Supply chain tracking possibilities expanding

In this expert tip, learn how technology like RFID and the Internet of Things is changing supply chain tracking.

Supply chain managers always appreciate increased visibility. An enhanced view of where inventory is -- especially while in transit -- enables many opportunities to detect and react to developing situations, monitor unfolding disruptions and make adjustments on-the-fly as requirements change.

Until recently, there was very little a supply chain's master could see or do outside of the warehouse. Barcoding and warehouse management systems (WMS) could keep close tabs on what came in, where it was stored and what went out. Once it went out the door, however, inventory disappeared until it arrived at the next warehouse and was once again logged into stock.

In-warehouse supply chain tracking has greatly improved with radio frequency identification (RFID) technology as a supplement -- but not a replacement -- for barcodes. RFID tagged items, cases and pallets can be logged into trucks and containers. The tracking system will know exactly what is in each load and even the sequence -- what's closest to the door and what's buried in the back. Now add location-based technology like GPS and the in-transit inventory becomes visible throughout its journey.

If a truck or train is delayed, monitoring systems will know it, perhaps long before the shipment misses its scheduled delivery. There may be actions to take to minimize the impact of the delay, or at the very least the intended recipient can be warned, giving them the opportunity to rework schedules or make substitutions.

Supply chain tracking and shipping

Another intriguing possibility is the ability to re-direct shipments en route. Say a shipment leaves the East Coast factory bound for a Chicago distribution center. While it's crossing Ohio, the shipper learns of an unexpected and high priority shortage in Nashville. The shipment containing the needed items could be diverted south, filling the need and saving money at the same time -- the goods wouldn't have to go to Chicago, move into and out of that warehouse and then be shipped to Nashville.

An extension of this idea is to start a shipment without a confirmed pre-set routing. In a fast-moving market with rapidly changing demand, the flexibility to direct a shipment to any one of a number of destinations with a shortened lead time -- the shipment is already part-way there -- could be a real competitive advantage.

Supply chain tracking and the Internet of Things

We have not yet reached the stage where everything is connected to the Internet, often referred to as the Internet of Things (IoT), but that day is fast approaching. As it arrives, supply chain managers are getting more visibility which should add to control and efficiency.

After some initial resistance from consumers over privacy concerns, RFID is starting to have a notable impact in the consumer products area, with some success in the fashion clothing retail segment. Inventory control is particularly critical in this segment. Fashions change quickly and retail outlets must have the latest styles and colors immediately, but they must also minimize unsold merchandise that has to be discounted when the fad fades.

With an RFID tag on every item, stores have much better visibility of what they have and what is or isn't moving. High availability with minimal store inventory and super-fast replenishment from strategically placed and closely monitored supplies is a winning formula powered by RFID. These stores and suppliers are also able to shift merchandise from store to store to follow local tastes and trends. An item may be selling slowly in one location and flying off the shelves in another. The retailers and distributor might find it more effective and efficient to move leftover goods from one location to another where there is high demand.

RFID and GPS are just the beginning. As more "things" gain connectivity, supply chains will gain more visibility and an increased ability to have the right inventory, in the right place, at the right time -- for better customer service at lower cost.

Follow SearchManufacturingERP on Twitter @ManufacturingTT.

This was first published in March 2014
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