The Supply Chain Unplugged

Your supply chain is mobile, so why shouldn't your management system be? In supply chain management, the seams between disparate processes are just as important as the processes themselves. Wireless technology offers companies a way to affix those...


[From iSource Business, May 2001] The Home Depot hates static inventory. The Atlanta-based mega-store, with $38.4 billion in 1999 revenues, likes inventory to fly into its store and off its shelves without ever lying around in a warehouse. The company calls the strategy mobile inventory, and the glue holding it all together is wireless technology.

Although seemingly invisible, wireless technology is palpably poised to be the next killer app in supply chain management. Many diverse companies are using wireless applications hand-held devices that stream information to and from remote corporate databases in their inventory management plans. Once serious stumbling blocks like limited bandwidth, different technology protocols and privacy issues are surmounted, much broader wireless supply chain solutions are expected to take hold.

Imagine trucks, staged around major cities, that are filled with company merchandise, waiting to be alerted about immediate deliveries. Or procurement specialists notified the minute no, the second commodity and component prices budge an inch. What about packaged products that automatically tell corporate databases they have left or entered the warehouse? Or retail stores that know when a top customer, who is a size seven and loves black Manolo Blahnik shoes, has just walked through the doors? Wireless takes such musings and makes them real.

How does it pull this off? Well, in supply chain management, the seams between disparate processes are just as important as the processes themselves. Affixing those seams, however, has been a problem. Wireless can be the connecting technology, dictating the movement of goods from the raw material stage through to the end user. Each process sourcing, procurement, order processing, inventory management, logistics, warehousing and customer service can be accomplished via wireless communications, offering real-time decision making and mobility where none presently exists. The supply chain is ripe for wireless because it is very disconnected and, yet, very mobile, says Scott Sbihli, senior manager at Dynamis Solutions Inc., a Farmington Hills, Mich.-based Internet professional services firm. It's just the kind of situations wireless applications excel in.

Why Wireless?

Current promise aside, the unplugged supply chain still resides largely in the future. Techno-research gurus at such companies as Gartner Group predict wireless will be an integral part of the so-called Supranet, an uber-network of all networks, in which mobile, wireless data communications are plugged into the Internet and other communications networks, such as voice and data, television and computer. These heretofore independent networks will interact to drive unparalleled efficiencies in the supply chain. Wireless is the missing link in the Supranet, says Mark Margevicius, a Gartner research analyst in Cleveland, because it creates a thread of continuity in all these interactions.

Wireless devices remove the constraint of a fixed location for a terminal, enabling services to be based on the user's current location wherever that may be, Margevicius explains. Companies and customers will get products faster and most certainly at a cheaper cost because of inventory systems that get updated in real-time.

The use of wireless technology to access the Internet (via the Wireless Web) and integrate with company extranets, Intranets and Enterprise Resource Planning (ERP) systems is just beginning. Impediments to growth are obvious, from the exasperatingly long time it often takes to connect to the Internet to the tiny screens on cell phones and PDAs (personal digital assistant devices), which limit messages to brief text. These shortcomings are bound to change, due to the immediacy, mobility and convenience of wireless devices literally forcing the technology to improve.

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