It's not a new concept, the idea that the ability to control assets, inventory and events depends on the ability to see them.
But capability has only recently begun to catch up with the concept. As a result, a broad range of technological tools designed to enhance "visibility and control" have become available in the last couple of years.
ARC Advisory Group, a research consultancy that closely follows supply chain developments, considers logistics visibility and control to be an offshoot of supply chain event management solutions. In 2004, an ARC study reported that the visibility and control market had grown "briskly" since 2000 and now represented a significant growth opportunity.
ARC divides the technology into tools to control four categories of processes: supply side, demand side, global trade visibility, and reverse and service logistics. Another category, mobile asset management, could be added to that list, and, in the case of tracking trailers or containers, is closely related to tracking inventory. The range is wide enough that the term "visibility and control" can mean something as local as managing mobile assets in the distribution center or as far-reaching as access to inventory scattered among carriers and vendors across the globe.
Visibility enables control
Razat Gaurav, vice president of i2's Transportation and Distribution Group, uses the broader definition. "Visibility and control extends across the entire supply chain and all the different time horizons," he says. As he sees it, visibility is an essential part of order life-cycle management and becomes more important as international supply chains become more complex. "Visibility is not an end in itself," he explains. "It is not a silver bullet but it is important in enabling the management of risk and uncertainty that is inherent in supply chains."
Gaurav cites the example of a retailer sourcing in China and the risks associated with long international supply chains. "They create a replenishment plan, and there is a certain schedule around that," he says. "As they are executing, the supplier may have some delays in the production process, or there may be delays in delivery. Or worse yet, the products could get stuck during customs clearance. Maybe the carrier picking up the merchandise was late and missed a voyage. There are all kinds of possibilities, a lot of things that can go wrong beyond your physical control. Where you don't have direct control over the fulfillment cycle, visibility becomes a key enabler in managing that uncertainty." That is, knowing when things go awry allows you to take action to mitigate the effects of delays. That could include steps like notifying a DC about the status of an expected shipment or arranging for expedited delivery to avoid an out-of-stock.
That's not to suggest that implementing the technology will be easy. Obtaining visibility across the supply chain implies the use of systems and tools that can cut across enterprises. That can pose problems in organizations where the different functions don't communicate well with each other or with their trading partners. "You have to have an architecture that allows connectivity within the enterprise and among business partners," Gaurav says. Furthermore, he adds, visibility systems have to have a way to synchronize data across multiple enterprises no easy task in an environment where the same SKU can have several names or numbers and where some partners operate with purchase order (PO) numbers and others with bills of lading. "Different entities in the supply chain and groups in the organization need different kinds of information, depending on their position," he says. "The buying organization is worried about the PO; transportation cares about the container and shipment IDs. You need to be able to manage both and give visibility for both entities and give them information appropriate for their role."
Assets on the move
Gaurav says the same is true for managing mobile assets, like trailers and containers, both to follow the inventory they hold and for managing how those assets are utilized. "The whole concept of asset utilization can become very powerful," he says. "That requires visibility."
Mike Hammonds is CEO of Argo Tracker, a company that offers both cellular and satellite-based asset tracking devices for trailers and containers. He says logistics executives are looking to visibility tools for multiple reasons. First, they want to keep tabs on assets in transit in order to prevent loss and boost worker productivity. "The first reason for purchasing the service is short-term return on investment (ROI), addressing shrinkage caused by theft, damage or spoilage or to get a reduction in insurance premiums," he says. For carriers, especially those moving international shipments, tracking also helps them comply with government regulations.
Then there's the matter of the goods inside the containers. "Inventory accountability of commercial containers is a huge issue," Hammonds notes.
In addition, fleet managers often look to tracking technology to make better use of their assets. Having good visibility into how assets move can help enable better scheduling and route analysis, Hammond suggests.
Carriers that have made use of visibility tools agree. UniGroup, parent company of Mayflower Transit and United Van Lines, has begun deploying the Global Locating System offered by SkyBitz across its own fleet as well as its 850 agents' trailer fleets. The system, which allows the company to track trailer location even when trailers are not tethered to tractors, replaces a tractor-based system that UniGroup had been using for about 12 years. "We decided to try tracking where the clients' goods are in the trailer," says Gene Elkins, the company's vice president of operations support.
The company is still in the early stages of deploying the SkyBitz technology, with about 400 installations complete, but it's serious about getting it installed across all its managed fleets. It has mandated installation of the equipment in all trailers by the end of 2008, Elkins says. "We want complete visibility into our capacity and our ability to order capacity."
Getting the goods on inventory
Elkins adds that the tracking capability is becoming increasingly important to the carriers' high-value goods customers, whose shipments can be worth millions of dollars. Some demand location updates as often as every 15 minutes. Others, like the government (which recently hired the carrier to move sensitive goods), require realtime on-demand tracking capability, he says.
"Just in the 90 days since we started installation, we've had instances where clients [have become aware of] the technology and have asked us to do something special for them," he says. Those include such services as the 15-minute polling or tracking to assure shipments are meeting schedules. The latter application allows customers that are shipping equipment that needs installation support at destination to schedule technicians to meet the vehicle.
