John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
Unlike the Department of Defense and Wal-Mart, which jump-started their radio-frequency identification (RFID) initiatives by issuing do-or-die mandates, the federal Food and Drug Administration (FDA) has taken a more subtle approach. In hopes of stimulating pharmaceutical companies to rev up their RFID pilots, the agency issued what it calls its "Compliance Policy Guide" late last year. The new guidelines will make it easier for pharmaceutical companies to begin testing RFID. For example, under the new policy, drug makers no longer need to request special authorization before proceeding with RFID pilots. The agency has also suspended some of its manufacturing and labeling requirements until 2007.
The agency's interest in promoting RFID is no mystery. The FDA considers RFID technology to be its best hope for halting the growing problem of counterfeiting and fraud in the drug supply chain. Advances in RF technology have allowed manufacturers to embed "smart chips" into the labels of millions of bulk medicine bottles; each chip contains a unique electronic product code that allows the shipment to be tracked seamlessly throughout the supply chain. Besides discouraging theft, that enhanced tracking ability is expected to cut down on counterfeiting and make drug recalls more efficient. "The FDA wants pharmaceutical firms to go experiment and get this done," says John Blanchard, a principal analyst with ARC Advisory Group. "That's a very positive thing."
But the larger pharmaceutical companies, at least, haven't been waiting around for the FDA to act. Many drug manufacturers had been experimenting with RFID prior to the FDA's announcement in order to comply with mandates from Wal-Mart and other retailers.
In fact, the industry's adoption of RFID gained traction last month when Purdue Pharma LP, the manufacturer of OxyContin, began using RFID to track shipments of the theft-prone painkiller. Purdue is placing RFID tags on 100-tablet bottles of OxyContin to make it easier to track and authenticate shipments of the drug bound for Wal-Mart and H.D. Smith Wholesale Drug Co.
Two other drug makers have also outlined plans to implement the technology. Pfizer Inc. says it will begin placing RFID tags on bottles containing bulk quantities of Viagra intended for sale in the United States sometime this year.And GlaxoSmithKline plc says it will start using RFID in the next 12 to 18 months on at least one of its drugs that's susceptible to counterfeiting. For companies like Pfizer and GlaxoSmithKline, the RFID revolution can't come soon enough. Drug counterfeiting and theft currently cost the industry $30 billion a year.
RFID U
It's back to school for distribution executives who need to learn more about radio-frequency identification technology and its applications. AIM Global—The Association for Automatic Identification and Mobility—and The Computing Technology Industry Association (CompTIA) have announced a joint effort to develop an RFID certification program.
The initiative will address an industrywide shortage of professionals knowledgeable about RFID technology. Many companies eager to adopt the technology are being hampered in their efforts by a scarcity of qualified RFID integrators. One of those is Pacific Cycle, which was forced to change vendors mid-stream as it prepared to meet Wal-Mart's RFID mandate. "The people we were working with just weren't up to speed on the technology," says Ed Matthews, Pacific Cycle's director of information systems. "Those who have knowledge of RFID right now are few and far between."
AIM and CompTIA hope to do something about that. More than 30 members—technology vendors, systems integrators and end users—met at CompTIA's Chicago headquarters in early December to outline the steps required for a vendorneutral certification program. But curriculum developers will find they have a lot of ground to cover. "From the physics of the hardware installation to the challenges of integrating RFID-generated data with existing business processes, a broad base of expertise is required for successful implementation," says David Sommer, vice president, electronic commerce for CompTIA.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.