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Turbo-charged Supply Chain Visibility

October 1, 2012


Dan Gilmore, editor-in-chief of Supply Chain Digest, predicts, “While companies have been pursuing increased visibility over the last 10 years, and it usually shows up on the priority list of corporate supply chain strategies in various surveys pretty regularly, we are now on the cusp of a brand new visibility era.” [“Turbo Supply Chain Visibility,” 24 August 2012] Although many companies are still learning to walk when it comes to supply chain visibility, Gilmore is suggesting that they will have to learn to run if they are going to keep up in the future. He indicates that a number of things have changed including the fact that “the technology to deliver near complete supply chain visibility is here, and companies can now see a path to getting there at a level hardly imagined before.” He calls this “turbo visibility.” He continues:

“While no one has reached it completely yet, in specific areas of their supply chains many companies have achieved near total visibility, and see a path to achieve those same capabilities in other areas. A variety of technology tools used in various combinations are making turbo visibility possible.”

The first technology that Gilmore discusses is tagging; specifically, Auto ID/RFID. He writes:

“Traditional bar coding has been an important tool to increase accuracy and hence visibility for two decades, but RFID has many advantages (automatic readability, no line of sight) that eventually will lead it to dominate the auto ID landscape. ‘Inlays’ (chips before they are put into a label) for passive RFID tags are now down to about 6 cents apiece, as the cost barrier to RFID will continue to fall. More expansive use of RFID to enable automatic reading of goods/assets will really be key to turbo visibility, however, but I believe we will see that start to happen over the next few years.”

I have written a number of posts about RFID tags and their cost figures prominently in every one of those posts. The RFID Journal reports:

“Most companies that sell RFID tags do not quote prices because pricing is based on volume, the amount of memory on the tag and the packaging of the tag (whether it’s encased in plastic or embedded in a label, for instance), whether the tag is active or passive and much more. Generally speaking, active tags are $25 and up. Active tags with special protective housing, extra-long battery life or sensors can run $100 or more. A passive 96-bit EPC inlay (chip and antenna mounted on a substrate) costs from 7 to 15 U.S. cents. If the tag is embedded in a thermal transfer label on which companies can print a bar code, the price rises to 15 cents and up. Low- and high-frequency tags tend to cost a little more.” [“How much does an RFID tag cost today?“]

Fortunately, research continues in this area and, as Gilmore reports, costs are falling. The next technology that Gilmore discusses that fosters turbo visibility is wireless/mobile. He writes:

“The growth of wireless technologies and devices from beyond the distribution center floor to other areas of the supply chain is extending the reach for real-time communications and automatic data capture supply chain wide.”

One can hardly overestimate the importance that wireless/mobile technology has had on the supply chain. When supply chains went global in a big way, mobile technologies were also being introduced into the developing world. The speed and extent of mobile device penetration surprised even the experts. Mobile devices facilitated both local and global communications. The next technology discussed by Gilmore involves sensors. He writes:

“Technology for monitoring temperature, moisture, etc. have been around for decades, but are now increasingly being tied to RFID and other communications technologies to provide real-time visibility to environmental conditions and changes.”

These types of sensors are particularly critical in pharmaceutical and agricultural industries. A recent NBC investigative report reveals how some food rots on the way to store. Not only does this result in needless waste it endangers health. Proper sensors and monitoring can protect the public, ensure that products get to market in sellable condition, and identify transportation firms/drivers that fail to maintain proper standards. A complementary technology that Gilmore discusses is motes:

“A [mote is a] small wireless device that when deployed with other motes can form its own communication network by ‘talking to each other’ without human intervention. Motes are often connected to sensors, especially in manufacturing.”

It has been predicted that machine-to-machine communication networks will eventually be larger than human-to-human networks. For more on that topic, read my post entitled Machine-to-Machine Communication. Gilmore’s next technology is familiar to most of us — Global Positioning Systems. He writes:

“Increasingly sophisticated GPS technology provides a real time view of where a truck, a person, or even a pallet of inventory is in the supply chain. That can enable, among other benefits, dynamic routing in case of delays.”

