The current landscape

Mobile technology is being deployed creatively today in the supply chain, but at the same time it is a well-established approach in certain supply chain areas, like warehouses, retail stores, and logistics. Mobile tech adoption in some instances began informally with handheld units in the field that allowed managers and workers to report in orders, production and deliveries-but the most significant advancement from mobile over the past five years has not come from the end mobile units themselves, but rather from their ability to integrate real-time with the “heavy hitter” backend systems that run the supply chain, and not in a delayed, batch mode.

“Certainly there are many examples where mobile technology is being used in the supply chain,” says Reik Read an industry analyst at investment bank and brokerage Robert W. Baird & Co. “But five years ago, there was still a lot of batch processing, with downloads of field data into central data repositories at the end of the day. You couldn’t run in a real-time mode this way. Since then, wireless communications speeds have increased dramatically and prices for mobile technology have fallen to allow for many devices that are now deployed to exchange data in real-time. This has made mobile technology an efficient solution for the supply chain.”

The growth of mobile technology has produced innovative supply chain uses such as the deployment of mobile devices in food industry freezers that are set at -20 degrees Fahrenheit. These same mobile units are rugged enough to also work effortlessly in an environment of 90 degrees Fahrenheit and 90 percent humidity. The bottom line is that no matter where a person has to work with inventory, he can successfully barcode and read pallets and packages. This enhances safety and quality in inspections.

However, it is in the more established areas of mobile device deployment in the supply chain that the most impactive results are realized. Key areas are and remain: the warehouse (inventory management), logistics (shipping and delivery), and transactions in sales outlets, such as inventory-taking for reorders, automated customer checkout, et cetera.

 “Historically, the warehouse/DC functioned with legacy system green screens and specialized applications that uploaded information from the warehouse to the centralized systems in batch,” says Tim Eusterman, senior director of industry marketing for Intermec. “Warehouses today have moved to WMS (warehouse management systems) applications using wireless LANs with mobile devices to manage all worker activities and record events in real-time. And, a single mobile device today can deliver a variety of applications-from imaging at receiving, to high bay scanning at put away, to voice picking and RFID at the loading dock. The ability of mobile computing to get the right person to the right job at the right time with the right information is a major advantage to improving productivity, accuracy, and reducing labor costs.”

Mobile devices that are handheld, wearable, and/or installed on forklifts use both WLAN and bluetooth technology. Some even have voice-driven activation, which eliminates data keying errors that can have an adverse impact on backend systems. Automating data entry can yield major returns for companies that spend millions of dollars on ERP (enterprise resource planning) systems, because these systems are only as good as the data that feeds them.

“Modern manufacturing warehouse facilities are hundreds of thousands of square feet in size,” says Reik Read. “Having real-time mobile capability from any point in these facilities allows companies to track both people and assets. If you mount a mobile device on a forklift, you don’t have to give a driver a picklist at the beginning of the day. The manufacturing and warehousing environments are dynamic and change constantly. With optimization through real-time mobile communications, the instantaneous changes can be delivered to drivers. It allows greater visibility into the manufacturing process.”

This same supply chain visibility is being extended into logistics, where mobile technology is frequently deployed.

“We see supply chain mobile technology used in fleets, whether they are internal to the company or large commercial fleets,” remarks Ken Wood, senior vice president, product strategy, at Descartes Systems Group. “Some fleet units use what is known as passive monitoring, where black boxes are actually wired into trucks, and physically track the trucks using GPS. Other tracking devices like smartphones provide driver interaction with GPS tracking. These are ruggedized handheld units that not only provide GPS tracking of the fleet unit for purposes of the logistics of delivery, but that also incorporate applications like package scanning and signatures.” The driver on a delivery route can talk to others over his mobile device with real-time information on what packages are and will be delivered. Having real-time information is better than receiving updates every two hours (as in the past). Equipped with GPS, mobile devices can also assist in optimizing routes.

In retail stores, wireless mobile technology is being used to check on-hand inventory and to activate re-order points when in-store stock runs low. Inventory checks are also administered with mobile devices, and more retail outlets are also deploying automated checkout of customers. This information is fed back into the supply chain in real-time, and in some cases at end of day.

The implementation of mobile scanning reduces costly data entry errors, improves reporting, and improves turnaround speeds from the warehouse to store floors. Integrated systems allow for direct “pulls” from warehouses without a need to initiate formal purchase orders, and there are reduced labor costs since manual tracking is eliminated, while stores can more nimbly respond to customer requests on items. “With mobile technology, companies can react quickly to customer demand or out-of-stock conditions,” notes Gartner industry analyst William Clark.

Benefits of mobile technology

Thus far, mobile technology in supply chains has been focused on optimizing operations-and it has done this effectively. In logistics, companies can see where resources are in the field, whether those resources are working to plan, and ways to optimize routes to get the most out of them. “With mobile dispatch and status with GPS tracking, logistics companies can cut miles, idle time, and increase shipment visibility,” says Descartes’ Wood, who maintains that when there is improved management capability in this logistics part of the supply chain, a company can also improve other areas of the business, such as reducing the cycle time for billing.

In healthcare, mobile technology is used to track human organs on donor networks. This is critical supply chain work because there is a timeline between organ availability and the recipient’s having to respond. Organizations have reduced latency in these communications, and also have implemented robust security in the process, because it’s a question of getting the right products to the right places in the hospital.

Industry experts and analysts are happy with the progress that they see.

“If you go back five years ago, GPS and status tracking for fleet trucks was largely done by hard-wiring devices in trucks,” says Wood. “This was expensive. Now, with the advent of inexpensive mobile devices that not only track but run sophisticated delivery and mobile worker applications, enterprises are really jumping on mobile-enabling this part of the supply chain. There is especially growing interest in driver-interactive mobile.”

