Supply Chain Technology: Mobility surges outside the four walls
The growing complexity of transportation management is driving more logistics operations to explore mobile options. Whether they’re monitoring assets, human resources, or more efficiently scheduling deliveries, logistics organizations are turning to mobile tools to help achieve new efficiencies outside the warehouse and DC.
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The area that lies outside of the four walls of the warehouse and distribution center (DC) is a place where drivers are busy delivering customer orders; vehicles are staged in the yard and then filled or emptied at the dock door; and where that “last mile” to a customer location is bridged in the most efficient manner possible.
It’s also an area where increasing regulatory burdens, capacity crunches, and driver shortages can quickly take their toll on a company’s bottom line. Add trends like omni-channel, the Internet of Things (IoT), and a growing focus on global business to that mix and the scenario outside the four walls becomes even more daunting.
It’s this growing complexity in transportation management that’s driving more logistics operations to explore their mobile options. Whether they want to monitor their assets and human resources, more efficiently route and schedule their trucks, or enhance the service levels provided by their customer-facing employees, shippers are turning to mobile tools to help achieve these and other goals.
“The area outside the four walls is a place where we’re seeing significant levels of adoption, especially among mid-market organizations that want to mobilize their workflows and operations for the first time,” says David Krebs, president of enterprise mobility and connected devices at VDC Research.
In assessing the trend further, Krebs says that the solutions and use cases vary considerably and include pickup and delivery applications in the courier/postal market, direct store delivery (DSD), pre-sales and merchandising applications in the consumer packaged goods (CPG) segment, and both long-haul and LTL trucking solutions.
Over the next few pages, we’ll explore VDC’s most recent research in the mobile supply chain space, explore how shippers are leveraging this technology to their advantage, and discuss both the current and emerging trends in mobile supply chain technology.
Embracing the mobile movement
If VDC’s most recent research report is any indication, shippers are most definitely embracing the mobile movement in the transportation sector. In fact, many logistics managers have already “cut the wires” and are operating in a more mobile fashion in order to improve productivity, make the transportation process more efficient, and enhance customer service.
Other motivators include the need for greater efficiencies, the fact that truck drivers must use hands-free devices to communicate from their vehicles, and the visibility that proven tools like GPS trackers are providing at the freight transportation level.
According to VDC’s most recent research, the leading current or planned mobile transportation applications include GPS navigation and real-time routing (used by 63 percent of companies); dispatch management and scheduling (55 percent); parcel delivery and tracking (55 percent); proof of delivery (51 percent); telematics (42 percent); and customer service engagement (39 percent).Mobility is also rearing its head for functions such as fleet service and maintenance, fleet management, and port and yard management.
In assessing the strides that vendors of mobile technologies have made in recent years, Krebs says that continuous improvements to network coverage, mobile device functionality, and application functionality are coming together to support even the most sophisticated mobile solutions.
“Organizations are leveraging GPS technology when possible, more seamlessly integrating signature capture and payment capture capabilities, using cameras for evidence capture, and overall enabling the field-based transportation workforce to be more productive and deliver better services,” says Krebs.
But just because the technology is available and working doesn’t necessarily mean that every logistics organization is forking over the money for new mobile technologies. In fact, Krebs sees the biggest challenges influencing investment decisions in this market as managing cost and profitability; addressing logistics capacity and load planning; and increased demands on reverse logistics and returns management as a consequence of the growth of e-commerce.
In many cases, Krebs says that the investment does pay off for shippers who go mobile. The key mobility investment drivers among transportation organizations right now, according to VDC, are improved worker productivity (55 percent of shippers say this is a driver); reduced operational costs (42 percent); increased customer service and loyalty (33 percent); faster decision-making (32 percent); better field worker communication and collaboration (30 percent); and improved profitability (26 percent).
From their mobile investments, shippers are also looking to achieve faster response to last-minute schedule changes, improved safety and compliance, higher asset performance and availability, and improved employee satisfaction and retention.
“We see mobile solutions contributing directly to providing greater real-time visibility of assets in the field,” Krebs notes, “enabling workforce productivity, and efficiency improvements, among other benefits.”
Wait and see?
The need for speed, cost reductions, and better customer service aren’t the only things pushing more logistics operations to explore their mobile options right now.
According to Krebs, the business world is currently in the midst of a massive migration from legacy mobile transportation and logistics solutions designed to run on Windows Mobile/CE operating systems to more modern platforms such as Android, iOS, and potentially Windows 10.
