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To most people, the word "wireless" evokes a simple home router or a public cafÃƒÂ© with an erratic internet connection. Even in the world of supply chain management, awareness is often limited to discrete applications such as barcode scanning and lift-truck operations. In actuality, wireless has broken out of the warehouse and promises to play a major role in the tracking of freight, information and transportation the world over.
Wireless is literally on the move, says Brooks Bentz, a partner with Accenture in Boston. The idea, he says, is to "take conventional technology and make it not only wireless, but mobile." Already the applications have gone beyond basic freight tracking to include equipment control, traffic management, toll-booth operations and the detection of track defects along rail lines. Bentz has even heard talk of using satellites with wireless connections for air traffic control, instead of ground-based towers.
The technology is being applied to everything from trucks and railcars to the individual parts of a shipment. One of Accenture's clients, a retailer based in the U.K., is experimenting with a checkout system that can scan a shopping cart full of items without the customer having to remove them and scan them individually.
Better systems for identifying freight down to the SKU level are a key to retailers becoming more responsive to sudden shifts in market demand, Bentz says. Container shipping might seem a straightforward process, but things can get complicated when the contents of an oceangoing box are broken out and reloaded into domestic containers or trailers at the port of entry. With tighter control over incoming goods, especially during the times they change hands, suppliers can reroute product to where it is most needed.
Wireless inside distribution centers is a mature technology, even if radio frequency identification has yet to fulfill its potential. Barcoding is an established practice in many warehouses, and RFID tags are showing their value in security-conscious industries such as defense, says Neil Smith, chief executive officer of Savi Networks in Mountain View, Calif.
"The next step," says Smith, "is to start using wireless technologies outside of the four walls." Developments over the past decade, including enhancements in cellular communications, the internet and programming languages such as Java, have propelled wireless to a new level of sophistication.
"It's developing at light speed," Smith says. "In my view, wireless is the way the world is going."
A World of Choices
Still, there are roadblocks to the full development of wireless, chief among them confusion about which type of system to deploy, and how to justify its cost. "Companies need to make decisions based on the value they receive," says Smith. Savi's approach has been to construct a single platform for viewing the supply chain in real time, drawing on RFID, satellite communications, cellular networks and other existing technologies. The vendor offers a subscription-based package with a full wireless infrastructure, including tags.
Cost remains a factor, especially in tough economic times. But Smith believes wireless systems will come down in price as they are more widely adopted by global supply chains. The total cost can be spread across a growing universe of users. Ultimately, he says, "I don't think there are any cost inhibitors."
Jeff Gantt, director in the product management organization of Atlanta-based Manhattan Associates, sees promise in the new generation of "multimodal" handheld devices. The units support a number of technologies, including barcode and RFID, and are even equipped with voice-activated controls for activities such as pick-pack.
"It's not there yet," says Gantt, "but in the future, the ability to support multiple data-capture methods within the same workflow is where we're trying to get to." For example, a warehouse worker might use voice to identify the right location for putting away or picking product, then scan the items with an RFID reader. Gantt predicts such systems will be in regular use within the next six to 18 months.
"Voice-enabled systems have been on the market for years," he says, "but the adoption curve is just starting to catch up."
RFID is also lagging, Gantt says, with producers put off by the high cost and resources required. Wal-Mart and its Sam's Club subsidiary have eased off their strict schedules for vendor compliance. The plan was to move steadily from the tagging of pallets and cases to individual items, but the retailer's original timetable slipped as many companies dug in their heels with a "wait-and-see" approach.
Tag accuracy is another inhibitor, says Gantt, arguing that "anything less than a 100-percent read rate is not going to work." Full adoption of RFID by consumer products makers and retailers, he says, "is easily a few years out."
A more promising area for wireless is the application of social networking elements to the supply chain, Gantt says. Many vendors already offer a high level of inventory and shipment visibility data which can be easily relayed to handheld devices such as the iPhone and BlackBerry. Supply chain managers can access critical data from any location, far from a mainframe or desktop computer, let alone a distribution center.
Inside the Walls
There are a number of interesting developments within the warehouse walls, says Tom Kozensky, vice president of product strategy with RedPrairie Corp. in Waukesha, Wis. The growing popularity of event management systems, coupled with the use of performance metrics, has spurred the use of cellphones and handheld devices. For example, if a customer order is late, short or subject to a product recall, the warehouse manager can relay an alert through any number of wireless devices within the facility. The system can also flag potential problems that occur outside the walls, such as a driver missing a scheduled pickup.
