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From: JTP PR on 14 Jun 2010 09:04
Logistics is getting smarter thanks to data warehousing and business
When logistics systems run well they re like the umpire at a cricket
match. We all know that they re around but we don t really notice
them. But if they make a mistake then the spotlight shines brightly on
their every move.
Today s supply chain is far less forgiving and demands greater
efficiency and bang for buck than it ever has. A number of
technologies allow businesses to wring out every dollar of value from
the supply chain.
And it s two older technologies that we re seeing as the main enablers
of this change: RFID and business intelligence.
With many years of experience in warehousing and logistics Stuart
Jones national transport manager of McKey Distribution says that the
last few years have been about data convergence.
Distribution companies can pull data from several sources and combine
it into a single system that can predict or explain problems.
"It s the meeting of different types of source data such as
telematics route management into a visible and usable system that can
enhance operations especially in day to day activities. That would be
the key thing."
McKey Distribution delivers food products to over 800 hundred delivery
points right across the country. It boasts two of the longest delivery
routes in the world running 2800 and 3200 kilometres. The distributor
delivers food that needs temperature control and can have a short
shelf life. When the supply chain is working at its optimal McKey
knows food can arrive to its customers on time and in good condition.
McKey Distribution uses software from Infor. Route Pro is used to
manage the complexity of a supply chain that is time-critical. It
manages stock picking from the warehouse based on expiration dates and
takes into account delivery times so that the customer gets a product
that is fit for consumption.
David Fenner manager of the industry development group at Motorola
Enterprise Mobility Solutions agrees that the assimilation of more
data sources has been the most important trend of recent years. His
group is tasked with bringing solutions to the global market.
"The point of activity has been a movement from data capture within
the four walls to data capture outside the four walls. There are more
solutions using a wide variety of remote communications " he says.
Despite the trend to collect data throughout the supply chain the
technology that was meant to deliver data from manufacture to disposal
- radio frequency identification (RFID) - hasn t been universally
Chris Stephenson Australian managing director for Manhattan
Associates says there hasn t been a significant uptake of this
"Things like the Walmart initiative which received a lot of play a
few years ago now is not being actively pursued. Although that s not
been publicly announced there s not a lot of pressure [from Walmart]
on suppliers." Manhattan Associates sells supply chain software and it
has hundreds of customers in Australia; not one is using RFID even
though the software supports it. RFID is "a nascent technology purely
because it s a technology trying to find a solution. It s turned into
a closed solution benefit " says Fenner.
RFID has been around for quite some time. Modern systems were patented
about 40 years ago and are found all over the place. One of the most
common applications is in the e-tags used by toll road operators to
collect revenue and track traffic movements.
Active RFID tags contain a battery and transmit data to a receiver
without any external stimulus. Passive tags don t have a battery and
react to an external signal to provide data. However there are
battery assisted passive tags that lay dormant until they receive an
As well as providing a tracking mechanism RFID tags can store data as
product information. For example beef exporters provide information
about the source of a cut of meat as the path it has taken through the
supply chain. The RFID tag can be on the actual product on the
packaging or on the pallet.
Australian RFID provider Ramp delivers tracking solutions to many
different industries. In one project the company assisted Optus with
asset tracking. While many companies use barcodes to label equipment
the codes can only be read when you can see the asset. With an RFID
tag the reader can read the tag without it being in line of sight.
Ramp deployed its OnRamp Asset Tracker program at Optus to track the
movement not just of tagged items but which member of staff (who
carried their own tags) had moved them.
Similar systems can be used for document tracking as well. RFID
document trays can be used to find lost documents but they also offer
huge security benefits. Where a document can only be viewed by a
limited group of people or can t be removed from the office an RFID
system can be used to track possession and set off an alarm if someone
tries to take a document past a secure perimeter.
RFID was touted as an open solution that would deliver a whole of
supply chain view. However it s ended up being used within specific
parts of the supply chain. "If you look at a container trucking
solution RFID could be ideal because you re in control of every asset
and know all the bits of information you re providing " says Fenner.
"When you take this to an open system you re not able to define all of
the information that could be collected or the quality of it. That s
why RFID has struggled in the mainstream."
