wave of Decentralization in Industry Verticals and How the Vending Business Can Benefit from It
Globalization has caused a dramatic shift in international commerce since it has made it possible to decentralize supply chains for completed products, in addition to enabling the trading of those items themselves. Industry-neutral, increased profitability and more effective product delivery have resulted from this supply chain fragmentation. This article explores how the decentralization of vending machines may signal a turning point for the vending machine sector as a whole. However, let us first demonstrate how this tendency has spread to other sectors and produced notable outcomes.
In order to provide automated, unique vending experiences, Smart Vending Machines integrate advanced technologies such as IoT sensors and AI algorithms. These machines also enable cashless payments, customized product suggested changes, and real-time inventory management, which improve productivity as well as comfort for both operators and users.
A Case Study of Decentralization on the iPhone
Ever wonder how Apple produces the highly sought-after iPhones and other products in its lineup? These iPhones are not always “manufactured” in the US, despite what the packing boxes claim, saying that they are “Designed by Apple in California.”
An iPhone, like other mobile phones, is made up of many parts, the majority of which are produced globally. All of these components, which come from about 200 different firms, are made by manufacturers that specialize in that particular field. For example, Qualcomm and Sony create cameras, with Japan serving as their principal production base, while Bosch Sensortech from Germany supplies accelerometers, etc.
Since Apple is a US-based firm, one would think that it would at the very least assemble these individual components at its many facilities around the country. However, Apple has also contracted with firms like Foxconn and Pegatron to handle the assembly.
Although both of these businesses are headquartered in Taiwan, they have production and assembly plants in some of the world’s most competitive economies, like the Czech Republic, Malaysia, Thailand, South Korea, and others, where they can benefit from economies of scale and low labor costs. These factories then send the assembled goods all around the globe.
The fact that each component of the iPhone—and consequently, other Apple products—is made by specialized companies sets them apart from the competition. These parts function together to produce a mobile phone that meets and sometimes even exceeds customers’ expectations while also being optimized for optimal performance.
It would be incorrect to assume that this trend of decentralization in supply and production is exclusive to US-based businesses. However, even the World Trade Organization recognizes the concept of “comparative advantage,” according to which nations can focus on producing the goods and services that maximize the use of their own resources, and then exchange these goods and services for those that other nations produce most effectively using their own resources. This makes it possible for any nation to manufacture goods and services at the lowest feasible cost and get goods and services in return at the lowest feasible rates. If a nation had attempted to produce every commodity for local consumption, this would not have been feasible.
Decentralization’s Range in the Vending Machine Industry
The story above demonstrates that the decentralized vending machine trend is here to stay in all national and international industrial verticals. Being a “jack of all trades” has shown to offer major benefits in terms of utilizing industry knowledge in specialized fields and maintaining control over the whole supply chain and manufacturing process. The vending machine sector, which has a high initial capital need, may benefit from this method to reduce expenses and reach break-even or even profitability more quickly.
Unknowingly, the vending machine itself is the fundamental element of the vending industry. Similar to how iPhones are made, vending machine hardware and software components may be purchased from specialized vendors and combined to create a fully working, “smart,” vending machine. One may get the outer +body from producers of metal units. To ensure that the consumer has a positive interaction experience, a professional screen maker may provide the screen that they need for a better graphical user interface and resolution.
Similar to this, a microcontroller fabricator sells the Vending Machine Controller (VMC) board, which manages all of the peripherals of vending machines, including motors, lights, temperature management, coin and cash collecting, etc. In this approach, the decentralized hardware and software components may work together to produce a vending machine that satisfies high quality requirements and offers significant cost savings to the firm that manufactures vending machines.
Now, if we go even further into the vending machine industry’s value chain, we discover that separate parts are offered at different points throughout the chain in a segregated manner. First and foremost, installing vending machines is the primary capital needed for a firm that sells them. A vending machine operator may now choose to rent the machines rather than purchasing them and then looking for key spots to place them. Furthermore, these devices may even be the ones that are now in place at key sites that generate income. All the operator would have to do to run these machines and earn a healthy profit would be to purchase the franchise rights.
Depending on client traffic and preferences at that specific location, the second stage of a vending machine business’s value chain would include filling and replenishing the machine with items. Although the operator’s business acumen and sales forecasting are the only factors that matter when choosing what kind and amount of goods to fill a machine with, some information about the location’s client profile and real-time shopping experience may be helpful.
Nonetheless, it is relatively simple to outsource the vending machine product stocking to specialized delivery businesses, as they already have the resources, staff, trucks, and network necessary to do this duty carefully. Food technology and e-commerce enterprises are already using delivery startups like Zypp Electric, Dunzo, and Delhivery for last mile delivery. The vending machine operator may pick up items from the warehouse and put them in the machines by using their speed and competence, which eliminates the need to hire permanent workers for this operation.
The next, and maybe most crucial, link in the value chain for this company is accepting customer payments for the goods and then retrieving cash from the vending machine. An increasing number of vending operators are now choosing to use just digital payments for their machines as this demands specialized staff in addition to being labor-intensive when it comes to collecting and depositing cash.
Having just cashless transactions available no longer implies losing out on business. Actually, it only reduces the cost of acquiring new consumers and raises their level of pleasure, which encourages customers who would normally need to have precise change in order to purchase a certain product to make impulsive purchases. Here, payment gateways may be included into the software of smart vending machines to integrate fintech solutions that are currently on the market, such as digital wallets, UPI, card transactions, etc. This would eliminate the vending machine operator’s cash management expenses completely!
A Vending Machine Business comprises overseeing and running automated retail spaces that dispense a range of goods. These machines are convenient in busy areas, but maintaining them requires maintenance, inventory control, and smart placement to guarantee earnings and client happiness.
Technology Aggregator Is Required for These Decentralized Activities
When a supply chain is decentralized, each of these discrete parts may work together to save overhead and operational costs for the vending machine operator, increasing their business’s profitability. Nonetheless, a noticeable issue that the operator of the vending machine may have as activities get more decentralized is the challenge of monitoring every single part and making sure that they are coordinating to guarantee seamless and ideal outcomes.
Here, the existence of a technological platform that functions as an aggregator of various decentralized activities and components offers significant advantages to both the supplier of these decentralized goods and services as well as the owner of the vending machine.
With the help of this one-stop shop, the operator of the vending machine can keep an eye on and guarantee the prompt delivery of services, maintenance plans, inventory control, and—above all—adjusting product offerings in response to customer insights obtained from the real-time sharing of data resulting from performing these tasks.
Conversely, the product and service providers stand to gain from the platform’s automatic notifications whenever an immediate action is required. For example, if a vending machine quickly runs out of a specific product, the delivery partner must make sure that, in accordance with the vending machine operator’s instructions, additional quantities of the product must be delivered during the next restocking exercise.
At Linkitsoft, automated warning system for planned or unscheduled maintenance needs helps anticipate and, as a result, prevent any delays in service delivery that might negatively impact the customer’s happiness with their purchase.
