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Bob Carver, vice president of cloud inventory solutions with DSI, discusses the challenge of enabling full inventory visibility of product once it passes beyond the four walls of the warehouse.
SCB: Where are the big challenges in inventory visibility these days?
Carver: The biggest challenge is seeing where inventory is outside the four walls of the warehouse, particularly in the field. That crosses all industry segments — it’s a retail problem, a construction problem, a utilities problem. Once inventory has left the warehouse or regional distribution center, how are you monitoring it? It could be in a service van, or out in the middle of nowhere with no cellphone or Wi-Fi coverage. We see that particularly in heavy industries with disconnected operations. Once you're not tied back to the mothership, whether that be an ERP system or some other supply-chain execution system of record, you don't have the capability to see inventory anymore. That can lead to order-to-cash problems. Inventory may be decremented out in the field, but it could be 30 days before it gets back to the corporate office that they depleted an electrical transformer or a couple of utility poles from a former yard. So there’s a buildup of cost and risk, and a lack of visibility.
SCB: Many companies have talked about the challenge merely of achieving inventory visibility across their entire warehouse or distribution-center network — within the four walls.
Carver: We see different takes on that. There are companies that are doing an extremely good job of tracking all their product within their distribution centers, regional D.C.s, and maybe their micro-warehouses out in the field. And others are struggling with that. The technology is there within the four walls to maintain extremely good visibility. But you still have omnichannel-type challenges. If you know there are two shirts at a store, but happen to be grabbing one off the shelf and somebody orders it online, it's going to come up as a back order, even though they thought the product was there when they were ordering. But most companies are doing fairly well in this respect. It's when inventory gets outside of the warehouse that companies are losing visibility and tracking.
SCB: Does it just drop out of sight for a while?
Carver: There are places where it drops out of sight. I've been in healthcare facilities where, when the product gets to the receiving dock at a hospital, it magically appears in the nurse's station. It’s been received, but for a time is somewhere within the facility. And in a lot of cases, especially in the oil and gas and construction industries, there’s virtually no tracking as inventory gets out into the field.
SCB: What type of technology can address the problem?
Carver: The capability to run in a disconnected kind of environment, using mobile applications that can run offline, is something that's emerging within the industry. It provides inventory visibility that you can later sync. Next time the guy drives back into town and goes to a coffee shop for lunch or gets Wi-Fi in his hotel, he can use that application to upload what he's done offline during the course of a day.
SCB: Can electronic logging devices, which monitor driver activity, be of help in tracking inventory?
Carver: They definitely can, but if all your tracking is a truck, and you're not actually tracking that piece of inventory, you've got a problem. A lot of the solutions for monitoring field inventory outside the walls of the warehouse have been developed to address a particular need. The folks who are doing it right are trying to figure out exactly what's the best way to know the position of that inventory: the state it's in, whether it's authenticated, has gone through a blockchain process, has been subverted, and what is the actual location, and then building applications that allow you to see that product moving throughout the field. When you’re tracking trucks, whether through GPS or other technologies, you’re seeing an inventory bucket move. That's a different form of visibility, and in many cases it’s financial in nature — you know the dollars are moving, but you don't know that the discrete inventory piece is moving.
SCB: You seem to be suggesting that up to now, companies have been putting a lot of Band-Aids on the problem.
Carver: I think so. A lot of solutions in the field right now were developed for the warehouse, and are constrained by thinking strictly of receiving through shipping. The warehouse of the future doesn't have four walls anymore.
SCB: To what extent does it still require a human being to enter the relevant data, versus the system picking up the data automatically?
Carver: We’re seeing the advent of technology, especially with the Internet of Things, artificial intelligence and radio frequency identification, that can capture that information automatically. But that’s not the predominant portion of what’s going on. A lot of tracking is still done through handheld scanning or some type of mobile application device, whether it be a PDA, smartphone or an iPad.
SCB: Are all of those physical devices are in regular use today?
Carver: Yes, it’s all of the above. There’s an emerging trend in our industry of BYOD — bring your own device. It’s funny how long a device lasts when the employee actually owns it, and the company's deploying an app for them to use.
SCB: Are there potential security problems with those devices?
Carver: There are. A lot of it’s going through the cloud, and people are still kind of worried about that. But according to some recent Gartner statistics on security in the cloud, around 95 percent of breaches were happening with on-premise-based applications. And two-thirds of those were caused by the user — it wasn't a deliberate attack. In our world, cloud security has become as strong as on-premise. So the use of a cloud-based handheld terminal or smartphone to gain access to corporate data and systems is readily accepted at this point by a lot of CIOs.
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