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The vision of a real-time enterprise is impossible to contemplate without wireless applications. From truck drivers' use of wireless devices to communicate with enterprise systems, to the tracking of tagged assets and emerging electronic product codes, wireless technology is crucial to the real-time capture and delivery of supply-chain information.
As voice and data capabilities converge and as the cost of radio frequency identification (RFID) technology comes down, experts say wireless applications and mobile technologies will become a mandatory component of all supply-chain operations.
Many companies already are using wireless communications to connect remote workers - truck drivers, field technicians and sales representatives - to the home office and its systems. Pickup and delivery drivers at FedEx Freight, Memphis, Tenn., are on their fifth-generation wireless device. "These drivers basically download a manifest for each scheduled stop onto their handheld," says Jeff Amerine, managing director of IT. The driver uses the handheld to create an "arrival event" at each stop and then confirms the delivery or pickup, he explains. This information is sent wirelessly back to the mainframe and updates the FedEx Freight web site so customers see near real-time information on order status. If a last minute pickup request comes in, that information is wirelessly sent to the driver's handheld, which automatically sends back confirmation that it has been received.
There are many advantages to this system, not the least of which is the elimination of time-consuming phone calls. "Most companies that do voice communications have a dispatcher with a phone in both ears and a pen in both hands," says Frank White, vice president of operations systems. "Our dispatchers are watching screens and you seldom hear a phone ring." In addition, transmitting pickup information back to the terminal early in the day allows load planners to get an early start on their work, reducing handling time and sending freight on its way that much sooner.
FedEx Freight is in the process of testing and selecting a provider for a more advanced pocket PC device that will have a 400-megahertz processor. "That would have been blazing fast for a desktop machine just a year or two ago, and now our drivers will have that much power in a device that fits in the palm of their hand and attaches to their belt very easily," says White. This new device will combine barcode scanning capability with a color screen and data transmission based on General Packet Radio Service (GPRS) technology, a new non-voice service that allows information to be sent and received across a mobile telephone network much faster and in greater detail than prior systems. With GPRS, the information is split into separate but related "packets" before being transmitted and reassembled at the receiving end. A GPRS connection is always on, so no dial-up modem is necessary for connection and information can be sent via the internet. Moreover, GPRS radio resources are used only when data is actually being transmitted, so several users can share the same resource.
With this new device, which FedEx Freight expects to roll out next year, drivers will be able to do a track and trace for a customer or "one-last-order" sales transaction right there on the dock, says White. "That's another advantage to having this broadband capability and a more powerful device in their hand."
ABF Freight System, Fort Smith, Ark., is in the process of deploying a wireless system from Nextel throughout its network. Already 40 terminals and more than 60 percent of ABF's pickup and delivery drivers are equipped with Nextel's i700plus internet-ready phone. ABF estimates it saves five hours a day in freight handling as a result of having information relayed at the time of pickup. ABF also uses the wireless system to direct the movement of trailers throughout its consolidation facilities, which typically process between 100 and 500 trailers a day.
In addition, ABF has written a program for the Java-equipped wireless devices that "basically run the loading dock," according to Ernie Cormier, vice president of enterprise solutions at Nextel. "It does load scheduling and optimization and gives direction to people moving pallets around, and it is all tied back into the inventory system," he says.
Nextel's nationwide packet-data network is the nation's largest and was built for the commercial user. "What we are emphasizing is our ability to get data into the hands of the decision makers who need it," says Cormier. "We are able, with our technology partners, to pull data from an ERP or inventory systems, or a customer relationship management system, and deliver that information out to a range of wireless devices anywhere on the Nextel network or to the loading dock or shop floor."
Nextel's network also provides a "direct connect" service that allows related users within a range of 100 miles or more to talk with the touch of a button, much like a walkie-talkie. That service will be expanded next year so that direct connect will work even if users travel outside their home market.
