Four Square worked with a number of different companies to handle the logistics, including the transportation and the installation of the vending machines.
This meant that the transportation——carried out via a transportation company, and the set-up of the vending machines——handled by Four Square technicians, were two very separate processes. The result: doubling of costs and complicated coordination. When a vending machine required maintenance, the organizational efforts were even higher and additional costs were incurred.
In addition, the separation of transport and installation also caused Four Square's customers great inconvenience.
Four Square turned to UPS Supply Chain Solutions, a business unit of UPS, which had already been transporting and installing its vending machines. Today UPS manages the entire lifecycle of the vending machines.
"We were looking for a logistics company with a proven track record that was able to provide a cost-efficient solution. We also
needed a partner who could offer our customers the same level of service that we promised. The only company able to satisfy our individual needs was UPS," says Michael Fuchs, Four Square's director.
The service includes delivery, installation, instructions on use, technical advice, repairs, returns, refurbishment and recycling.
UPS stores the machines that arrive in Germany from the United Kingdom in its warehouses. Once an order is placed, UPS specialists customize the machines according to customer demands. The machines are loaded with the required products, they are programmed to discharge the appropriate amount of water for each drink or soup, and the correct keys are assigned to each beverage.
Finally, the machines are transported to their location, where they are installed by two UPS employees. Once the machines are connected, the cooling systems are checked and users are briefed on how to operate them. Old vending machines are collected at the same time. Once back at the UPS facility, the old machines are classified according to their maintenance needs. Some machines that can be reused are refurbished; others are taken apart and recycled.
In addition to handling the machines themselves, UPS also takes care of administrative tasks such as organizing deliveries with Four Square customers.
As a result, Four Square now has a single contact for all its logistics needs. Because UPS handles the entire lifecycle service for vending machines, the company is capable of giving Four Square increased visibility into its supply chain.
On-line Grocers: Big Business In The Big Apple
Who: Fresh Direct, Long Island City, NY, is an on-line grocer serving more than 75,000 consumers in Manhattan.
Why: Makes on-line grocery shopping interesting again.
After the demise of Webvan, the on-line grocer that lost more than $1 billion dollars before it went belly up in 2000, there were many who believed that home delivery was not going to work for food. But Fresh Direct is taking a different approach. The company, which operates out of a 300,000-square-foot facility just outside of Manhattan, has learned from its predecessor's mistakes——namely, ramp up slowly, invest in the right technology, offer prices between 10 percent and 35 percent below market, and make sure your customers are completely satisfied. So far, it appears to be paying off for Fresh Direct. It's currently adding about 2,000 new customers each week.