To learn more about how GPS-enabled systems are improving the trucking industry, read my post entitled Innovations in Trucking. Video is the next technology discussed by Gilmore. He writes:

“Video technology is now being used primarily in a reactive way (a customer says the order is wrong, supplier shows video evidence the carton or pallet was accurately built). But ‘video analytics’ are coming that will also enable more proactive use of video. It will become ubiquitous in our supply chain over the next 5 years, dramatically changing supply chain visibility opportunities. Often, companies will be able to really ‘see it,’ not just on a computer screen.”

My company, Enterra Solutions®, already helps organizations securely share video feeds. In our case, the video feeds come from closed-circuit television systems used for monitoring the security of port facilities. When a security breach or other emergency occurs, video feeds can be securely shared with appropriate responding agencies. Gilmore, however, is talking about more that sharing video feeds; but, secure data sharing is essential if video analytics is going to become as important as Gilmore predicts. The next technology discussed by Gilmore — the Internet — is not new, but people continue to find new ways to use it. He writes:

“Obviously, [the Internet is] a broad communication pipe that provides the ability to communicate and share data easily, often with less painful connectivity efforts and potentially even ‘ad hoc’ connectivity.”

Although the Internet has been a boon to companies for some time now, Gilmore’s final technology — the Cloud — wouldn’t have been possible without the Internet or World-Wide Web. He writes:

“[The Cloud is] related to the Internet, but the real promise is visibility-related workflows and the ability to house and manage supply chain data in a multi-party environment. Few people understand yet how significantly Cloud-based data will significantly impact supply chains.”

James Blaeser, publisher of American Shipper, asserts that the best international transportation management (ITM) companies (whom he calls “the winners”) meet three key criteria, all of which relate to supply chain visibility. These criteria couldn’t be met without cloud applications because, he writes, “Data quality is the cornerstone of visibility.” Given these technologies, Gilmore says, “What the industry and individual companies need to do right now is to begin thinking about what this really could mean for our/their supply chains, and develop a vision and a roadmap.” He believes that achieving turbo visibility would “be a game changer.” He continues:

“One of my favorite supply chain quotes comes from Nick LaHowchic (former supply chain executive at The Limited Brands and others) and the late Dr. Don Bowersox of Michigan State. In their book of a few years ago ‘Start Pulling Your Chain,’ they wrote: ‘If information was shared fluidly between participating firms in a channel, then a great deal of “anticipation” would be replaced with facts. In a collaborative environment, it would not be necessary to forecast what others are planning to do or what they are planning to buy – you would be able to see it.’ Turbo visibility then isn’t really just about making some incremental gains in supply chain performance and customer service, though those often are the first notices benefits. Rather, it will alter in many ways, most of which we don’t well understand at present, the entire supply chain paradigm.”

That’s the way it is with most new technologies. We don’t really know how they are going to be used or affect our lives until they actually get into the hands of users. Think of all the ways that Kinect, the motion sensing input device used by Microsoft’s Xbox 360 game console, has been used since it was first introduced. Gilmore concludes:

“Visibility to demand, inventory, capacity, etc., is already serving to dramatically change our traditional notions of supply chain planning and execution. As the impact of our plans becomes visible in real-time, and companies react and make adjustments, where does operational and in some cases even tactical planning end and execution begin? The lines are increasingly blurred, and will get more so. … [Thanks to GPS] we may be the last generation who can actually get lost. We’ll be telling our grandkids how it was once actually fairly common to get lost, and they will laugh at how funny that idea seems. The point: if we can’t get lost, then neither can our supply chain stuff up and down the chain.”

Ultimately, turbo-charged visibility will reduce costs and improve the use of resources. It will also mean a lot less guessing and a lot more knowing about where things are in the supply chain.

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