New variants on wireless are catching on in the truck cab. Global positioning systems monitor the location of tractor and trailer, while cellular technology allows drivers to scan packages, confirm deliveries, accept orders and returns, and generate invoices while out on the road. Such capabilities are built into RedPrairie's transportation management system, Kozensky says.
Supplementing local area networking (LAN) standards is the growing use of voice-over-internet protocol (VoIP). The technology has experienced some "fits and starts," Kozensky says, but is finding use among major producers such as Coca-Cola, which is employing it in inventory picking. Wider market acceptance has yet to occur, with the burden on vendors to demonstrate that the system can consistently support high-volume operations.
Dropped signals remain a problem within cellular networks, although the newest systems provide backup capability so that no data is lost during temporary breaks in connection. "When a device goes away and reappears," says Kozensky, "you can pick up right where it left off."
Wireless has come a long way from its initial deployment on the warehouse floor, says Warren Sumner, general manager of the enterprise products group of TAKE Supply Chain (formerly ClearOrbit) in Austin. Mobile computers are finding new uses in delivery trucks and throughout the chain. Today's devices offer color graphics and a deeper level of intelligence about inventory positions.
"A lot of companies are talking to us about how they can track inventory once it leaves the warehouse," Sumner says. The goal is to reduce the amount of buffer stock that arises from uncertainty about customer demand.
GPS technology offers "geofencing" capabilities for truckers, allowing fleet managers immediately to see when a vehicle has strayed beyond its acceptable position, or is being driven in an unsafe manner. In the process, Sumner says, companies gain a level of intelligence that can result in lower insurance rates. GPS combines with barcodes and RFID to provide a complete picture of the shipment, from the precise location of the truck to the delivery of its contents.
Tag cost continues to impede the progress of RFID, Sumner says. The technology can be justified in many high-volume operations, where it leads to labor savings. But for the scanning of individual items at low volumes, the use of RFID by drivers "doesn't make sense," he says.
Wireless can play a major role in stopping the illegal diversion of product. Smart devices, tracking an item's journey to the end customer, help producers to enforce distribution policies in cases where gray-market sales are a possibility, Sumner says. The pharmaceutical industry is especially vulnerable to such practices.
A Maturing Technology
Basic radio frequency (RF) technology continues to be the most popular flavor of wireless in the distribution center, says Brent Forden, senior product manager for supply chain management with Alpharetta, Ga.-based Infor. "A close second, and coming up fast, is voice," he says, adding that Infor has a large number of customers who are using the technology in place of RF.
In terms of development, voice is now at the stage that RF was 10 years ago, Forden says. New technologies tend to start up with proprietary hardware and software, then migrate toward industry standards supported by all vendors. "Right now," he says, "voice is in the proprietary area. A few people are working on solutions that can make use of multiple technologies." He sees signs of a convergence, whereby existing RF devices become voice-enabled instead of being scrapped for the next big thing in wireless.
Beyond that, Forden has witnessed early experimentation with an enhanced system for visual recognition of barcodes. An onboard computer would be constantly scanning its environment, picking up location data and product barcodes. It would pinpoint the position of equipment much like a GPS system. "So far, the price points look kind of high," he says. "I'm curious to see how it will go forward."
As for RFID, it isn't sufficiently mature for large-scale deployment on cases and individual items, Forden says. But a number of companies are finding success in the use of RFID for tagging pallets, some of which have embedded chips. "It's come through the hype cycle," he says of RFID. "A lot more people understand what it is, where it's applicable, where you can and can't get a return on investment in the supply chain distribution environment."
John Seaner, vice president and general manager with EPCglobal US in Lawrenceville, N.J., says RFID holds promise in three major areas: manufacturing, distribution and retail. In the first instance, factories can keep tabs on such assets as tools, bins and reusable containers, which are essential to the smooth operation of any plant. On the logistics and distribution side, both transportation assets and freight are being tracked via RFID, although Seaner says the technology tends to be deployed in this area "in very limited fashion ... for particular retailers and clients." In the retail sector, RFID can potentially help companies to create a closed-loop supply chain which ensures that supply is coordinated with demand, and lost or stolen merchandise is minimized.
