The Logistics Execution System Association (LESA), part of Material Handling Industry of America (MHIA), held a seminar on logistics technology in Houston recently. A highlight of the event was a Q/A panel discussion involving representatives from some of the leading technology vendors in this field. Here are some of the key takeaways from that discussion:
On radio frequency identification compliance:
Stanley Chew, director, international operations, HighJump Software:
"RFID is treated as warehouse management systems [WMS] were 20 years ago. We’re enamoured with all this hardware stuff. It reminds me of the old days when a giant sortation system was put in and then they’d find the software to fit. You have to take a realistic approach. You can’t do RFID without a WMS. In Canada you have multi-cartons on a pallet and push them out the door with compliance labels that have imbedded RFID tags on them, all of which goes into the WMS. But you have to say time-out. You have to automate the entire supply chain to be able to play with RFID."
Janine Renella, logistics consultant, RedPrairie:
"Many customers don’t have the time to take a holistic view. They have to backpedal to support a compliance requirement."
Dave Healey, director, account management, Lilly Software Associates:
"What I’m running into with customers of mine, the top 100 Wal-Mart vendors, they have to provide pallet-level RFID labeling. But they’re trying to get their arms around how they’ll implement this and take advantage of item-level tracking. They just haven’t figured out how to cost effectively benefit themselves while complying with Wal-Mart. Getting it down to 5 cents a tag is a ways away."
John Hill, principal, Esync:
"Newton didn’t lie. There’s a physics issue. Twenty years ago they said you’d never be able to read more than one RF tag at a time due to the RF energy emitted by one. Well, we can do it today. Look at the value it can bring to your operations. Then talk with prospective suppliers about filling in the blank vis-a-vis standards not yet produced or published. Ask the supplier if they can ensure a migration path to compliance with the standards once produced. If they can’t answer that question, they haven’t thought very deeply about it."
On the state of standards:
Jeff Marchlewski, regional sales manager, Provia Software:
"I’ve worked extensively with Advance Ship Notices [ASNs]. You have value-added network [VAN] interaction with companies like Gentran and the need to pull information out. An ASN is probably the most difficult electronic transaction when it gets down to the component level, license plates and carton content. If you’ve gone through the process of developing it and you’ve done the mapping, you’re not done. Because that’s different from the next customer’s requirements and the next."
"Bar codes began to fly when standards were promulgated. RFID will begin to fly faster when the standards are resolved. That probably won’t happen before year-end, regardless of what you read. The same is true of EDI and ASNs. Follow the standards."
"Most manufacturers in the U.S. are make to order, not make to stock. Of those, most are sub-$20 million. They have trouble implementing Microsoft Word, let alone going out and getting Gentran. We have these natural governors in the supply chain that make the purity of ASN across all suppliers very difficult to achieve. If you have a bill of material where you have a vast number of components that come from a variety of different suppliers and one half can give an ASN and the other half can’t, you’ll have trouble at the execution layer. It’s just a natural challenge."
On transportation management:
"Transportation management requires good labor planning. You need to know how long it will take to fill an order so you can schedule an outbound appointment for a particular carrier to be able to pick it up without sitting at your dock for two hours."
"Something I’ve seen a lot more recently is the yard management aspect. We need to make appointments with carriers and be able to track the ones who are late. Since the Transportation Hours of Service rule took effect, we’ve seen a lot more attention paid to that. Any good WMS will allow you to do that so time spent at the dock is minimized."
"It’s relatively straightforward to be able to plan for outbound flow when you have inventory in the facility. Getting to where you have no warehouse at all takes enormous company pressure to create appointment schedules. Getting predictability on incoming is a challenge. Transportation management is one application that people should spend more time on. There are huge cost savings if you get it right."
On most common mistakes:
"The lack of involvement of operating people in defining requirements, assessing alternative solutions and becoming part of the team prior to selection and implementation."
"Trying to buy a system of consequence with a small budget and expecting the vendor to do it all. Shame on the buyer and shame on the vendor who enters that relationship."
"Not having someone in your company who will champion the project and get upper management support."
Darryl Ferguson, regional sales manager, Psion Teklogix:
"Not setting realistic goals and objectives. If you don’t set reasonable goals, you’ll lose faith in the system. It has to evolve, but you must figure in all the environmental factors to make the project a success."
"Lack of training. You need an ongoing training program so as new people come in they learn from someone who has been there. If you have good people who are trained well on the product, you’ll get the most value out of the system."
"Many times information technology managers will make a buying decision that is pushed onto operations managers, or ops managers will make a buying decision that IT can’t implement. There’s no collaboration between the two."