There's a dizzying array of ADC devices out there, each capable of delivering torrents of information. The challenge is to pluck just enough data from the chaos to help things run smoothly.
Half a century after the bar code's first appearance, supply chain managers are still figuring out how to handle the vast quantities of information it provides. Even as they struggle, a dizzying new range of automatic data collection (ADC) technologies are becoming economically viable, each more rich in information than the last: radio-frequency ID (RFID) tags, real-time locating systems (RTLS), magnetic stripe cards and global positioning satellites, along with biometric readers that scan the human iris and fingerprint. As the level of sophistication rises and the prices drop, logistics managers say it's increasingly difficult to figure out how to harness the power of ADC and make it work for them.
What they tend to overlook is that a blizzard of information is often less useful than a judiciously chosen trickle of facts. Vendors and analysts say it's crucial to decide which data collection processes would benefit from automation and to decide what level of detail is required. In an ideal scenario, the user plucks exactly enough information from the chaos to help things run smoothly.
Consider the case of 24plus, a pan-European expedited delivery company, where the chaos was considerable. The company, based in Hauneck-Unterhaun, Germany, was formed in 1996 as a partnership among 51 different shipping services. Every day, the network delivers around 40,000 packages in 34 countries, handled through 51 depots, offering guaranteed delivery times of 24 and 48 hours. Despite the complexity of the operation, the company relied on paper to manage receiving, tracking and even cross docking until 1999—when 24plus began to install bar-code printers and scanners from Psion Teklogix. "Before installing the system we had to report by pen and paper, via fax reports, with inquiries via phone on top of that," says Peter Baumann, managing director at 24Plus. "This was very time intensive and of course required a lot more work."
The challenge was to consolidate 51 separate information technology systems into a single network that could communicate freely with all of them. Because of the universally agreed-upon standards for bar-coding formats, it was possible to bypass most of the difficulties of language barriers, as well as differing computer systems used by the partners. 24plus simply started producing standardized labels for packages, and introduced hand-held and fixed Psion Teklogix bar- code scanning devices in the majority of its depots.
The Psion bar-code scanners quickly collect and relay information about the individual shipments' position, status and condition. That information is collected wirelessly, so that a reading can be done anywhere in the distribution center. Then the depots communicate the information via fixed lines to the central 24plus hub at Hauneck-Unterhaun, providing a realtime overview of the entire network. Although workers are able to track the shipments centrally when, for example, a customer calls up wanting to know where his package is, the actual management and monitoring of the shipments is done by each individual depot, explains Baumann. That reduces the operation's complexity enormously—given that approximately 1,500 messages whiz back and forth per hour. But, crucially, there is central access to all data, so 24plus can dip in to keep check on quality control and customer satisfaction. It's a great example of bar codes being used to reduce the mess, not just make it go round faster.
Another advantage of the system is that it doesn't even have to span the whole of 24plus's operations: 24plus uses the Psion network in only 40 of the 51 depots that serve the delivery network.Other depots gather and report on different IT systems. But automatically monitoring a majority of shipments through the larger part of the delivery cycle— using a technology that presents no problem with computers talking the same language, even if their users don't—is a huge advantage.
"We have seen immediate and clear benefits from Psion Teklogix's customized solution," says Stephanie Erbert, controlling manager at 24plus. Errors in the packing department are almost entirely a thing of the past, she says, as packages are scanned both on their arrival in the depot and again as they are loaded, giving workers the opportunity to ca tch disparities. Logging the movement of shipment s manually is a thing of the past too, of course. "This has translated into significant savings," Erbert reports.
Building bridges
This kind of intelligent use of automatic data collection in the distribution center has helped bridge a long-standing gap between front-office and back-office operations, says Richard Bauly, vice president of strategy and business development at Psion Teklogix. He explains that companies have been investing for years in front- office computers designed to manage their logistics operations. But gathering crucial information to feed into those computers was stil typically stuck in the dark ages. "You would do the work on the clipboard in the warehouse and if it was readable and accurate—which it usually wasn't—you'd [manually] update the front-end system. There was no bridge," Bauly says. "Now you can bridge that gap between front and back office; it's as simple as that."
