Companies want to know: Why can't we just track everything? Scott Schwalbe, CEO of NimbeLink, explains why that isn't a reality today, but is sure to become one in future.
SCB: Why isn't everything tracked today?
Schwalbe: When you talk to customers in the supply chain, they want to track everything. It comes down to cost. In order to track something that's moving around and doesn't have any power, how do you get the cost structure down so that you can do that within your battery life? At some point we'll have 50 billion things in the world tracked. It's just going to be a matter of the technology converging, and dealing with the power constraints.
SCB: Are we talking about tracking what goes on in the four walls of a distribution center, or is it also in transportation?
Schwalbe: Yes to all of the above. Literally everything.
SCB: How granular does it get these days, with regard to what’s in the container?
Schwalbe: In the warehouse, it's down to the package on the pallet. When product is inside a container, typically it's at the pallet level. But with software and the right infrastructure, you could scan the things and then scan the pallet to the container. It's just a matter of how that infrastructure is set up. Again, it’s just a matter of the cost.
SCB: What does business want to track, and why?
Schwalbe: There are three key business reasons. The first is optimizing your own assets. If you know where they are at all times, maybe you can increase turns and the number of assets that you use without building more, and having more on your balance sheet. Also, things get lost or stolen, and you want to track that. The second key area is customer satisfaction. If you can tell your customer when an order is going to get there and what condition it's in, that's a huge value add. It’s especially important if you’re dealing with pharmaceuticals or food. The third potential impact is whether you can generate a new revenue stream within your business. If you're able to track not only the location but the condition of product, can you charge customers or others for access to that data?
SCB: Charge customers for it? They think it's their God-given right to have that information.
Schwalbe: It might be, but there's a value-add because there’s a cost to collect it and track the package.
SCB: It’s been said by many that for certain customers, precise information about product in transit is preferred over speed. As long as they know when something is coming, that keeps them happy.
Schwalbe: If we’ve got a tracking device we can say when's it coming. In the construction space, for example, if you’ve got people waiting for something to come and it doesn't show up, that's wasted money. Having transparency and the ability to predict when something's arriving is very important.
SCB: When it comes to tracking, is it possible that having information can actually replace inventory, so that you need less buffer stock weighing down your balance sheet?
Schwalbe: For sure. Take an instance where you've got four or five large pieces of equipment that need to be at certain places. If you've got the material in the right place at the right time, you can have less of it. And when it's running out, if you know where the excess material is, you can automatically have it shipped. So you're able to drive inventory down.
SCB: What are some emerging technologies that can enable this level of tracking?
Schwalbe: In the cellular world, we hear a lot about 5G, LTE-M and narrow-band internet of things. Some of those technologies have allowed us to create devices that send low bits of data and reduce the power required. Also RFID [radio frequency identification] isn’t going away. Until the last six to 12 months, cellular really wasn't an option because we had to have the machines on the same network as the cell phones. You really couldn't drive low power.
SCB: How can all the different communications platforms be unified, so that shipments can literally be tracked from origin to destination?
Schwalbe: And keep the cost down. That's the challenge. If you have a satellite radio, cellular radio, or Bluetooth, it's really about understanding the business model, and where stuff in inventory moves. Then you create a solution around that.
SCB: What are the big challenges that companies face with implementation of these solutions?
Schwalbe: There are many companies out there with a couple of I.T. people in a warehouse, and they've been building hardware forever and haven't really thought about how to digitize. A lot of times, the real challenge is one of mindset. It’s thinking about, "How will that data really impact my business?" There’s going to have to be an upfront investment in hardware and setting up the infrastructure to track product. Right now the biggest challenge is just getting into the executive suite, helping them understand that there’s a return on investment involved in working through the business model.
SCB: So you’re optimistic that the day will come when we can actually track everything?
Schwalbe: Yes, it's coming. The technology is there. It’s just a matter of when, because the competition is doing it. Older companies that have been around have to look at it and say, "I have to jump on this, or somebody's going to come in and replace what I do."
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