Technology Briefing Update, 06/28/07

Robert Spiegel -- Logistics Management, 6/28/2007 7:25:00 AM

• Visibility and agility most important for global supply chains
• Logistics costs jump 11% in 2006, now 10% of GDP
• Accellos and RFID consortium develop RFID tools for 3PL
• Suppliers ready for RFID, customers not

Visibility and agility most important for global supply chains
A report from Aberdeen Research finds that the top two factors driving global trade management in 2007 include the lack of critical supply chain process visibility and the need to more effectively manage growing global distribution networks. Strong global competition and increasing regulatory requirements are driving companies to re-think their strategies for global trade management and see more efficient management approaches and enabling technologies, notes the report, “Global Trade Management Strategies: Surviving Growing Complexities in 2007,” which is available free.

“The top strategic action companies plan to take in meeting these challenges is increasing their globally supply chain agility,” says Viktoriya Sadlovska, the report’s author. “Companies are prioritizing visibility technology enhancements and trade compliance initiatives to help them achieve this goal.”

Logistics costs jump 11% in 2006, now 10% of GDP
A benchmark report released by the Council of Supply Chain Management Professionals (CSCMP) shows logistics costs in the United States increased $130 billion over 2005 to $1.305 trillion for 2006. “In 2006, U.S. business logistics costs accounted for 9.9 percent of our Gross Domestic Product (GDP),” says Rick Blasgen, president and CEO of CSCMP. “It is the third year in a row that logistics costs have accounted for an increasing share of GDP.”

Transportation costs – spurred by rising fuel costs – rose 9.4 percent in 2006 and represent the largest component of logistics costs. Inventory-carrying costs increased even faster, 13.5 percent. Researchers cited higher interest rates and higher inventory in the system as the culprits.

Accellos and RFID consortium develop RFID tools for 3PL
Warehouse and logistics solutions provider, Accellos Inc. of Colorado Springs, Colo., and the RFID consortium members have completed an initiative that addresses requirements of third-party logistics (3PL) companies in the freezer, cooler and dry warehousing markets. The goal was to develop RFID slap and ship capability that meets the compliance requirements of specific retailers.

The consortium – a group composed of manufacturers, operators and system integrators – set out with Accellos to advance the application and effectiveness of the new generation of warehouse tracking and retrieval technology in the controlled temperature 3PL sector. The resulting technology is included in Accellos’ Enterprise 3PL logistics management software, which was demonstrated in the consortiums two laboratories at Confederation Freezers in Brampton, Ontario, Canada and at Richmond Cold Storage in Richmond, Va.

Suppliers ready for RFID, customers not
Technology resellers and solution providers in RFID are ready with their solutions, but customers have been slow to embrace the technology, according to a survey by the Computing Technology Industry Association (CompTIA). The survey finds that 84 percent of technology resellers, solution providers, system integrators and consultants will or may offer RFID products and solutions in the next three years. But nearly two thirds of respondents said their customers have yet to implement RFID solutions. Among those who aid their customers have implemented RFID, less than 20 percent are actually using the technology.

“The results of our survey are reflective of the RFID market, where rosy forecasts about rapid and widespread adoption have given way to the reality of dealing with a technology whose broader deployment has been challenged by equipment and tagging costs, murky and unclear return-on-investment for supply chain applications, and a workforce skills shortage,” says David Sommer, VP of e-business and software solutions at CompTIA.