Executive Briefings

RFID, Wireless, Bar Code & Voice: The Promise of Mobility in Order Fulfillment and Distribution

Analyst Insight: The performance benefits of mobile devices and voice technologies in order fulfillment are well-established, and their usage is a hallmark of Best-in-Class performance. RFID, however, is still maturing in this space. What it does provide, especially for manufacturing and transportation, is added traceability both inside and outside the warehouse.

At a time when large-scale investments in distribution infrastructure are under intense scrutiny, the focus for many members of Aberdeen's research community has shifted toward technologies offering quick improvements in process efficiency and labor productivity. To that end, mobile devices (39 percent currently have them, 18 percent plan to) and voice technologies (11 percent have, 14 percent plan) were two of the top three technologies cited for planned implementation over the next two years. Companies utilizing these technologies have noted impressive performance relative to their peers, achieving greater inventory and picking accuracy, as well as faster order-turnaround times.

For companies using RFID (20 percent have, 18 percent plan), the main benefit is traceability.  They are much more likely than their peers to be able to track components as they are assembled into final products, and are also more likely to have real-time tracking of inventory attributes (lot number, style, color, etc.).

While mobile devices, voice technologies and RFID all showed benefits for improved real-time inventory visibility and transaction confirmation, when it comes to day-to-day process efficiencies, voice and mobile devices lead the way. These results are not entirely surprising, since those companies with voice and mobile solutions are also more likely to employ advanced fulfillment methodologies for picking (example: batch, zone, wave) and replenishment (example: min/max, hot). They are also more likely to employ task interleaving to marry the two together.  Note that for higher-performing companies these technologies were used in combination, gaining the benefits of each individual solution type.

Aberdeen's end-user community views voice and mobile devices as offering the shortest payback period among potential warehouse investments.  The expected payback period for RFID, however, exceeds that of material handling equipment purchases, and is second in length only to the initial implementation of a warehouse management system.

The Outlook

For 2010, the continued focus will be on projects with lower up-front costs and shorter payback periods, which both play to the advantage of voice and mobile solutions. Since the performance case for RFID is not yet as established as it is for the other two technologies, the short-term draw will continue to be its tracking capabilities. It offers great benefit for mature operations looking to extend visibility in areas like yard and container management.

At a time when large-scale investments in distribution infrastructure are under intense scrutiny, the focus for many members of Aberdeen's research community has shifted toward technologies offering quick improvements in process efficiency and labor productivity. To that end, mobile devices (39 percent currently have them, 18 percent plan to) and voice technologies (11 percent have, 14 percent plan) were two of the top three technologies cited for planned implementation over the next two years. Companies utilizing these technologies have noted impressive performance relative to their peers, achieving greater inventory and picking accuracy, as well as faster order-turnaround times.

For companies using RFID (20 percent have, 18 percent plan), the main benefit is traceability.  They are much more likely than their peers to be able to track components as they are assembled into final products, and are also more likely to have real-time tracking of inventory attributes (lot number, style, color, etc.).

While mobile devices, voice technologies and RFID all showed benefits for improved real-time inventory visibility and transaction confirmation, when it comes to day-to-day process efficiencies, voice and mobile devices lead the way. These results are not entirely surprising, since those companies with voice and mobile solutions are also more likely to employ advanced fulfillment methodologies for picking (example: batch, zone, wave) and replenishment (example: min/max, hot). They are also more likely to employ task interleaving to marry the two together.  Note that for higher-performing companies these technologies were used in combination, gaining the benefits of each individual solution type.

Aberdeen's end-user community views voice and mobile devices as offering the shortest payback period among potential warehouse investments.  The expected payback period for RFID, however, exceeds that of material handling equipment purchases, and is second in length only to the initial implementation of a warehouse management system.

The Outlook

For 2010, the continued focus will be on projects with lower up-front costs and shorter payback periods, which both play to the advantage of voice and mobile solutions. Since the performance case for RFID is not yet as established as it is for the other two technologies, the short-term draw will continue to be its tracking capabilities. It offers great benefit for mature operations looking to extend visibility in areas like yard and container management.