Supply Chain and Logistics Technology: 8 trends taking us closer to visibility
August 01, 2013
When analyst David Krebs assesses wireless and mobile penetration across various industries, the logistics and transportation markets stand out as segments that consistently invest in equipment and solutions that help them operate in an increasingly untethered world.
Whether they’re equipping delivery drivers with ruggedized devices, using handheld computers to track inventory, or relying on mobile devices to monitor the temperature of refrigerated goods as they make their way through the supply chain, it seems that today’s logistics professionals have come to both understand and appreciate the value of a wireless world.
“Some of the largest mobile and wireless deployments we’ve seen to date have been instituted by the logistics and transportation segment,” says Krebs, vice president of enterprise mobility and connected devices at VDC Research. That positive momentum is pushing the industry closer and closer to a “completely wireless, real-time supply chain nirvana” and helping companies work smarter, better, and faster in an increasingly competitive business environment.
Over the next couple pages we’ll explore the eight leading wireless and mobility trends taking place in the industry, and then we’ll identify how shippers can effectively leverage these trends to their advantage.
Supply chain operations around the world have certainly benefited from the ongoing release of new wireless products and applications designed to streamline logistics and transportation management. Where it is providing better transparency, prompting shippers to discard their historically-wired ways, or allowing smaller companies to affordably beef up their IT infrastructures, mobility is having a major impact across the supply chain.
After interviewing the market’s leading analysts, Logistics Management came up with these eight trends that all shippers should be aware of in 2013 and beyond:
1. Wireless now accommodates a sharper focus on efficiency and transparency. Shippers are under constant pressure to reduce supply chain costs as part of larger, company-wide cost reduction strategies. Even minimal increases in fuel and labor costs, for example, can throw a firm’s bottom line out of whack when these expenses are multiplied across the entire supply chain.
To offset this challenge, companies are turning to wireless solutions that provide tracking and tracing capabilities that result in improved efficiency and transparency. “There is a vested interest by organizations to ensure that their operations are performing at maximum efficiency,”
Krebs points out, noting that manual processes—many of which are still in use—simply don’t cut it anymore. High-tech options like wireless proof-of-delivery solutions for trucks, for example, can help shippers gain both efficiency and transparency outside of the four walls of the warehouse.
2. The end user is dictating mobile consumption and driving the market. Knowing how efficient and effective it can be to work without wires, today’s shippers are putting pressure on equipment and software vendors to build more devices and solutions that operate wirelessly. That pressure has extended out to the end-to-end supply chain, where vendors are scrambling to accommodate the requests.
“At the end of the day, if you’re a vendor and your mobile device doesn’t run applications, then it isn’t helpful,” states Simon Ellis, practice director at IDC Manufacturing Insights. Over time, Ellis expects more providers to create mobile versions of their applications and mobile-enabled equipment that is both appealing and useful for end users who are striving to gain visibility across the entire supply chain.
3. Mobile solutions are pushing shippers out of their “manual” comfort zones. Because they don’t require hard wiring or elaborate IT infrastructures, today’s wireless solutions—many of which can be run in the cloud—are helping shippers of all sizes make the jump from manual, fax-based systems to highly automated solutions literally overnight.
Krebs recently worked with a company that moved its fleet of 3,500 trucks over to ruggedized handheld devices that drivers now use to capture, track, and report proof of delivery information in real-time. Previously, the company was using a partly manual and partly Nextel phone solution on an intermittent basis for the same task.
“This particular application proves that there are some cool things happening in the wireless market,” says Krebs, “but the fact that it took place in the last 12 months to 18 months also shows that a lot integration and automation upgrades still need to happen among shippers.”
4. The smart phone is carving out a place for itself in the supply chain. Sure, they’re still not as physically robust as their ruggedized counterparts, but today’s smart phones—whether they are provided by the company or brought in by workers on a “BYOD” (bring your own device) basis—are staking a bigger claim in supply chain operations these days.
And while consumer devices like the iPhone aren’t made to withstand the wear and tear inflicted by warehouse workers, truck drivers, and delivery personnel, their vendors are beginning to introduce more robust equipment and protection options.
“You can put a bumper around a smart phone, but you can’t save it from all of the damage, particularly in an outdoor environment,” says Krebs. “The idea that consumer products can incorporate features like fall, water, and dust protection in the future certainly isn’t inconceivable.”
5. Wireless helps shippers create a more cohesive workforce outside of the four walls of the warehouse. Few would argue the positive impact that today’s mobile devices and capabilities have had on human communication and collaboration. The same holds true in the logistics organization, where drivers using mobile devices and solutions no longer have to go to the dispatcher to pick up their “instructions” for the day, and then follow them independently with little or no other intervention.
“Mobility creates tighter communication across the supply chain and between the individuals who are out in the field and the folks who are developing strategies back at corporate headquarters,” says Ann Dozier, vice president of consumer products, retail, and distribution for Capgemini Consulting. “Those higher levels of communication and collaboration translate into improved customer service,” says Dozier, “and a workforce that’s more focused on a point in time, versus a slip of paper.”
6. Smaller, more nimble shippers are using wireless to ramp up and improve their technology infrastructures. There’s little doubt that mobile allows companies to become more successful overall thanks to the expedited information sharing, portability, and connectivity that it offers shippers. Dozier sees smaller firms taking a bigger interest in developing wireless supply chains—in particular, those that aren’t currently tied into large, enterprise-wide, wired technologies.
In fact, she says one of the biggest obstacles that larger organizations run into when implementing wireless solutions is the fact that they’ve already invested significant dollars in wired systems. “When you don’t have large investments in current technology,” says Dozier, “it’s actually easier to move forward with mobile initiatives.”
7. The mobile device and applications are being paired up with the individual worker in mind. Smart phones, tablets, and ruggedized devices aren’t homogeneous and neither are the individuals who use these products on a daily basis. Dozier says that both shippers and vendors have awakened to this fact, and notes that both entities are taking more time to match the right user up with the correct device.
“Shippers have to recognize that there are different devices for different people,” Dozier says, “and look hard at what device, data, and applications someone may need to be able to the job.” As part of this trend, Dozier says many vendors are now working to separate their devices from the associated applications and are moving away from the age-old strategy of integrating technology into their devices on the assembly line.
8. Mobile devices are still only as good as the information that’s available. Looking back at how much supply chain visibility shippers have gained over the past two years—and how much they will gain over the coming two years—Ellis says much of that positive impact comes from the continued growth of wireless and mobile in the space. But none of that would be possible without the information itself, says Ellis, who points out that mobile devices are only consuming the information that’s being made available to them.
“You can have the best mobile device in the world, but the information is still the information,” says Ellis. “Mobility serves purely as a more flexible access point and a way for shippers to get at the information that they need to make the best possible business decisions.”
Wireless crystal ball
Going forward, all of the analysts interviewed for this article say mobility will play an increasingly important role in supply chain management.
Being able to “cut the wires,” it seems, can create substantial benefit across the supply chain and allow shippers more freedom to optimize their operations and improve visibility. No longer relegated to a desk, rolling computer stand, or electrical socket, supply chain professionals continue to leverage mobile devices and applications nearly as quickly as vendors produce them.
Ellis says that there’s no end in sight to the wireless supply chain movement. “We expect a nice upward tick in the use of mobile and an emphasis on better and smarter devices,” says Ellis. “It will be a steady, upward march for wireless as its adoption levels rise, the business case for it becomes clearer, and the number of available mobile tools grows.”
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