Regardless of how organized you attempt to be, it can still feel as though your inventory moves from one black hole to another because of the difficulty of locating and tracking large numbers of SKUs. For this reason, warehouses and distribution centers have always tried to be on the leading edge (some managers feel it’s the “bleeding edge”) of technology over the last twenty years, pioneering in wireless systems and now leading the way in adopting the latest wireless technologies.
“Warehouses have been using wireless for quite a while, such as scanning guns for inventory tracking,” says Dennis Gaughan, a research director at Boston-based AMR Research. “These days, a lot of companies are going through an upgrade cycle to their wireless technology — from proprietary technology to standards-based technology. The products tend to be standard, off the shelf, and priced reasonably, so even small warehouses are getting involved. With the emergence of the 802.11 wireless standard, people are upgrading their networks to achieve better performance, and also gain the flexibility of not having to be locked into a single vendor.”
The backbone of wireless systems is RF (radio frequency) technology. RF provides paperless communication between operations and a main computer system. It is frequently used at receiving docks, on lift trucks and containers, and in hand-held or mobile operations. Typical RF technology contains type numbers, production dates, order numbers, and customer numbers. The systems can be used to track shipments, compare shipping information with purchase orders, and verify carton contents.
RADIO FREQUENCY IDENTIFICATION
The “workhorse” of RF is a radio frequency identification (RFID) tag containing an integrated circuit and a reader that emits radio waves. Tags can be applied to products, containers, pallets, and vehicles. The tag stores data, which is captured when it passes by a reader. The information is then relayed to a computer. The technology features non-contact reading, meaning that it can read through substances such as grease, grime, and dust, thus providing better accuracy than traditional bar code readers offer. “For these reasons, RFID tags are quickly replacing bar code technology in warehouses,” says Gaughan. “RFID technology reduces errors and improves supply chain efficiency.” Instead of each pallet or item having to be physically scanned, each item is affixed with a tag, and then passes through a reader on a conveyor belt. This way, adds Gaughan, “you can get the same level of inventory visibility without the effort required of scanning manually.”
According to technology market research firm Venture Development Corporation, global shipments of RFID systems totaled almost $900 million in 2000 and are expected to reach $2.6 billion by 2005; Allied Business Intelligence reports that over 300 million RFID units were shipped in 2002 and projects that number to jump to 1.6 billion in 2007. “The whole RFID concept has taken hold in the last year, especially with the involvement of companies like Proctor & Gamble, Kodak, Gillette, Wal-Mart, and Target,” says Ralph Drayer, chairman of Cincinnati-based Supply Chain Insights, which helps retailers and manufacturers create supply chain strategies. Global standards initiatives are gaining support, and as the cost of RFID comes down substantially, its application can be much broader. “It is now cost-effective to use RFID with paper towels, not just expensive products,” points out Drayer. “I believe RFID will eventually become the electronic product code, replacing the UPC. I think this is one of those technologies where you want to be part of the lead, rather than the follow.”
Radio frequency data collection (RFDC) is an enhancement of RFID. This technology can connect a host computer and one or more data sources with radio links, facilitating communication among them all. RFDC is the core of real-time locating systems (RTLSs). An RTLS allows a tagged inventory item to be tracked through a warehouse. By attaching RTLS tags to containers and installing vehicle-mounted wireless terminals on forklifts, managers can access real-time inventory information. Locating systems can be also used for container management, yard management, call systems, asset management, and job order tracking.
Wireless technologies can operate within three types of networks: LANs (local area networks), PANs (personal area networks), and WANs (wide area networks). A LAN is a communications network serving users within a defined geographical area, such as inside the four walls of a warehouse or DC. Using electromagnetic waves, LANs can manage assets and information on a larger scale than RTLSs by transmitting and receiving data over the air, combining data connectivity with user mobility. Using LANs, warehouse workers can exchange information with central databases to improve productivity. According to a study conducted by the Wireless LAN Association, the average payback time for the initial cost of a wireless LAN installation was just under nine months. Approximately 97% of respondents said the systems met or exceeded their expectations to provide competitive advantage, and 92% reported economic or business benefits. A WAN connects LANs together to provide wider coverage.