The next step, Seaner says, is to make critical data available to one's trading partners. EPCglobal US is playing a key role in developing industry standards and transaction sets which will allow for the easy exchange of information generated by RFID chips. Seaner predicts that a common infrastructure will be widely accepted within two to three years.
Mike Markham, vice president of sales with Cadre Technologies, in Denver, agrees that wireless is currently strongest on the warehouse floor. Wireless networks are easy to set up within the facility, through the use of standard routers linked to a server. The technology is an especially valuable means of boosting productivity in picking, he says. Aided by the new generation of handheld devices, a warehouse manager can direct the workforce from a central location. "Probably 95 percent of the businesses we work with today are interested in that technology," says Markham.
Devices such as the iPhone have a ways to go before they are completely integrated into commercial environments, but their potential is vast, says Markham. The latest models can match the capability of virtually any laptop. Users can set up cycle counts for a warehouse that is halfway across the country, and keep on top of any anomalies that might arise. They can manage stock and view expiration dates of perishable goods across multiple warehouses. The iPhone and similar devices "have really opened up a lot of capability to a person who is looking at things from a higher level," Markham says.
Adoption of the technology should pick up speed as wireless networks spread and become more reliable. "I believe that very soon, even in the next five years, we're going to see these long-range wireless technologies come about," Markham says. Mobile devices will play an even greater role in conveying essential information about inventory as well as goods in transit. "In our world," he says, "it's really all about access to information."
Facing the Customer
Wireless isn't just a means of discovering internal efficiencies. It can be an important tool for boosting customer service, says Mike Maris, senior director of transportation and logistics with Motorola Inc. in Schaumberg, Ill. The kind of status information that has become the norm in business-to-consumer communications is now being applied to the business-to-business world. Wide-area technologies such as GPS are essential to making that transition possible, he says.
Data must be able to travel smoothly across many different kinds of systems, whether they be wide-area, cellular or localized networks. According to Maris, the transition is already seamless. A single smartphone can link the user to a supply chain via all types of communications protocols, including voice over internet. For the moment, that technology is more popular in manufacturing plants than distribution centers, Maris says, but it's beginning to find a foothold throughout the chain.
A number of gaps remain to be plugged. Shippers often lose tracking ability during the time a container is on board a ship, Maris says. Transferring boxes to the railroads, which tend to use proprietary systems for monitoring equipment position, can also be a problem. Adoption by the rail industry of common standards will be a slow process, he says, even though most transportation companies have embraced some form of wireless communications.
Rail technology can be highly sophisticated, says William LeFebvre, chief technology officer of IONX in West Chester, Pa. His company, a business unit of Amsted Rail, deploys wireless sensor technology, linked to satellite and cellular networks, to help railcar owners and shippers track their freight. The devices are affixed to freight cars; they report on equipment position as well as any tampering or temperature anomalies. Wireless mesh networks minimize the loss of communications due to dropped signals or blocked data paths. IONX has its own software which consolidates status information and integrates with the rail system, but it can also hand off the data in an XML file to customers with more sophisticated fleet management applications.
Perhaps the greatest barrier to wider adoption of wireless systems is pure economics. In a time of deep recession, companies pull back on any investment that they don't deem essential to their survival. For vendors of wireless technology, the trick is to convince potential customers that their products fall into that category.
"More so now than in the past, [investment in wireless] requires business justification," says Gantt. "Everything is on the table to be yanked or postponed." Voice systems are a good example of an attractive investment, he says, because they lead directly to improvements in worker productivity.
Markham argues that wireless technology can make a company more efficient in tough economic times. Third-party logistics providers are particularly motivated to offer constant visibility of product, along with an environment in which safety stock can be minimized. "You can't do that without new systems," he says.
Nevertheless, some advances in wireless technology, no matter how attractive, must await better times. Companies are limiting themselves to small projects with an immediate return on investment, and putting off major upgrades. "When the economy comes around," Kozensky says, "we're going to be real busy."
Cadre Technologies, www.cadretech.com
EPCglobal US, www.epcglobalus.org
Manhattan Associates, www.manh.com
Savi Networks, http://www.savinetworks.com/
TAKE Supply Chain, www.takesupplychain.com
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