Nonetheless, Bauly concedes that adoption of ADC technology is still surprisingly slow. Even though bar codes appear on every retail item you buy, the use of automatic data collection to track and manage the movement of those very same items as they move from manufacturer to retailer, is far from universal.
Some companies are just plain scared of using ADC. Dan Mullen, interim chief executive officer at AIM Global, a Pittsburgh-based trade association representing the automatic data collection industry, says he finds himself increasingly persuading small and medium-sized companies to explore the advantages of the technology. Often, these companies supply large retailers or consumer packaged goods giants, and are already putting bar codes or even RFID tags on their products because the customer has insisted on it. But they aren't using the information embedded in those tags or labels for themselves, Mullen says. Since the judicious application of supply chain visibility can mean the difference between besting their competitors and going out of business,Mullen thinks this is pretty crazy.
Though some companies simply fail to see the opportunity presented by bar codes and other ADC technologies, others, perhaps most, have trouble unfolding their wallets. But, Mullen points out, for small and medium-sized companies it's a fairly minor investment, often measured in thousands, rather than hundreds of thousands of dollars. And he puts the return on investment at typically around eight to 10 months."Innovators and leaders are prepared to make those incremental investments and gain competitive advantage," Mullen says. One of the recent changes in ADC technology is that it has become cheaper and easier to use across the board, bringing bar coding—or an increasingly attractive combination of bar codes and RFID tags—within the grasp of small companies with relatively limited IT capabilities. Mullen says the companies that make and sell ADC technology have recently realized the opportunity in the smaller company sector, and have scaled down prices for smaller systems. Meanwhile, for larger companies, reduced costs mean they can bar code individual items for supply chain tracking, instead of staying at the pallet or carton level of detail.
Waves of the future
Grasping the opportunities presented by the bar code is easy enough; taking the RFID route presents more challenges. Certainly, any manufacturer supplying Wal-Mart will need to tag cargo at the pallet level with RFID tags by 2005 if it wants to keep the business. But, as Mullen points out, suppliers don't necessarily have to use those tags for internal tracking purposes. Although RFID offers the promise of more information gathered more easily (no need for hand-scanning of tags, they announce themselves to a fixed reader), there's the trouble of expense. And, perhaps more importantly, there are unresolved issues of standards. Unlike bar codes, different tags carry different information in a different order, and readers don't necessarily speak the same language. Standards are important so that manufacturers won't have to insert three different tags to satisfy the incompatible demands of, say, Wal-Mart, Target and Home Depot. Mullen says the International Standards Organization (ISO) is due to approve a set of RFID standards by the first quarter of 2004, but there are several competing efforts at present to standardize RFID. Other ADC technologies suffer from a lack of standards too.
That's one of the enduring problems when you look at automatic data collection over the last 20 years, says John M. Hill, principal at ESYNC, a supply chain consulting firm based in Toledo, Ohio. "The absence of standards inhibits the growth of new technology; their promulgation spurs it," says Hill.
All the same, companies such as 24plus are not put off. The company is considering introducing RFID technology for shipment tracking, Baumann reports, though he says it won't happen anytime soon. Psion Teklogix's Bauly adds that, while smaller companies hold off on investments while waiting for standards, big manufacturers and retailers like Ford and Wal-Mart have simply gone ahead with their own proprietary systems.
Bauly is confident that we're headed for the "naked" supply chain, and fast. He predicts 70 to 80 percent adoption of RFID tags in five to 10 years, plus increased mixing in of other technologies such as RTLS.
He also points to cut-price supply chain management applications being developed by Microsoft. He expects other major software houses to follow suit, bringing down the cost of a warehouse management system from $100,000 to $20,000 for example, with cheaper terminals too. "Microsoft," he predicts, "is going to make it more economical for smaller warehouses to jump in and play."
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.