Trucking Technology Report - Dec. 27
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Both the online report and e-mail are sponsored by @Track Communications, a supplier of wireless communications and dispatch services.
Today's Technology Headlines:
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Grocery Supply Chains: Slow and Unsteady
Wholesalers want to offer a variety of items, but they also want to be efficient shippers, and unique and specialty items often move more slowly than standard items.
Retailers use operational execution as a competitive weapon, and some industry sources say that the ability to satisfy customers justifies the placement of slow movers in the logistics stream, but most logistics experts think that slow-moving SKUs should be removed. Consultant Roy Strauss says that warehouse operators who keep slow movers have to purchase 25% to 35% more space as well as conveyors and equipment, and pickers get fewer selections.
In the interests of keeping customers happy, however, some operators - especially independent ones - try to have the items their customers want. Strauss acknowledges that proper purchasing and inventorying can keep the investment in slow movers low.
Associated Food Stores has acquired an additional facility for its Salt Lake City distribution center, and has designated an area for slow-moving items. The company was then able to increase its selection of items. Family groupings are lost, but unique items and live extensions are positioned within the module.
Strauss points out that independent operators can also handle requests for slow-moving items as special orders. Wholesaler URM has partnered with a third-party operation to handle the specialty foods that make up much of the slow-moving products.
Industry experts suggest that warehouse operators conduct purchasing and inventory studies before deciding which selections to stock. Supermarket News (12/18/00) Vol. 48, No. 51, P. 13; Williams, Mina
Getting Your Whole Supply Chain Connected
Business-to-business communications is the latest rage in corporate organizational development investments. Researchers found that $20 billion has been spent already this year and predict a signficant jump to $64.8 billion corporate funds being invested by 2003.The renewed interest in B2B is driven by aspects of optimizing the current collaboration between vendors and suppliers and to cut costs. Many large companies are already utilizing a twenty year old communications concept called electronic data interchange (EDI) that used VANS or value-added networks. EDI cut company costs by eliminating paper transactions, but had limited usage to only about 20% to 30% of a large company's supplier base and was too expensive for small companies to install.
To gain the full range of benefits that comes with a B2B installation with the XML document exchange system requires the total networking and financial commitment of all parties involved. Today's marketplace offers strong incentives for companies to commit to an upgrade or make radical changes in their current systems, but the riskiness of the investment for many small companies is all too real. Midrange Enterprise (12/00) P. 12; Saneii, Kian
Changing the Name of the Dot-Com Distribution Game
Companies view wireless technology as the simplest way to boost visibility and increase efficiency, and its flexibility offers personnel mobility as well.It can bring real-time monitoring too, and AMR Research senior analyst Dennis Gaughan says that the technology is about to become very big. He says that companies that use wireless can fill orders faster and can save 3% to 5% on operating costs.
For example, warehouse and delivery staff armed with scanners can record barcode data and transmit it, wirelessly and in real time, to a central database. The system can then analyze the information and direct workers to deliver certain components to a specific place for consolidation and shipment; it can also determine the most efficient route and send it to the closest or most able person.
Industry experts say that the new ways of doing business could mean the end of the more traditional fulfillment business; a KPMG survey of global logistics companies indicates that 28% expect to go out of business due to consolidation or competition from high-tech newcomers.
Meta Group analyst Gene Alvarez points out that last year's holiday e-tailing disaster was due to the inability of several prominent companies to deliver goods on time. Dotcom Distribution, which uses wireless technology, has a paperless distribution system that is designed to get each order out on time. Its distribution center is near a port, a major airport, big highways, and the shipping facilities of the U.S. Postal Service, United Parcel Service (UPS), and FedEx (FDX).
CTO John Polis says that every inventory move is known through use of a radio frequency; the company handles order fulfillment for retailers, and the retailers say that Dotcom Distribution can get shipments out the door mere minutes after the orders come in. Distribution center workers and drivers say that wireless eliminates drudgery and stress along with paperwork.
LaserShip.com CTO Helen Campbell says that customers value being able to monitor their deliveries, and her company gives drivers two-way pagers so information can go straight to a Web site for customer access.
The leading shipping companies are also going to wireless technology. FedEx Ground is implementing an $80 million data-collection system with on-van computers, handheld scanners, ring scanners, and wireless local and wide area networks. Updates arrive in real time.
Airborne Express uses radio-frequency, logistics, and enterprise resource planning software to handle overnight delivery and warehousing facilities.
Industry experts say that wireless technology can now handle day-to-day commerce, though there is still room for improvement in hardware and standards, among other things. InformationWeek (12/25/00) No. 817, P. 130; Robb, Drew
CPFR Slow to Catch On in Grocery Industry
Collaborative planning, forecasting, and replenishment has been tested with success, and analysts and observers say that it is the next big thing for supply chain efficiency. However, the grocery industry has not taken to the idea on a wide scale.CPFR evolved from various streamlining initiatives, and it links the supply and demand processes to make the chain more consumer-driven, requiring complete collaboration and information-sharing among trading partners. The voluntary inter-industry commerce CPFR committee has created guidelines for CPFR, and says that integrating demand and supply side processes through CPFR improves efficiencies, reduces inventory, fixed assets, and working capital, increases sales, and satisfies customers - for the entire supply chain. Syncra Systems director Tim Paydos says that fluctuations in consumer demand have driven collaboration, producing the need for a fast and flexible supply chain without inventory.
Those who have piloted CPFR have seen improved in-stock levels and increased sales and category growth rates. Experts say that trading partners considering CPFR must understand that senior management must know what is and is not collaboration; corporate ownership has to be driven internally by a compelling business case; the vision of an e-business collaborative strategy and best-practice mitigation plan must be clear; a change-management plan is required; trading partners for pilots must meet or exceed the user's supply chain capabilities and must be ready for CPFR; internal collaboration is frequently harder than external; business processes must be aligned before starting; and that CPFR is part of a corporate e-business strategy, not an initiative.
echnology is growing to meet the needs of CPFR. Some analysts think it will expand to collaborative merchandise planning and optimization. Grocery Headquarters (12/00) Vol. 66, No. 12, P. 69; Paddock, Alison
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