Elkins says he expects the technology to enable UniGroup and its agents to improve fleet utilization. "In household goods, May to September is when our capacity is stretched. We know we have latent availability within our capacity and this gets us to identify where the capacity is and where it's going, and we can match it with orders." That's especially important, he says, for the carriers' special products line of business, where customers often want to tender freight for same-day shipping. "Visibility allows us to respond to those client needs very quickly," he says.
As truckload carrier Texas Freight's operations supervisor, Frank Ngu says he has quickly seen benefits from the visibility system the carrier purchased from Argo Tracker.
The carrier, which has about 160 trailers and 70 drivers, is primarily a regional hauler, but does send trucks on longer hauls on occasion. He tells the story of one driver who was confused on California highways. "We could tell from here that he had passed his exit," Ngu says. Using the Argo Tracker system, dispatchers in Texas were able to direct the driver back on route.
"This [tracking technology] gives us advantages from an operations standpoint," he says. "It gives us some kind of grasp of where our equipment is. At the same time, it gives us a sense of security. If we see a tractor moving in the wrong direction, we are able to flag that and, if something does happen, notify law enforcement."
Asset tracking and management systems can also be used to keep tabs on wireless tools in the DC managing, updating and, if necessary, shutting down mobile assets such as handheld scanners from a remote location. For example, Saddle Creek, a third-party logistics company that specializes in contract and public warehousing and transportation, recently deployed software called Avalanche, developed by Wavelink, to manage its mobile assets. The company, which operates 20 warehouses around the country, makes extensive use of radio-frequency devices in about half those facilities.
Kathy Fulton, manager of technical services for Saddle Creek, says the company bought the software to reduce the amount of time the information systems people spent worrying about each piece of equipment. The company has some 200 mobile devices throughout its warehouses, including handhelds, vehicle-mounted units, and wrist-mounted computers. Fulton says the goal was to find a tool to manage all those centrally. "We wanted to get them to talk to our warehouse management system (WMS) and to keep them all synchronized with appropriate information. One way to do that is centrally so we don't have to train people in the field.When we need to do something, we can rapidly deploy it."
The software allows Saddle Creek managers at the Lakeland, Fla., headquarters to track the devices' whereabouts, send software updates directly to the equipment, and even shut down the devices if necessary. Previously, each piece of equipment had to be updated individually. "We would have to touch every device to configure it," Fulton says. That operation took 20 to 45 minutes per device.
The Wavelink technology, by contrast, allows quick configurations, keeping employees productive, says Trista Otto, manager of process improvement for Saddle Creek. Otto adds that another advantage of the software is that it can be used across all of the various WMS systems the company has in place.
Fulton adds, "One of the things we like is that it is agnostic from the WMS perspective and from a hardware perspective. We could switch devices tomorrow and it wouldn't matter."
Given the potential scale of visibility and control projects, any implementation has to begin with some fairly precise definition of what's needed and the setting of priorities. Gaurav says, "You have to take a phased, value-driven approach to a visibility initiative. You cannot attack all of it at once."
Gaurav believes the use of visibility and control tools for supply chain applications is still in its early stages, with some companies well ahead of others. Hammonds agrees, saying the business is in its infancy.
But more businesses are looking to such tools. "What is happening is that the need and awareness are getting compounded by supply chains' becoming more global," Gaurav says. "You are no longer working with a supplier in Kentucky, but a supplier in China. The need for synchronization becomes greater the more variable the lead times, the greater the uncertainly, and the more parties involved.
Visibility and control tools have gained traction in the supply chain management community, where they're being used to track assets and manage inventory as it moves around the globe. But some users are starting to deploy the technology for security applications as well. "If you can help operations and help give security, that's fantastic," says Matt Schor, director of homeland security solutions for WhereNet Corp. WhereNet provides logistics visibility and control tools for the wireless tracking and management of assets.
Schor cites as an example investment in RFID technology by the ports of Los Angeles and Long Beach. "They were looking for a solution to process third-party trucks and also meet Coast Guard requirements for a portwide security plan," he says. The technology adopted by the ports allows users to locate containers by the exact parking spot, he says.
Schor, a specialist in security issues, predicts that the next big push will be container security. "What people are worried about is the nuclear threat," he says. That is, the greatest fear is that terrorists will attempt to smuggle a nuclear device into the United States in an international shipping container. The deterrent would be some form of screening for radioactive material.
One of the technologies expected to emerge in the next year or two is what's known as "long dwell detection in transit," which will require radiation detectors on containers, rather than at screening points at ports. Those detectors, Schor says, would monitor for certain dosages of radioactivity, much like the badges worn by X-ray technicians to warn of an overdose. Schor says the detectors have an advantage over screening at ports because they have several days, rather than a few seconds, to pick up a signal. And though he admits that adding detectors to millions of containers would be costly, he argues that the expense should be viewed in the context of the billions of dollars already being spent on security.