In the US, CMS is a leading manufacturer of snack, food, cold drinks and combination vending machines, while in the UK CMS designs and manufactures highly regarded hot beverage machines.
CMS moved into the UK as recently as 2000, when it purchased the successful Stentorfield organisation, and the following four years saw some impressive growth, as the company rode on the back of a buoyant UK vending market.
The major US-driven company review coincided with the appointment of Andy Porter as European Managing Director – with over 16 years’ experience in the vending industry. Andy recalls: “In 2005, CMS UK was a successful business which was facing a couple of issues. The market for machines was becoming more European, and the UK, and to an extent some if its larger European neighbours, were showing signs of saturation. Coupled with that, CMS had historically looked to the UK market for almost all of its revenue.
“We took the decision that, while the UK would remain CMS’ core market in Europe, it needed to become less UK-dependent, and look to the fast-growing emerging markets in Europe for growth.”
For some time, CMS has had a sales operation in Germany, reporting to Chippenham, and successfully handling sales in France, Germany and The Netherlands. This organisation has now been strengthened and put on a firm platform for growth into the important emerging European markets.
Breakthrough year
“2006 was really a breakthrough year”, explained Andy. “We started out with National Vendors in the US, CMS in the UK, plus NRI, the company’s successful coin payment systems business.
“That year saw the acquisition of CashCode, the leader in note validators, based in Canada. Then, in June of the same year, we purchased Telequip, a major designer and manufacturer of coin dispensing systems.
“Together with NRI, these companies created a whole new payment systems division, providing the latest technology and high level of service to the vending, gaming and transportation industries. It is a real usp to us, as a group.”
Today, this is a highly successful business showing strong product development and aggressive sales growth. From the vending perspective, the efficient payment systems offer incorporating NRI and CashCode products, was key in a recent major order from Russia.
The CMS group also includes Streamware, a specialist in vending management systems, which gives valuable added strength to CMS in the US in this fast-developing area.
Automatic Products
In 2006, Crane also completed the important purchase of Automatic Products (AP), the strategic rationale for which came from the US, where AP equipment was sold through distributors, unlike in the UK where the company sold direct.
“We ran AP as a separate organisation in the UK for a year”, explained Andy. “However, the duplication in premises and resources plus the fact that customers were sometimes confused by having to deal with two sets of people, meant that we fully integrated the businesses in the autumn of 2007. We did, however, retain most of the front-end people and have been able to increase the level of sales and technical support provided to our customers in the UK”
AP’s Studio Premier beverage machine is marketed alongside CMS’ Evolution, and the range of snack and food machines is currently in the process of being consolidated.
“One year on from the integration”, said Andy, “we have been able to invest in the UK market, while reducing costs in-house, thereby achieving a better and more stable business”.
Dixie Narco
In October 2006, acquisitive CMS surprised many with the purchase of Dixie Narco, a company that was lacking financial strength and suffering from being a non-core, small part of a big multinational.
“We started work on a new version of the BevMax 2 machine in 2007”, recalls Andy, “a task which involved no fewer than 170 design modifications, taking the product forward. The new BevMax 3 machine has been approved by both Coca-Cola and Pepsi in the US and we are now 100 per cent confident that it is the fastest, largest capacity and most reliable machine of its type, and we handle all BevMax 3 sales across Europe. It is great to be able to offer the BevMax 3 alongside the Shopper 2 food machine, both of which are recognised as ‘best in class’ worldwide.”
Product development
The beginning of 2008 saw CMS concentrating on growth, with a far broader range of machines and associated products like payment and vending management systems. Today, the company shows signs of real vigour with a number of new product developments in progress across its cold drinks, hot beverages and snack ranges.
There will be a new product to reflect the increasing relevance of the large 12 oz cup; and green issues and power saving will feature strongly in all new products. And while keeping them close to their chests, our hosts did reveal that significant developments are being targeted at AVEX.