In the process, companies have also become aware of the importance of business process analysis, but there are industry practitioners who feel that BP analysis does not always carry over to the deployment of mobile devices in the supply chain-when it should. “You shouldn’t just install a tracking device in a truck,” advises Wood. “Instead, this is an opportunity to establish key performance indicators (KPIs), and to evaluate what happened versus what should have happened on routes so you can improve the performance of the logistics segments of your supply chain.”

And some challenges

As mobile technology incorporates into supply chains, these advances haven’t come without cost and the development of “best practices” from both successful and not so successful experiences.

Supply chain mobile tech (like any other technology) requires integration with systems and workforce policies and practices. The “systems” portion of the integration has been surprisingly straightforward, as most ERP and even standalone inventory and logistics management systems provide industry-standard application programming interfaces (APIs) that mobile devices already work with.

An area of greater challenge for companies with supply chains has been gaining the level of employee acceptance for mobile supply chain technology that employees perceive can also threaten the right to privacy. For example, it is one thing to scan inventory tags-but another to add on video applications that can also be used to record warehouse activities that include the monitoring of product shrinkage, with employee theft being one of the considered factors. A second supply chain mobile tech application that is beginning to be used more widely is supply chain mobile GPS (global positioning system) that allows logistics and other companies to track both employee and vehicle locations for route optimization. Some employees (and their unions) feel that the technology is also used to track them during times (e.g., lunch hours) when they shouldn’t be monitored.

The issue was brought home in Elgin v. St. Louis Coca-Cola Bottling Company, when an employee challenged Coke’s right to install GPS devices in company vehicles that employees were allowed to drive even when they were off-duty. Elgin was won by Coke, with the court determining that an employer had the right to track its physical assets, including delivery vans.

Making a more successful supply chain

Supply chain mobile technology is no different from any other technology: it requires thoughtful deployment. However, once deployed, mobile tech positions companies with supply chains for new technology advances and opportunities that can further the success of the supply chain.

“Prices continue to drop, and more people are enabling more resources with telemetry solutions, so that they now want a tracking device in the trailer a truck is pulling, as well as a handheld device for the truck driver,” explains Descartes’ Wood. “There will also be expanded and more creative device usage as more applications make themselves available in the mobile space. For example, you now have the touch screen Android handheld unit. All of this will change the price/performance curve and make mobile technology even more attractive to companies.”

Fleet operators already actively employ mobile supply chain technology, but they want to move to the next level by converting delivery trucks into “mobile” WiFi hubs that can do away with the headaches of having separate data plans with different carriers for mobile boxes hard-wired into trucks and the handheld units used by drivers.

“New mobile technologies for the supply chain are coming on board incrementally,” says Clark. “The first big rage was RFID, which still is a game-changer in some supply chain scenarios, and which is beginning to be leveraged with new applications. In other mobile technology, video is likely to be added and the third piece to this that I see coming in the future is collaboration, because there are times when persons in the supply chain need to communicate with each other and even with the customer to solve a problem. If we look at mobile devices, most of them now have instant messaging, email and cameras. These devices are great for collaboration and exception handling, and they have the ability to squeeze out latency in the supply chain.”

These new add-on applications make supply chain mobile an attractive option for field sales forces, service technicians, and merchandisers-all areas that companies have yet to take advantage of. It is logical to predict that the future supply chain will have mobile technology for collaboration, tracking, logistics, and reporting at nearly every point-from sales and merchandising to manufacturing, inventory, shipment, and delivery. “RFID also offers sensor capability that will provide a new level of item level communication that can improve machine operation or enhance supply chain routing,” says Reik Read.

Recommendations and final remarks

Mobile technology is a great way to optimize company performance over physical assets and service in the field. Particularly in inventory management, logistics, and certain retail operations, it is a proven and established technology. “Mobile technology can also be a revenue generator,” explains Reed. “For example, a cable service technician can hook up a cable and at the same time have the ability to ask a customer if they’d like to try a premium service and to sign the customer up on his mobile handheld.” Building out mobile tech to the sales and service sides of the supply chain is still a relatively untapped area of business potential.

Meanwhile, companies moving mobile technology into the supply chain should consider three key areas in their implementations:



Business process impact

There are major changes to business processes and you have to train people when you introduce new mobile applications. In the end, the decisions that you make about mobile technology and the supply chain should be driven by business process analysis and where this mobile technology will deliver the most benefit. During business process review and design, it is also an opportunity to identify the benefits from technology deployment that you expect to receive, as well as anticipated project challenges.



System integration

System integration can still be a challenge, although many mobile technologies interact with industry-standard interfaces and are virtually plug and play. This is because backend systems are complex. They are often at different stages of maturity, so you can encounter both applications and databases that are not ready for mobile technology. A company might have to spend three months on highly paid programmers to ready the backend systems for mobile technology incorporation. Initially, this boils down to an integration project. Sometimes, companies also get caught up waiting for the next big upgrade to a major piece of hardware or software, and this affects their ability to proactively implement mobile technology.



Security

More companies are considering mobile tech security approaches like biometrics or USB tokens, because they are immune to malware. An emerging security alternative is to use the mobile device itself as the token, which offers a number of benefits. “Security is enhanced when you can separate the token from the laptop or the desktop that is subject to advanced persistent threats,” says Vijay Takanti, vice president of security and collaboration Solutions at Exostar. “What’s more, people tend to value their mobile devices more than their wallets, so they are less likely to share their devices, and more likely to report them as missing.” Because mobile devices can be lost, it is imperative that IT have the ability to remotely monitor and shut down these devices if necessary when supply chain mobile technology is deployed in the field, and this type of security makes that more feasible. wt



Mary Shacklett is founder and president of Transworld Data based in Olympia, Washington.