Xcel Energy Reduces High-Use Consumables by 30-35 Percent Industrial Vending Eliminates Stockouts, Purchase Orders

Power generation

Apex Supply Chain Technologies Case Study Xcel Energy reduces high-use consumables by 30-35 percent Industrial vending eliminates stockouts, purchase orders

Xcel Energy, which serves more than 5 million natural gas and electricity customers in the U.S., is no stranger to industrial vending. They took the plunge several years ago, but were plagued by high program costs, long repair lead times, and other problems that arose from dealing with a vendor that wasn't familiar with their daily operations.

Easy to use, implement and afford But the new generation of industrial vending systems are easy to use, easy to implement and easy to afford. Industrial distributor Fastenal’s FAST Solutions program incorporates Apex Supply Chain Technologies’ next-generation Connect Installation and implementation of industrial vending by Fastenal and its technology n’ Go™ software, in which FAST provides partner, Apex Supply Chain Technologies, went “quickly and without a hitch” at Xcel technology and stocking services. Energy facilities, including at its Sherburne County Generating Plant (above). The sys- So when Xcel Energy heard that Fastenal, tem has reduced MRO spend and increased productivity at several Xcel Energy facilities. one of its biggest MRO suppliers, had launched its own vending solution, they BREAKTHROUGHS "After our second plant installation, we were eager to give it a try. didn't have time to train employees be- At the time, Fastenal's industrial vending & BENEFITS fore the weekend,” he said. “But when program was just getting off the ground. we came back on Monday, the disburse- In fact, for the initial Xcel site installation, Challenges ment report was already seven pages Fastenal had to utilize two machine pro-  Over-use of high-use MRO sup- long — apparently they didn't need any totypes from a trade show it recently plies training." held for customers.  High MRO spend Still, according to Xcel's Energy Category  Excessive “walking and waiting” Savings from PPE to grinding discs Sourcing Manager Doug Johnson, "The for supplies A third plant installation brought the implementation went quickly and with-  Downtime, loss of production total number of Edge 5000 units oper- out a hitch." ating at Xcel to 22. One reason is that the Fastenal-branded Solution The machines more or less function like Edge 5000 vending units are powered by  Apex Edge 5000 Industrial Vend- snack vending machines, except that Internet-hosted software (no MS Win- ing System they dispense industrial products – dows), meaning that Xcel Energy doesn't Results everything from safety glasses and ear need to install or manage any software. plugs to grease guns and grinding discs.  Reduced MRO spend Once the machines were configured and Optional Edge AutoStore locker units connected to the Internet, Xcel managers  Higher productivity control larger products like aerosols, were able to view real-time inventory  No purchase orders kneeling pads, and hard hat liners. and usage information on their PCs.  No out of stock situations Xcel managers are able to set controls And training was also never an issue,  No overstock that limit what each according to a Fastenal energy account  No hoarding employee can access and specialist. how much they can vend 

Industrial vending program saves time, money for Xcel Energy

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how much each can vend over time. When an employee needs product, he or she swipes an ID badge, and, if the trans- action is authorized, it is tracked by the system. Employees can also be prompted to en- ter in certain information — for example, their department and/or project code – enabling managers to view usage and spending according to these criteria.

Growing the bottom line Apex’s Fastenal-branded, Fastenal-stocked industrial vending machines ensure that sup- What’s the bottom line? As a result of plies are always in stock at Xcel Energy sites, while out of stock situations are eliminated. About Xcel Energy this newfound control and visibility, Xcel at one of its service centers. Energy has been able to its reduce con- Perhaps the best proof of Xcel’s belief in Xcel Energy offers a comprehensive sumption of certain high-use products by the program is that it now has 10 sites portfolio of energy-related products 30-35 percent. with both Edge 5000 machines and Edge and services to about 3.4 million elec- It's not about creating a situation where AutoStore lockers. tricity customers and 1.9 million natu- 'Big Brother' is keeping an eye on the ral gas customers. employees to keep them from stealing; A ‘win-win’ for end-user, distributor Backed by aggressive sales and mar- The company has regulated operations it's about forcing people to make less keting campaigns, the FAST Solutions in eight U.S. Western and Midwestern wasteful usage decisions. In this econo- program is providing huge benefits to states — Texas, New Mexico, Colorado, my, if you can help a company reduce Fastenal. North Dakota, South Dakota, Minneso- consumption by 30 percent, that means It is driving significant business growth ta, Wisconsin and Michigan. Xcel Ener- they can keep more employees and and also new account acquisition at a gy owns more than 34,500 miles of hours, which is obviously hugely im- time when the total MRO marketplace is natural gas pipelines and the company portant for folks on a personal level. shrinking. has revenue of more than $9 billion Fastenal gained business through show- annually. Less walking and waiting Additional benefits for Xcel include less ing customers how to be more efficient, Xcel Energy employs over 11,000 peo- employee walking and waiting time and thereby strengthening its ties with cus- ple. better use of crib labor, plus a paperless, tomers and increasing its overall sales. Fastenal and Apex technology have Its facilities include 14 coal plants, 25 automated ordering process. proved superior to the systems previous- natural gas plants, two nuclear plants, When stock for a certain item becomes ly utilized by existing vending customers. 27 hydro plants, four oil plants, three low, the machine sends an order to the “In some plants we had the tool busi- Refuse-derived (RDF) plants and two local Fastenal store for replenishment, ness,” said one Fastenal rep. wind facilities. eliminating out of stock situations and even purchase orders. “Vending has helped us pick up the PPE More information: Based on the success of the program, volume, since we’re already there and www.xcelenergy.com Xcel Energy recently installed five more doing the work.” Edge 5000s with Edge AutoStore lockers ©2012 Apex Supply Chain Technologies Ltd. Worcester, UK +44 (0) 1905 388 194 www.apexsupplychain.com