“For many organizations this is a massive undertaking as it requires recoding of legacy applications, retraining of the workforce, and significant IT investments,” says Krebs, who points out that a large share of the market—especially pertaining to warehouse solutions—has yet to migrate.
“These firms are taking a bit of a ‘wait and see’ approach with respect to Microsoft and for best practices to evolve,” says Krebs. “More progressive organizations are not waiting and using this opportunity to also review and reengineer existing workflows to determine opportunities for improvement.”
Also in play right now is the massive omni-channel distribution card, which has pushed shippers to find more efficient ways to handle item-level fulfillment. “Their logistics infrastructures need to be able to support that level of efficiency and accuracy,” Krebs points out. And while IoT has grabbed a lot of the headlines recently, he says its current impact on the supply chain is mixed.
“Investments in telematics solutions continue, spurred by decreasing adoption costs and the greater integration with mobile devices used by drivers,” says Krebs. “However, we’re still pretty far off from providing the level of in-transit visibility envisioned by many of these IoT bubble scenarios. Clearly the technology has matured to the point where a lot is functionally feasible, but the reality is that the cost of adoption of many of these solutions is prohibitive in a sector operating with relatively thin margins.”
Finally, Krebs says that he’s certainly seeing growing demand for solutions that combine, for example, GPS, RFID, and sensors from shippers that are dealing with tight regulatory controls, where spoilage is a significant risk (cold chain), or where the value of the items can justify the investment (consider the need for real-time tracking visibility of high value freight).
“Overall, adoption among large operators is strong to very strong,” says Krebs. “But right now we’re seeing significant demand in the mid-market, which remains relatively underpenetrated. Our research suggests that overall, year-over-year investment in mobility solutions for ‘beyond the fence’ applications is growing at 8 percent annually.”
Calling the use of mobile tools to capture logistics and field data a “fairly mature” practice at this point, Simon Ellis, practice director at IDC Manufacturing Insights, says that the penetration of digital devices has been fairly prevalent over the last six years. “We did a survey in 2009 and found that 20 percent of data wasn’t even being captured,” says Ellis. “My guess is that number is now lower than 5 percent.”
But while the notion of a mobile supply chain may have come to fruition, Ellis says that the rapid evolution of mobile tools makes the space anything but static. “The fact that most companies now use mobile tools outside of the warehouse walls doesn’t mean we aren’t going to see a continued
evolution in the capabilities of those tools,” he adds.
What’s on the horizon?
When he looks out at the mobile space that exists beyond the four walls, Joe Vernon, senior manager of North America supply chain technology for Capgemini, sees two emerging trends taking center stage.
This first is the use of geo-fencing to better track assets as they come in and out of the yard. A virtual barrier of sorts, a geo-fence is a software-based functionality that utilizes GPS or radio frequency identification (RFID) to define geographical boundaries. Drivers communicate with the geo-fence via a smart phone or other mobile device.
Vernon sees true potential in geo-fencing for logistics organizations. “You can put a geo-fence around an area and as soon as a truck enters, you’ll know it’s in the yard, how long it has been there, and when it leaves,” says Vernon. “This can help resolve any disputes regarding a truck’s stay in the yard, any dwell-time charges, and other metrics. The geofence will automatically catch all of that.”
The other innovation Vernon predicts will gain ground in the mobile supply chain space is called “agent-based computer modeling.” Defined as the use of computational models for simulating the actions and interactions of autonomous agents, and with a view to assessing their effects on the system as a whole, agent-based modeling allows companies to look at their empirical, theoretical, and other data.
Once gathered, the data is used to assemble a behavioral reaction and make suggestions for forward-looking decisions. Vernon points to the Singapore taxi system—which uses the technology to direct, redirect, and manage its vehicles—as a good example of agent-based modeling in action. “This is an exciting frontier for this idea of all-around awareness, modeling, and the predictive aspect of it,” says Vernon, “and it’s all facilitated by mobility.”
About the AuthorBridget McCrea, Editor Bridget McCrea is a Contributing Editor for Logistics Management based in Clearwater, Fla. She has covered the transportation and supply chain space since 1996 and has covered all aspects of the industry for Logistics Management and Supply Chain Management Review. She can be reached at [email protected], or on Twitter @BridgetMcCrea
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