“In 2009 AVEX and EU Vend, held in Germany, will be very important shows for us,” said Andy. “Growing the business both inside and outside of the UK is fundamental to our long-term stability and success and we have already started on the road to achieving our objectives. For example, three years ago, the business was split approximately 90 per cent UK and 10 per cent rest of Europe. Today the proportion is approximately two-thirds UK and one-third rest of Europe. Importantly, though, business in the UK is standing up well, and the increase in sales abroad is not at its expense”.
Factory
VI was given a factory tour by Simon Heath, appointed this year as Sales Director UK. Previously Managing Director with Apollo Vending Services, Simon is also no newcomer to vending, and shares the enthusiasm shown by Andy Porter and, to be honest, everyone else we came across in Chippenham.
Throughout the factory and offices there are Visual Management Boards which spotlight key topics; Safety, Quality, Delivery and Cost. These are completed by team members on a daily and hourly basis to highlight and resolve issues fast. This is part of the Crane Operational Excellence (OPEX) programme which is an extension of the proven method based on the Toyota Production System. Says Simon: “It is really a case of lowering the water level to expose the issues”.
OPEX considers the complete supply chain from the external supplier to the internal and external customer. The result is a well defined and continuous improvement strategy that provides immediate as well as long term improvement results.
CMS manufactures machines from sheet metal, through pressing, cutting and de-burring to a very flexible assembly system, again adhering to the principles of Lean Management.
Currently most UK orders are delivered within 14 days and weekly output is continuously adjusted, dependent on demand and by the variation of labour and parts inventory. Support facilities in place include customer services and technical support service sections, plus an impressive graphics department which designs or assists customers in the creation or adaptation of graphics for machines.
Simon says: “Our graphics design service is a way for our customers to differentiate themselves in the market and provides a great marketing tool to help them win business and deliver client satisfaction.”
Product Configurator
CMS’ focus on customer service is further underlined this summer with the launch of the ‘Multi-lingual Product Configurator‘, a new online ordering system.
Customers in the UK, Germany, Spain, France and Russia can use the website to order vending machines in their native language. Portuguese and Turkish versions are set to follow.
“Our Product Configurator has been in development for some time now and we’ve worked with a number of our customers to trial the system before its formal launch”, says Simon. “Over 70 per cent of our UK customers are currently using the system successfully.
“Success in Europe, where our sales are growing at over 25 per cent year on year, has encouraged us to develop a version with multiple language options and we’re confident that this will allow international customers to place orders even more quickly and easily.”
One of the CMS customers that have contributed to the ongoing trials of the Product Configurator is Bunzl Vending Services. Feedback from Karen Nicholls, Administration Supervisor, has helped CMS to thoroughly address the needs of its customers and to create a system that’s easy to use.
“I worked with CMS when they were piloting an earlier version of the Product Configurator and the new system is great to use. It cuts out any opportunity for information to be misinterpreted and does away with the need for faxed confirmations.
“I can always call the sales team to check on details if required but typically I do not need to. It’s brilliant and I’ve not experienced any problems with it.”
Results for all to see
Impressive as the CMS story is, it can only be as good as the results. Andy Porter revealed that against a background in which UK sales were growing on a conservative level, sales overseas in 2006 were 20 per cent up on the previous year; in 2007 the figure showed a 40 per cent improvement on 2006; and currently the figure for 2008 is already between 20 and 30 per cent better than 2007.
“The benefit to customers from all this investment, development and growth”, explained Andy, “is that CMS is able to react faster to peaks and troughs of demand, and maintain a superior level of customer service.
“Worldwide, CMS now has some 200 engineers and customers can benefit from their varied and in-depth experience. I believe that, aligned with our major investment in customer and technical services, this places us in a very strong position in the industry.
“While the current economic situation in the UK and Europe is challenging and unlikely to change in the near future, I am optimistic for the future. Three years ago, we were really a UK business with a sole UK focus. Today, while still recognising the UK as our core market, we also have a real and significant focus on the rest of Europe.
Stronger
“CMS worldwide is becoming stronger each year and we are very confident that we will continue on our journey over the coming years and successfully reach our ultimate goals.”
