A Walk on the Wireless Side
Are you ready to join the wireless revolution, but just not sure where to begin? With wireless technology rapidly making its way into the supply chain, the challenge for many companies is keeping up to speed on the latest offerings and solutions. Here's a crash course on some of the many wireless applications gaining market share and a look at how some companies are applying what's available to their own pain points.
Let's face it. It's pretty hard to ignore the impact of wireless technology on logistics practices. You've heard the hype about RFID implementation, GPS tracking technology, and Wi-Fi in the warehouse, but what does all this really mean for your business? Where do you begin to research how wireless fits into your logistics or supply chain operations?
Although wireless has been around for years, previously it was not cost-effective for most small- or mid-size companies to deploy wireless networks in their supply chains. Now with improved coverage, faster bandwidth and affordable hardware on the market, more companies are considering wireless innovation in their logistics operations.
With new developments constantly available on the market, the level of flexibility and possibility associated with wireless implementation in the supply chain seems infinite. So how are you supposed to know exactly which applications are right for your business?
"You have to do an in-depth assessment of the business applications your company is performing in the field, and identify which ones add the most value to the bottom line," says Laura Johnson, director, line of business solutions, AT&T Wireless.
In order to shed some light on the vast offerings out there, here is a brief rundown of some wireless applications making waves in the supply chain.
The RFID Invasion
While RFID has experienced limited use for some time, it has recently started to gain attention as a supply chain solution due in large part to major retailers such as Wal-Mart mandating that top suppliers implement the technology by January 2005.
RFID uses radio waves to automatically identify goods such as pallets, containers, and even individual items, in the supply chain. When integrated with information networks of manufacturers, suppliers, distributors, and retailers, the information provided by RFID increases visibility and efficiency throughout the supply chain.
A basic RFID system consists of three components: an antenna or coil, a transceiver (with decoder), and a transponder (RF tag) electronically programmed with unique information. The antenna emits radio signals to activate the tag. Once the RFID tag is activated, the antenna is able to read and write data to it. Antennas are the channels between the tag and the transceiver, which control the system's data collection and communication.
The significant advantage of all types of RFID systems is the non-contact, non-line-of-sight nature of the technology. Tags can be read through a variety of substances such as snow, fog, ice, paint, grime, and other challenging conditions, where bar codes would be useless. RFID tags can also be read at rapid speeds—in most cases less than 100 milliseconds. The read/write capability of an active RFID system is a key component in asset tracking, automated data collection and inventory management.
Aside from the Wal-Mart mandate, many companies will want to take a closer look at implementing RFID in their supply chains. According to research firm Venture Development Corp., RFID systems will grow from $965 million in 2002 to $2.67 billion in 2007—quite a leap in just five years.
Wireless in the Sky: GPS Tracking Technology
Until recently, the cost for GPS fleet management and navigation systems was in the thousands of dollars, making it impossible for small trucking fleets to leverage these technologies. With affordable GPS-enabled mobile phones, however, many small and mid-size companies are now starting to take advantage of this tracking technology and implementing wireless in their fleet operations.
"Using a cellular phone as the in-cab communications device can reduce hardware investments by 10 to 20 times," says Marc Mitchell, transportation practice director for Enterprise Information Solutions (EIS), a systems integration and computer engineering firm based in Downers Grove, Ill.
With a wireless phone-based fleet management system, truckers use cell phones with GPS tracking capabilities built into the phone. The phone captures data in real time. This data is transmitted to the Internet, then to the company's computers for viewing at any time. Fleet managers can track and monitor fleet activity and exchange information with mobile workers via voice, text messaging and email.
One benefit of using cell phones, says Mitchell, is that drivers are usually more comfortable using a phone than an unfamiliar onboard computer. The phones are also good for situations where it is not practical to communicate via text message or email. In some cases, mobile phones are even equipped with Java applications, giving the device programmability equivalent to a desktop PC.
The enhanced productivity associated with this real-time information exchange is apparent in areas many companies may not have originally considered, notes AT&T's Laura Johnson. "We found that in asset tracking and monitoring, gas expenditure was a big factor in reducing cost and increasing productivity. Companies were surprised to see such significant cost savings in terms of fuel," she says.
GPS technology also impacts customer service. Fleet operators can provide customers with up-to-the-minute information about the status of their loads and customers get visibility into their shipments throughout the entire supply chain.
Wi-Fi: Data Out of Thin Air
Wireless local area networks, or LANs, consist of a wired component, access points, data collection units, handheld computers, laptops, network interface cards, and software to manage the network. With wireless LAN technology, data capture can happen anywhere throughout the enterprise—on the shop floor, in the warehouse or on the loading dock. Because users are untethered, they don't need access to the local area network.
One of the benefits of a wireless LAN is the ability to more accurately and efficiently manage inventory and perform cycle counts. Workers can continually audit sections of the warehouse without the company shutting down for a complete physical inventory. And, because data collection is automated, fewer inaccuracies occur in counts, subsequently tightening inventory control.
Wireless connectivity also allows for more streamlined receiving processes. By scanning product at the dock, the enterprise knows the product's location immediately. If it is needed to fill an order, the product can be labeled for shipment and sent directly to the shipping department instead of stored and later pulled. This cuts down on cycle time for fulfillment and eliminates lagged inventory status.
The Future is Now
The wireless invasion into logistics and supply chain operations is growing. These are just some of the technology applications hitting the supply chain market, with more already out there and a slew of others on their heels. But although the market continues to expand, many companies are still taking a wait-and-see approach to implementation.
Companies looking to take the leap and integrate wireless into their supply chains, however, should take a cautious and strategic approach when evaluating mobile solutions. Define your business needs and determine if the vendor has the know-how and implementation skill to meet those needs.
EIS's Marc Mitchell advises companies to do more than just explore the options available: "If you can't find the industry expertise, then don't just survey what products are out there. Go to conferences on the subject and listen to what people are doing with the technology. It is always better to learn from what your peers are doing than from the vendors who are trying to sell you."
With wireless technology continuously evolving, there are no easy answers for end users seeking solutions. And while there is never certainty of success with any new implementation, this is especially true of a constantly evolving market such as wireless. By researching the available options and partnering with the right vendors, however, businesses can make informed, intelligent decisions, thus increasing their chances for a successful wireless integration.
To help you get started, Inbound Logistics has compiled a list of some wireless providers in the segment (Who's Who In Wireless). While this is by no means an all-inclusive listing of vendors, we hope it will help guide you in your preliminary search. Know a company that should be included in this listing? Let us know at: firstname.lastname@example.org