THE JOURNEY to achieving supply chain efficiency may well remind you at times of that summer vacation from hell. You know, the one with the whole family packed into the station wagon, tires going flat when they roll over so much as a bobby pin, and the dog trying to jump out the window as you careen down the road under a brutal sun, your ears ringing to an incessant chorus of “Are we there yet?”
The perennial answer is, of course, “Almost.” But in fulfillment operations, what you can see along the way turns out to be almost as important as getting there. Although bar code scanning systems and radio frequency data communication devices have been used in warehouses for nearly ten years, technical refinements and additional automatic data capture (ADC ) systems can now enable total supply chain visibility when they are tied with the Internet.
The definition of total visibility is simple. Companies must know whether their supplier can fulfill an order or whether they must contact another supplier. Once an order is accepted, a business must know where it is so it can make changes immediately.
Updated automatic product and data tracking equipment tied into Internet systems provides this decision-making information with 99.9% greater accuracy than key entry, says Michael Noble, director of demand fulfillment at technology-based consultancy Answerthink in Atlanta.
Bar codes are no longer just linear, license-plate styles with all the specific information held in look-up databases. Now they come in two-dimensional (2-D) designs that hold tremendous amounts of data. A single PDF417 symbol, for example, carries up to 1.1 kilobytes of machine-readable data. Such codes enable shipper, customer, supplier, and other data to be carried with the package. Similarly, the Uniform Code Council’s (UCC) new reduced space symbology’s (RSS) linear and stacked codes, and its composite symbols combining linear and 2-D symbologies, carry large amounts of data in tiny footprints. Warehouses and distribution centers use these newer codes to monitor product movement, according to Don Flynn, vice president of marketing at Hand Held Products in Skaneateles Falls, NY, manufacturers of 2-D imagers and scanners.
“We’re seeing the rapid adoption of 2-D codes throughout the supply chain,” Flynn says. “They provide complete build-to and ship-to information in real time, on the package. You don’t need to access the complete enterprise database. It creates faster transactions, but more important, when it is used at POS, it will provide information that was not available before.”
Popular 2-D codes include MaxiCode, for high-speed sortation; Code 49, the first 2-D symbology; data matrix for small electrical parts and on unit-dose pharmaceutical packages; and PDF417 for ID cards, documents, electronics, healthcare, logistics, Department of Defense applications, and manufacturing.
General Motors’ new global shipping label — containing human-readable data, a linear bar code, and the PDF417 code — puts it in the forefront of 2-D code adoption. Mandated for use by all GM suppliers shipping parts to or within the U.S. after Dec. 1, 2000, the label contains the part number, quantity, gross weight, shipping dock, to and from addresses, and possibly a material handling code. The new label replaces one with up to six linear codes and a scarcity of human-readable data, says Larry Graham, global manager of automatic identification technology and distributive computing at General Motors.
Standards created by the Uniform Code Council and the European Article Numbering organization and its global equivalents now establish Global Trade Item Numbers (GTIN), replacing country product identification codes. The 14-digit code is expected to be in use in 2005, says Jim Rodriguez, director of logistics at the UCC. With the GTIN, global businesses can use the same numbers in all the countries to identify specific products. It eliminates relabeling when a product enters another country or printing multiple bar codes on products shipped globally.
Products like Strandware’s Label Matrix Corporate Network software for small to medium-sized businesses enable a workstation to send data to any printer over a network or the Internet with appropriate firewall technology. If a client changes a label format, the change is made to the central label file, and immediately all other printers are creating the new label.
It is possible to operate and maintain printers remotely via radio frequency systems, e-mail, cell phones, and Web pages, according to Roman Dziaba, product manager for Vernon Hills, IL-based Zebra Technologies’ Xi series printer. Soon, printers will have a slot for RF PC cards to quickly change printers from wired systems to wireless, just as printers can be integrated with weigh scales and scanners, he says.
Greater scanning accuracy coupled with improved bar code printing and print quality control methods decreases misreads and enables faster conveyor speeds in distribution centers, says Pete Rector, senior vice president, GENCO Distribution System, a provider of fulfillment, distribution, and reverse logistics services headquartered in Pittsburgh. Newer CCD (charge-coupled device) scanners, for example, take a picture of the bar code, and thus are more forgiving of smudges and imperfections than many laser scanners.
New-style scanners like the wrist-mounted finger scanner introduced by Symbol Technologies also increase distribution center productivity, notes Paul Chisholm, iFulfillment’s vice president of operations. Pickers can scan and pick products and still use both hands, rather than having to scan the item first, holster the scanner, and then grab bulk products.
“Most significant and completely new is intelligent imaging for signature capture,” says Hand Held Products’ Flynn. “We are seeing demand for 2-D code in supply chain and direct-to-delivery signing.” Hand Held Products’ Dolphin 7200 with 2-D imager snaps a picture of a signature for proof of delivery and simultaneously ties that to the document’s bar code. Several international postal organizations began pilot projects earlier this year with these imaging applications.
Bar codes are increasingly being connected to electronic data interchange (EDI) applications, says the UCC’s Rodriguez. For example, bar codes on shipping containers and cartons scanned overseas with popular fixed-mount overhead scanners are automatically transmitted in an EDI advance ship notice (ASN) and are available in the United States at time of shipment.
When the product arrives at the receiving dock and its carton-level UCC 128 bar code is scanned, a company’s receiving software system looks up the information from the electronically transmitted ASN. The software program can then receive product, increment inventory, satisfy the invoicing process, and kick off the downstream logistics transactions, says GENCO’s Rector.