This fall, Nextel will launch a new device in conjunction with Research in Motion, the developer of the wireless e-mail Blackberry device. "This will have everything you get on the latest Nextel phone all built into a RIM Blackberry," says Cormier. It will be all integrated into a single device with an microphone and earphone for voice and a large LTV screen similar to that on a regular Blackberry."
Integrating voice and data in one device is the direction of the future, says White of FedEx Freight. "As radio technologies become more integrated, I see us eliminating devices from our belt. Personal digital assistants and cell phones and pagers will all be on one device, and all the applications will be voice activated. In the future we won't have keyboards anymore."
Software for Wireless
While companies like FedEx Freight and ABF often write their own programs for wireless applications, software vendors increasingly are offering products designed to optimize the use of wireless in the supply chain. Categoric, for example, earlier this year added two-way wireless capabilities to its event management and alerting software. "We found that having wireless communications was useful, but if people who weren't at their desk couldn't immediately do something with the information, they would become frustrated and start ignoring the messages," says Michael Yager, director of marketing and business development at the Sterling, Va.-based company.
Now in addition to pushing personalized alerts to the cell phones of customers who are outside the office, Categoric's Xalerts software also asks them to respond by selecting from a list of actions. Call recipients either can use voice or select a response using the keypad on their phones. The choices are based on rules set either by the sender or the recipient. The supplier of a product could set up a rule so that in the event of a delay the system will automatically telephone the customer and verbally give them options to re-schedule, order an alternative product, cancel the order or speak to an operator, Yager explains.
Previously Xalerts enabled semi-automated management of exceptions by triggering e-mails or sending short digital messages of up to 160 characters to cellular phones. "By delivering automated spoken alerts and creating an instant response mechanism we have solved the problem that at any one time many of a company's employees or customers don't have immediate access to a computer and the majority of mobile phone users worldwide don't have, or don't know how to use, SMS [short message service]," says Safi Captan, CTO and founder of Categoric. "Pretty much anybody that a major business wants to sell to these days has a mobile phone. Interactive voice alerts puts them all immediately in reach, whatever kind of phone, network or technical ability they have."
Xora, Mountain View, Calif., has focused on developing pre-packaged mobility connectors for many of the leading enterprise applications, including i2's supply-chain suite, Siebel's Customer Relationship Management and ERP solutions from Oracle, SAP and J.D. Edwards. These pre-built connectors provide a foundation for rapid implementation of a wireless solution, says Ananth Rani, Xora vice president of products and services. "In many cases, wireless and voice access to these systems can be implemented within weeks," he says. "From a return on investment perspective, corporations can use Xora as one single enterprise-wide foundation for all their data mobility requirements."
GlobeRanger, Richardson, Texas, provides a wireless platform called iMotion and software applications for implementing a variety of wireless supply-chain solutions, from the warehouse to transportation and field service workers. "Wireless is the key to enabling real-time decisions across the supply chain," says John Todd, CEO. "We use our server-based software to communicate wirelessly to handheld devices so companies can take advantage of real-time execution."
GlobeRanger's Solution for Transportation & Logistics was selected by one of the top three automakers to improve inbound operations, which are managed by a third-party. The problem was that many drivers had to leave on their daily parts-pickup run before route orders were updated with the latest information. Since the automaker requires that any discrepancies between orders and shipments be reconciled before the driver continues his route, a lot of delays were encountered at the suppliers' dock trying to resolve discrepancies. In addition, the incomplete information often resulted in trucks reaching capacity before the drivers finished their route.
GlobeRanger's solution allowed the drivers to wirelessly download the current route data at the time of departure and then check for new order-data updates at each pickup location. The driver's handheld also is used to quickly scan and reconcile the supplier shipments. As a result, drivers no longer need to call dispatch for exception handling and on-site reconciliation gives the factory real-time visibility into actual delivery quantities. GlobeRanger says that after implementation, the customer realized a 50 percent reduction in order discrepancies at pickup, a 98 percent reduction in calls to dispatch, and a 66 percent reduction in trailer capacity issues.
