The future of RFID Is now at least a bit clearer. As a followup to their stunning announcement last June that Wal-Mart would require major suppliers to affix RFID tags (known as chips) to all incoming cases and pallets, Wal-Mart executives met with their top suppliers and some technology vendors last month to lay out their plans for rolling out RFID technology throughout their distribution network. Although Wal-Mart did not back off from its insistence that its biggest suppliers be ready to comply with its RFID mandate in 2005, it did scale back plans for the initial rollout, limiting it to a group of three Wal-Mart DCs in the Dallas area that serve about 150 stores. (The one exception is pharmaceutical companies that supply Wal-Mart pharmacies with narcotic drugs, which must be RFID-enabled by March 2004.)
For many vendors, the chance to get some details and ask questions helped allay anxieties. "It had reached almost mythical proportions for weeks," says Greg Gilbert, a product manager for Manhattan Associates, a large supply chain execution software company. "For suppliers, it was good to learn the exact size, scope and scale of the initiative."
Like Gilbert, Tom Coyle, vice president of supply chain solutions for Matrics Inc., a company that provides RFID tags, readers and related software, came away from the meeting convinced that Wal-Mart is moving ahead aggressively with its RFID initiative. Coyle says he was surprised to learn that many more than the 100 suppliers covered by the initial Wal-Mart mandate are launching efforts to comply with the RFID requirements.
But not everyone is convinced that the industry is ready to roll where RFID is concerned. Kara Romanow, a senior research analyst for AMR Research in Boston, contends that last month's meetings left a number of questions unanswered and caused additional confusion for some suppliers."[Wal-Mart] did scale back on its expectations," she says. "But I don't think everyone will make the deadline."
Romanow characterizes the Wal-Mart decision to begin implementation in a single region as both "good news and bad news" for suppliers. It's good news, she says, because consumer packaged goods (CPG) companies that sell to Wal-Mart won't have to deploy RFID systems quite as quickly as they had expected. The bad news is that it could create added work for suppliers that ship to Wal-Mart. Just how much work will depend on the type of distribution network a shipper has in place. Shippers that move goods into the targeted Dallas-area facilities out of a single regional DC will face no additional tasks. But those shipping from productspecific DCs in different parts of the country will have to segregate and tag freight bound for the target DCs. Romanow also questions whether the technology currently available can realistically meet Wal-Mart's demands and provide returns for businesses that make the substantial investment required. "The technology's not ready for prime time," she asserts.
Romanow insists that she's not skeptical about RFID technology in general. "It's not that I don't believe in the technology—it is a revolutionary vision and it will have a revolutionary impact," she says. "Wal-Mart is just pushing it too fast. They're a little unrealistic. That's OK. It gets things moving now rather than five years from now. The issue is what happens in January 2005 when some suppliers can't comply."
Cashing in on the chips
Though some may question the technology's readiness, it's clear that the game's afoot, and most observers agree that consumer goods companies have little time to waste. That's particularly true for businesses that are in the early stages of RFID implementation.
And it appears that a lot of companies are in those early stages. Coyle estimates that 80 percent of the company representatives who approached Matrics at a technology fair associated with the Wal-Mart meeting are still fairly new to the technology.
Though nobody expects this initiative to go off without a hitch—Mike Dempsey, an industry strategy leader for software maker RedPrairie, advises suppliers to hedge their bets by affixing both RFID tags and bar codes to their initial shipments—the earlier RFID adoption efforts get under way, the better. Coyle urges shippers to get going right away. "You need dedicated staff and a dedicated budget," he says. "You want to get to the action phase as soon as possible." Coyle cautions that it's more than a matter of sticking tags on pallets. "The whole purpose is to get visibility and be able to take corrective action," he says. "You need to figure out what you're going to do with the data you collect."
Romanow says she is urging her CPG clients to focus on their internal processes and systems rather than on the actual RFID technology. "The technology will resolve itself," she says. "The standards will resolve themselves." She suggests that businesses examine their current infrastructure and internal systems to find ways to get the maximum return on their RFID investment. "Figure out how you're going to leverage the [electronic product code] coming back from Wal-Mart," she urges. "If there's any ROI, that's where it's going to come from."
As anxious as suppliers may be for quick returns on their investment, ROI could prove elusive for many. Though costs are difficult to pin down because of wide variations among applications, Coyle says DCs can expect to spend $3,000 to $4,000 per read point and 30 to 40 cents per tag. Beyond that, many companies will also have to invest in middleware needed to link the RFID system with a WMS or ERP system.
Given the level of investment required, Coyle cautions buyers to investigate technology providers' claims carefully. "Ninety percent of what you hear is not valid," he says. "The only way to find the 10 percent is to see it in place." He suggests that managers visit companies that have already implemented the technology. "Look at the implementation, ask about the ROI, and get feedback from end users. You can only believe what you can see. Do the Missouri thing."
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
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.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!