Other programs from companies like ESIS, SPS Commerce, Kewill Systems, and Eventra translate and transmit the codes to restricted Web sites, allowing the recipient to print compliant bar code labels and to see — via a PC and a Web browser — exactly what was shipped, when, on what carrier, and the anticipated arrival date.
Radio frequency data collection systems (RFDC) enable warehouse forklift operators to put away and pick in real time. RF/DC is great for short distances within a warehouse and for high-volume applications able to absorb the RF/DC system cost. But lack of standards has hindered growth. De facto wireless standards coming from the international vendor group Bluetooth can change that, says Dave Collins. All digital devices using Bluetooth in a short range will communicate automatically without cables over the 2.4 GHz frequency band. Bluetooth technology is expected to be built into hundreds of millions of electronic devices by the end of this year.
Radio frequency identification tags, devices that can receive and/or send data signals, are another issue. Some people, like Rector, are not seeing widespread implementation of the technology, especially in retail. Answerthink’s Noble says $2 to $3 a tag is too costly. “We have customers still complaining about the bar code cost from thermal transfer printer versus dot matrix printers.”
But RFID tag manufacturer Intermec, in Everett, WA, strongly disagrees. Monte Lucas, Intermec’s manager of supply chain solutions for transportation and logistics, claims “RFID is big.” Intermec is preparing many of its other products to convert easily to RFID systems.
RFID tags are used with high-value items used in harsh environments. Tags are impervious to dirt and grime, weather conditions and rough handling. An RFID tag can carry 100 characters of data, which could require a six-foot bar code, says Lucas. In two years, UCC’s Rodriguez believes, RFID tags may be more widely used as prices come down to the one-dollar, 50-cent, and even 10-cent range.
Standards are an issue here too. If there continue to be multiple standards or none, companies will be reluctant to use the product because a recipient may be unable to read the tags. E-business consulting firm Riverton, located in Burlington, MA, says companies are avoiding the issue, yet capitalizing on their advantages by limiting tag use to within closed facilities. Passive RFID tags on pallets automatically identify the pallet and its contents as it enters the warehouse or leaves it, without the human intervention scanning a bar code often requires.
“In the forefront of new trends is voice in combination with scanning,” says Allpoints’ Habib. Rick Bushnell, president of logistics consultancy Quad II, expects greater use of pick-to-voice technologies. “When verbally directed to pick a product, you don’t have to look at a display screen,” he says. “It’s much more efficient [than looking at a hand-held terminal].”
Global positioning systems (GPS) are being integrated into automatic data capture logistics and order management programs too, so not only does one know where an ocean liner or rail car is, but also what is inside it. That lets companies change where the product will go even before the ship docks, says Greg Richardson, managing director at Riverton. The bar codes or RFID tags have connected the specific product with a specific vessel.
The benefits of ADC solutions fall into four categories: operational, strategic and corporate, customer satisfaction, and supply chain benefits.
Operationally, ADC systems eliminate both time- and space-consuming paperwork. They improve accuracy to close to 100% by nearly eliminating error-prone key entry. They speed up receiving, shipping, picking, and putaway. According to Allpoints, for instance, its customer e-styles.com saves about 30% pick time using a combination of a Symbol Technologies RF system, Hitachi hand-held tablets, and Voxware voice recognition technology.
One of the newer ADC applications streamlines customer returns. Some companies send pre-bar-coded return shipping labels with products, while others allow customers to download labels from a Web page after designating the reason for the return, according to GENCO’s Rector. When that package comes back to the warehouse, a scan of the bar-coded shipping label says where to direct the package. The corporate system knows immediately that an item is now available in stock again, and can be promised to a customer because inventory is updated with a bar code scan from an RF terminal, says Rob Sweeney, director of product management at Acton, MA-based software provider Yantra.
These tools also increase the speed at which the information is distributed throughout the company. Wireless hand-held devices do not require workers to wait until the end of a shift or lunchtime to download data. As these tools and information are integrated with other portable devices such as palm-tops, cellular phones, and laptops, efficiencies and speed of response increase.
That leads us to the strategic and corporate advantages of ADC. Tools like bar codes, as Noble points out, are the “key into tying together tracking and transportation systems, to following a package through multiple systems, to knowing where it is going, and where it has been, all the way back to an SKU.” Such knowledge lets management redirect it for changing needs and co-pack or value-add in transit in real time. “Logistics steps in where merchandising missed,” says Rector.
Using ADC systems also makes demand forecasting more accurate and reliable because it is based on timely and true data, says Habib. When data collection systems are tied into enterprise-wide systems, information is available all the way to the replenishment system and the buyers. More timely communication with supply partners on stock status, based on those more accurate figures, increases the opportunities for less-costly virtual inventories. It also reduces actual inventory level needs.
Now that inefficiencies have been cut out of in-house operations, “companies need greater coordination along the supply chain,” says Yantra’s Tim Walsh.
Businesses do this by linking ADC systems, warehouse management systems, shipping and receiving programs, and other software applications with the Internet or EDI-enabling them. This allows vendors to learn about new orders and low inventory in real time using a Web browser or EDI programs. Reduced delivery cycles can put products on the shelf or in the manufacturing plant two to six days sooner each month.
A global enterprise cannot afford a weak link in its data collection process. Electronically integrated ADC systems benefit the entire supply chain, ensuring that the data used for “turn-on-a-dime” decisions are as valuable as the results of those decisions.
Doris Kilbane, president of the freelance writing and editing company Kilbane Communications, has covered the automatic data capture and supply chain industry for more than 12 years. More recently she has been working with b-to-b software creators. She can be reached at email@example.com