GlobeRanger also works with third-party logistics providers like Exel and MagRabbit to implement warehouse wireless solutions. In an ongoing implementation at an Exel warehouse dedicated to a manufacturer of hard drives, information will flow both to Exel's warehouse management system and the customer's enterprise SAP system. "Orders from the SAP system will be communicated to the forklift driver in real time and as the worker picks that order, our system will not only update the warehouse tool as to inventory but will also update the ordering system as to the status of that particular order," says Todd.
Wireless technology also is invaluable in keeping track of goods in large outdoor areas. At the Georgia Ports Authority in Savannah, for example, up to 30,000 containers arrive daily via ship, truck or train. To gain coverage of this 853-acre site, the GPA installed a narrowband wireless data communication system from Psion Teklogix, Mississauga, Ont. Wireless terminals were installed on all toplift equipment, yard trucks and supervisory vehicles, while handheld devices are used by staff. The terminals provide direct communication access to the mainframe computer system, which verifies and records all port activities in real-time.
GPA has improved port efficiencies by decreasing time spent searching for containers and by providing a more efficient load process. The system also has increased productivity and reduced labor costs, while providing customers with instant updates on container movement.
Perhaps the wireless technology with the greatest potential to transform the supply chain is radio frequency identification (RFID). Combining a high-capacity "smart" electronic tag with readers that can gather unique product information from the tag without line-of-sight access opens the door to a world of possibilities. Most RFID tags in use today have a battery power source and are fairly bulky and expensive, but as size and costs come down, the range of practical applications will rapidly expand.
WhereNet, Santa Clara, Calif., uses RFID technology to provide real-time locating systems (RTLS) for tracking valuable assets, usually tractors, trailers or containers but also finished goods. Ford Motor Co., for example, places a WhereNet tag on every automobile that comes off the assembly line so that each auto can be easily located as it moves through final testing and on to the delivery and loading area. "If you have a yard with 5,000 vehicles that all look alike except for color, and you need to find a specific one, that can be very difficult," says Matt Armanino, vice president of business development. "What people typically do is throw labor at the problem, which is very inefficient. With our system, you just pull up a map of the site and it shows you the precise location within 10 feet. This system allows Ford to do a much better job of increasing velocity in its shipping process, which is a big focus of auto manufacturers."
WhereNet also provides Ford with a factory-floor solution called WhereCall. Part bins used on the assembly line are tagged and when the parts are depleted to a prescribed level, the line operator presses a button on the tag which sends a signal letting the plant floor production system know that more parts need to be brought to this location.
WhereNet recently introduced a second generation of technology which greatly enhances the ability to use RTLS data to update enterprise applications. This is important because too often today "these systems are fundamentally handicapped because they don't have a good source of real-time data," says Armanino. "For the most part they are data starved and the data they do get is out of date, often incorrect and heavily reliant on manual data-entry processes or barcode scanning. We can provide constant connectivity between the assets and information systems so that vital, real-time information can get to the hands of the mobile workforce."
Bruce Jacquemard, executive vice president-field operations for Savi Technologies, Sunnyvale, Calif., also emphasizes the ability of RFID to provide real-time visibility to what is happening throughout the supply chain. One driver for this technology, he says, is increased security concerns since 9/11. "The requirement to have a secure view of the movement of goods in and out of the U.S has accelerated adoption," he says. "Companies don't want to have their particular container or conveyance to be part of a security problem." As companies put in the infrastructure to track assets from a security perspective, he says, they also gain full-time visibility to that asset.
To provide end-to-end visibility Savi is combining its local area network RFID solutions with satellite tracking of mobile assets from Qualcomm, San Diego, Calif. The two companies previously teamed to provide the DoD's wireless tracking infrastructure called the Total Asset Visibility (TAV) network, which provides in-transit visibility for military assets and cargo. TAV monitors and manages 250,000 conveyances that move military supplies through 350 locations in more than 36 countries.