"RFID will deliver an explosion of data" that will lead to "telco
styles level of data" predicts Glen Rabie CEO of Yellowfin a
business Intelligence solution provider. Whereas in the past the
measurement of the supply chain was quite coarse RFID will allow
collection of highly detailed nearly real-time data every fifteen
Rabie says RFID was a technology ahead of its time. "The use will be
customer rather than supplier driven when customers want to know the
entire life of a product. It s currently a non-event but when large
logistics companies start to use it it will become expected " he
"There was an awful amount of hype more than was justifiable but the
technology will mature. It was held back by the ability to manage the
data volume that was being created [and analysed]. We ended up
collecting all this data but couldn t process it so it was useless."
The technologies around RFID have caught up and have really matured
over the last three or four years especially with the invention of
Google Maps which companies can use to plot information collected by
"Now we re able to deal with the billions of rows of data and we can
use GIS [geographic information systems] to map data. We used to have
GIS gurus in the backrooms but we can now expose it to management "
The issue of dealing with all that data might be OK for a large
company with a big IT department and a generous budget but what about
SMEs? Rabie s view is that the providers of RFID gear will offer a
full service where they supply the hardware collect the data and
process it for you as part of a subscription service.
So when should SMEs look at dedicated logistics solutions? "Typically
we see there are three reasons why businesses start to look at a
dedicated solution " says Stephenson. "They ve used their accounting
system or spreadsheets or a combination to run their warehousing and
transportation. Eventually they either want to improve their customer
service improve their inventory accuracy or improve their own
Many companies on a growth trajectory need systems that can scale.
They want to know that their systems will work when they add staff and
move into a larger distribution centre. They re also looking for
flexibility so that can be more reactive to their customer s demands
and more nimble with their product offerings.
All of this has driven another significant change in modern logistics
technology. It s all getting a lot more user-friendly. Customisation
and configuration is now more available to staff on the floor rather
than needing the IT department if they have one to make system
Web-based programs becoming popular let customers access systems to
find out what inventory is available and determine the status of their
One of the challenges many companies face is the seasonality of their
work. For example in the fruit picking industry more staff are
required during certain times of year. Manhattan s solutions for SMEs
have an interesting take on this.
Rather than making the customer invest in bar code scanners or RFID
readers for a work force that might only be in place for a few weeks
of each year they use a paper-based system that can be scaled up as
needed without significant capital investment.
The role of business intelligence tools has come to the fore. Jones
from McKey Distribution houses all information in a data warehouse
and uses business intelligence for "total visibility".
"I have a dashboard running that tells me what my loaders are doing. I
can see what my assets are doing and how we are in lead times and
other customer satisfaction measures " says Jones.
There are many BI tools to choose from. One of the challenges is to
find a tool that integrates with your ERP or logistics platform.
In the SME space Yellowfin has worked with Australian company
Translogix to develop solutions to optimise warehouse fleet and
routes. Yellowfin deploys services to customers who need logistics
systems but don t want to live with the hassle of installation and
Translogix now uses a reporting system that lets it monitor key
performance indicators so customers can identify and track issues as
they arise. It helps the company make better strategic decisions for
the long term improvement of the supply chain. This solution is
delivered to Translogix clients who require the reporting.
Supply chain reporting includes alerts when problems arise
longitudinal reporting to uncover trends and comparative and
However Rabie thinks that we re on the cusp of a change.
"I recently downloaded a book on reporting from 1939 and not much has
changed other than the volumes of data. But one big difference with
today is real-time predictive analytics. That s what Yellowfin will be
changing to - the ability to mine the data on the fly and start
churning out models.
"We ll be able to see in the middle of the day that a truck won t be
able to complete its run by 3:00 pm so we can get another truck onto
the route to do the next run. This will make logistics more like
financial markets in the way they manage and react to incoming data
It s likely that other data sources outside the direct control of the
supply chain manager will become part of the equation. For example
real time traffic and weather forecasts factors that can have
significant impact on supply chain efficiency can be pulled in to
provide a fuller picture and to make more accurate predictions.
The great challenge for SMEs is to remove inefficiency so less time is
wasted and fewer tasks need repeating. The most expensive problem to
rectify is a missed delivery that has to be done again. When those
issues are solved not only are costs optimised but service to the
client is improved.
To avoid those issues businesses need to move beyond home-grown
spreadsheets and inflexible accounting software with a logistics "bolt
on" and find a solution that offers flexibility and reliability.
Businesses without their own IT department don t need to miss out as
third party service providers might start selling not just the
hardware but the ability to collect and package the data on the