Motorola expects to complete its acquisition of Symbol Technologies early next year, ushering in a new era in enterprise mobility technology. When announcing the $3.9bn deal in September, Motorola executives stressed the importance of Symbol's leadership in rugged mobile computing, data capture, RFID, and wireless infrastructure as well as its large and diverse customer base. Executives of both companies say they share a common vision of providing enterprise mobility solutions that match the digital world that consumers enjoy outside of work. Gerald McNerney, senior director of transportation, distribution & logistics solutions at Symbol, was not at liberty to discuss details of the acquisition during this conversation, but he did have much to say about how mobility solutions are changing the way companies do business, especially in the supply chain.
Q: How did you arrive at your current position with Symbol?
McNerney: Before I joined Symbol, I was a supply chain analyst at AMR Research; prior to that, I had spent about 15 years in industry, working primarily in transportation and logistics. I have been with Symbol for about four years and my current role is global leader for transportation and logistics solutions. This is a big market for the types of products that Symbol manufactures and my division works very closely with customers and prospects, as well as with our very robust partner community, to make sure that we are providing the kind of solutions that will help our customers make real improvements in their businesses.
Q: What does this term "enterprise mobility" actually mean?
McNerney: Well, a lot of companies have made big investments for many years now in different technologies and enterprise applications. One of the big problems they have had is how to unlock and capitalize on the capabilities within these technologies. For instance, if a company bought a new system-whether it was enterprise resource management or warehouse management or transportation management-the software was only as good as the person who was tethered to his desk operating it. Now these mobility solutions come along and we are able to unleash all these workers from their desks. They can go to where the problem is or where the customer is and take with them the information that is resident in the corporation. So that really is what enterprise mobility is all about-enabling the information that you need to do your job effectively and proactively to be with you 24/7. We are providing the tools for enterprises to do that.
Q: How is this concept impacting the supply chain?
McNerney: If you asked most people to put the supply chain down on paper, they would draw something very linear. But people who work in the supply chain are actually very network oriented and the way supply chains operate is with a lot of different parties working and collaborating together. From one end of the supply chain to the other, there is a lot of activity and a lot of interrelationships, and information is really the oil that makes all of that work in as frictionless a way as possible. And all the different mobility tools are what get the information to the worker where he needs it.
In terms of how it is changing businesses, most companies have a problem now recruiting highly skilled workers. They want to make sure they are getting maximum productivity out of each of the skilled workers they do have. The ability to put different forms of technology in these workers' hands gives them the capability to grow their business without having to put so many more people in place. Think of the trucking environment. The turnover for truck drivers is about 125 percent every year. If mobile technology can help make that driver productive from day one, that is a real improvement. He can make more stops, perform more activities, get those kinds of productivity improvements that help grow a business.
In a warehousing environment, one of the biggest costs is inventory, so the last thing a company wants to do is have a lot of inventory sitting on a shelf and not making money. If you can actually start to manage the demand from your customer and also see what goods are coming toward you from the manufacturer or warehousing perspective, you can be much more effective. You can put a lot more goods into a cross-dock operation or make greater use of direct to store delivery to avoid the warehouse completely. Because you have lots of levels of information, you can control how goods are moving through the warehouse and also minimize the amount of goods that will actually have to be stored.
But most exciting to me is the customer service perspective. For retailers, in particular, having information at the point of contact with the customer enables the sales associate to be highly engaged with a customer, which results in more sales. For example, say a customer comes in and wants to order a specific article of clothing in three colors. What if the clerk had a mobile device that could quickly tell him where those items are in the store and, if they are not in stock, where they are in the supply chain? Maybe they are in another store, maybe they are in the warehouse, or maybe they are in transit. If you have that kind of information, all of a sudden you can meet the expectations of the customer even if the product isn't on the store shelf. You can tell the customer you don't have the product in the store, but you can have it sent to their home via parcel post for delivery in the next 24 or 48 hours. These are just a couple of the thousands of different ways our customers are using mobility tools.
Q: How do you see RFID being incorporated into enterprise mobility?
McNerney: I am one of the people who was a little skeptical about RFID adoption, but it really has become a pretty stable technology, something that companies can use effectively. But in order to use it effectively, companies do have to re-think their processes. We have found that when businesses look at their operations and the technology with a fresh eye, they are able to find some very strong applications. Of course, it is more expensive than barcode technology and people always are asking how they can compensate for the additional cost. But often, if there are some real pain points in the business, an application of RFID technology can help. Think about yard management, for instance. This is a big problem for a lot of people that have big fleets because it is hard to keep track of all the equipment and to make sure that trailers get to the dock doors when they are needed so you don't have lag time and workers standing around waiting. What we are finding now is that if you put a fairly inexpensive passive tag on every trailer, which can be read from as far away as 50 feet, you can greatly improve yard operations.
Another really interesting area is this whole international aspect. Now that we have standards around RFID technology, people are starting to think about actually introducing the RFID tag at the point of manufacture, and these days that often is in China or some other country. When you introduce the tag at that point, a lot more people in the supply chain can benefit from it: the manufacturer can use the information as can the logistics company that takes it to the port, the ocean carrier, the intermodal carrier on the other side, the distribution center that receives it and, finally, the retail store. So because you have a standard and you have people enabled with devices that can read this technology, you benefit from a much clearer route of information. That's a really strong benefit.
Another thing that is really exciting is that a lot of new RFID embodiments are much more mobile. We have a new mobile reader, for instance, that people are attaching to forklifts in the warehouse. Now, instead of having to have fixed RFID readers on every dock door throughout your facility, which for most people is cost prohibitive, you can put a reader on key pieces of material handling equipment. This changes the whole capital expenditure model so RFID starts to make a lot more sense for many companies. They can get much higher visibility of goods moving through their facility with an economic model that works for them. So we have overcome most of the technology issues, we are now overcoming the economic issues and the next step is how to change processes to take advantage of what the technology can do. That is really where we are now and a lot of work is going on behind the scenes on developing exception management types of processes around the information. You don't want to deal with all the information available-that would be information overload-so you need to be able to filter out the information that shows when things are starting to fall out of tolerance so you can send out alerts and proactively take action. Overall, we are seeing a steady progression with RFID and I think in the next decade, meaning 2010 and onwards, this technology will become ubiquitous.
Q: What is the key thing people need to be paying attention to in this area?
McNerney: I think it is important for companies to think about mobility whenever they are making a technology investment. They need to be sure that whatever they are adding will fit into a mobile environment because that is the way things are moving. A lot of people thought we would never get rid of desktop computers, but now most everyone has a laptop and some people are wondering when we will start getting rid of laptops, because that is probably the next evolution.
The other thing is this issue around the skilled workforce. The U.S. unemployment rate is around 4.4 percent, but if you break that down and look at just the skilled workforce, it is below 2 percent. At that level, there is not a lot a company can do to grow without spending big money to attract and retain employees. Mobile devices at least give you the ability to make this skilled workforce more productive.
We also are putting a lot of thought into the aging of the workforce and looking at what we can do to make our devices more effective for older workers. This is not just about complexity, it is about the physical handling characteristics, things like the size and brightness of screens, because as we age our eyes are not as good. This is an issue for our customers as well. When they start to think about mobility, they have to think about who their workers are and what they need to be able to do their jobs most effectively. As we continue to design new products, these are issues that we are spending a lot of time on.
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