In their latest joint venture, the two companies will provide a similar solution to enable visibility and security for containers and their contents for the maritime, rail and truck industries. The product initiative combines Qualcomm's OmniTRACS and OmniExpress mobile communications systems, network operations and fleet management, with Savi's real-time locating solutions, including sixth-generation technology and electronic security seals, and fleet management software. "Integrating wide-area networks with local-area networks for the purpose of comprehensive asset management is a powerful idea," says Chris Wolfe, president of Qualcomm Wireless Business Solutions. The combined product, he says, will make "continuous monitoring, real-time inventory visibility and supply-chain security a reality."
An exciting, emerging development in RFID is the use of smaller passive tags that easily can be embedded in labels or objects and that sleep until awakened by a reader. Texas Instruments RFID, Dallas, now is able to sell such a tag for around 35 cents, according to Bill Allen, e-marketing manager. "You're still not going to put a 35-cent tag on a can of beans," he says "but you may well want to put a 35-cent tag on a $35 pair of jeans."
Unlike barcodes, which identify a labeled item as belonging to a particular SKU category, electronic product codes identify each item individually and can include a great deal of information, such as when the product was manufactured, at which plant, the lot number, the quality inspector, and so on. The amount of information actually presents a problem yet to be overcome - most supply-chain and enterprise applications are not designed to handle this amount of data.
The advantages are many, however. In addition to being able to easily track at the item level - an ability buyers increasingly want - smart tags would substantially speed product handling and reduce labor at any point in the supply chain where readers can be installed. For example, notes Allen, if an incoming sealed cardboard box is supposed to contain 24 pair of tagged jeans in assorted sizes and styles, the box has only to come within range of a reader for each item inside to be read and recorded - no more opening boxes to check or scan contents.
This same capability improves the accuracy of picking and packing orders. If packed boxes are conveyed through an antenna system, the contents can be instantly read and compared with the pick order. This benefit convinced Fig Leaves, a U.K. internet retailer of lingerie and undergarments, to install Texas Instruments' tags on its products. Fig Leaves' goal was to reduce the number of returns it experienced as a result of shipping the wrong item, as well as speeding the pick/pack/ship process, says Allen.
Similarly, Marks and Spenser, another U.K. retailer, attached TI tags to three and a half million plastic trays used to move and store perishable food items in its distribution center. The tags are continually rewritten to reflect the contents of the entire cart and the expiration date of products, speeding processing and making sure that items are timely moved to the stores.
In a recent report, Forrester Research, Cambridge, Mass., suggests that consumer packaged goods companies will first use this technology to tag cases rather than individual items. By monitoring tagged cases, RFID readers embedded inside shelves in a retailer's stockroom could notify the distribution center when the store is running low. Proctor & Gamble expects that such a system could minimize stockouts while reducing inventory by 40 percent, according to Forrester.
In an effort to speed development and adoption of this technology, an Auto-ID Center was established at the Massachusetts Institute of Technology. In addition to research, which it hopes will lead to products smart enough to influence their own destiny, the center is sponsoring a test of electronic product codes by Wal-Mart, Procter & Gamble and others. Wal-Mart has fitted out two distribution centers as well as one Sam's Club and one Wal-Mart store with the technology. Wal-Mart's interest in RFID is sure to spur adoption, according to Forrester, which says that by 2005 some 5 billion CPG objects will have RFID tags, primarily on cases. "As CPG firms roll out RFID for case-level visibility, they will tap a wealth of execution data that provides a real-time view of demand signals. This view will allow firms to create flexible 'sense-and-respond' supply networks that allow them to shift production and distribution proactively to meet new demand," the report says.
Sometime after 2008, the cost of RFID tags will drop to a penny or below, Forrester predicts. Then, it will be cost-effective to tag individual items and consumers will begin to see applications like smart recycling and automated replenishment. "RFID is today what the barcode was in the early '70s - a promising technology with narrow exposure," says Forrester. There seems little doubt that smart tags eventually will be as ubiquitous as barcodes are today.
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