A PAN utilizes Bluetooth technology, which offers short-range wireless service. Bluetooth creates a network within a network that allows devices such as bar code scanners and portable printers to talk to one another without cables while staying connected to the LAN. Wireless printers are particularly useful in cross-docking operations, because they can re-label incoming shipments and eliminate the need for workers to enter the warehouse to obtain labels.
Make no mistake: Wireless technology replacing cable is a good thing, if for no other reason than that cables need to be replaced frequently. In the area of printers, though, there is an even newer advancement — networked printers. Using a networking device, a manager can control all printers in every facility from a single remote location. The system can download new label formats, monitor printer failures, redirect print jobs, and configure remotely. The printers can also be set up to issue alerts to IT managers by e-mail, cell phone, or pager if there are problems with a printer (such as running out of paper or ribbon). And while wireless printers require two radios (one at the printer and one at the terminal controlling the printer), a network printer needs only a network card, because the terminal already communicates with the facility’s wireless system. Currently, there are two types of wireless network printers: portable, generally used for picks and putaways, and desktop, used for pallet identification and shipping labels.
When considering wireless technology for warehouses and distribution centers, the first step is to identify the applications you want to run and see how wireless can help. If wireless technology meets your needs, you must address deployment issues, such as conducting site surveys to make sure the deployment environment will be acceptable (for example, without “dead spots”). Another concern is overload. “One thing people are used to in the wired world is that the bandwidth has gotten much bigger,” says Gaughan. “In a wireless configuration, you have a shared network connection.”
A third — and paramount — concern is information security. While the 802.11 standard allows interoperability among equipment from different vendors, security breaches are possible. “This isn’t insurmountable, but it needs to be addressed,” says Gaughan. “For most companies, it’s just a matter of taking the proper incremental steps for security. The key is creating a balance between how much you want to spend to secure the network versus the sensitivity of the data being transmitted.”
William Atkinson is a business writer specializing in workplace issues. He can be reached at firstname.lastname@example.org.
Face the Music
Musician’s Friend, a mail-order musical instrument company based in Medford, OR, consolidated its facilities into a single DC in Kansas City about three years ago. When the company opened the facility, it had to move in fairly quickly. “The building was still being constructed in terms of setting up the racks and conveyors,” explains information technology director D.J. Buell. “Rather than having to hard-wire all of the locations where we felt we would need workstations, we started out with a complete wireless network, using 802.11b ‘wi-fi’-type networking.” All of the company’s PCs were also connected wireless. Quest Solutions provided a variety of wireless technologies.
A wireless application called “auto check” enables checking order completeness and accuracy before shipping; a program from Symbol Technologies performs cycle counts. “All of the applications we use are Web-based,” Buell says. “We run the Web browser on a Symbol radio. The applications are quick to develop and easy to use.” Using wireless, Musician’s Friend created an application to “marry up” products of different sizes into a single order for packaging.
Buell’s biggest challenge was integrating wireless technology into the company’s back-end system. But while working on a returns processing project, the company found that by integrating that application into its back-office system, it could create components that would also work in wireless applications. “We are now connecting our Web applications through to our back end using terminal-based connectivity,” says Buell.
He adds that wireless has improved productivity markedly: Receiving, putaway, and payment processing are much faster. To date, Musician’s Friend has not invested in a large warehouse management system. “However, we have developed the basic functionality of WMS ourselves and deployed this on wireless Palm devices,” Buell says. “If we continue on this path, we may be able to avoid the fairly large investment of a large-scale WMS.”
Food for Thought
Detroit Gleaners, the seventh largest food bank in the nation, operates a warehouse and three satellite distribution centers serving five counties in southeastern Michigan. With food donations down and demand up, Detroit Gleaners realized it needed to become more efficient. One solution was to implement an inventory control WMS, designed by SYS-TEC, along with vehicle-mount terminals from Intermec Technologies. This past year, the facility switched from batch to real time, using Intermec’s wireless hand-held computers, MobileLAN’s access points, and EasyCoder’s bar code label printers.
In 2001, six order pickers were able to pick 14 million pounds of food; after wireless was installed last year, that quantity jumped to 24 million pounds, with only three pickers doing the job. “Implementation was relatively easy,” says Agostinho Fernandes, president of Detroit Gleaners. The system did not have a bar-coding component, but because the company’s processes were already based on bar code technology, “the change from batch to a wireless system was insignificant,” Fernandes says. “When we moved from batch to wireless, we were getting verification in real time.”