Asset Tracking Comes up Lacking

Survey: Manual tracking of inventory, assets stalling lean manufacturing

Santa Clara, CA  August 28, 2001  It's 10:00. Do you know where all your assets are?

If you answered "no," you're not alone. In fact, in a recent survey of operations managers, engineers and IT executives from some of the world's largest corporations, 10 percent of respondents indicated that their companies write off a half-million dollars or more in annual losses as a result of lost assets or inventory.

Despite these losses, 84 percent of the 143 respondents said their companies still rely on manual techniques to locate and track physical assets. Not surprisingly, 100 percent indicated that their asset management data is inaccurate due to this manual process.

Three-quarters (78 percent) of the respondents reported that operations personnel perform at least one search per day for inventory or assets, with 25 percent reporting more than 10 searches per day. At the same time, 64 percent of respondents indicated that search times to locate each item take 30 minutes or longer.

"The results of this survey clearly substantiate the need for real-time visibility of supply chain assets to support lean manufacturing, synchronous material flow, enhanced operational efficiencies, and bottom line cost savings," said Tom Turner, senior vice president for solution provider WhereNet, which conducted the survey.

(Not coincidentally, WhereNet, whose customers include Ford Motor Co. and Coca-Cola, offers wireless supply chain visibility solutions for locating, tracking and managing supply chain resources.)

In the survey, the respondents were unanimous in reporting that the latency associated with current inventory systems results in the incorrect location of inventory, often because by the time the asset or inventory is located, scanned and downloaded into an inventory management or enterprise system, its "original" status has changed.

These manual data collection processes and systems could be bottlenecks for enterprises trying to implement lean manufacturing campaigns and to optimize their supply chains. With decreasing cycle times and reduced inventories at manufacturers, Turner said, the need to know where assets and inventory really are in the supply chain or in a facility becomes critical.

"This survey highlights the need and desire for companies, large and small, to use technology and implement solutions that can make their supply chains operate more efficiently," said Turner.

He added that he was not surprised by the survey's results. "Most people are still using what we would categorize as manual labor," he said, "either doing physical searches or deploying people to go out and use barcode scanning and scan entire inventories."

Respondents to this Web-based survey came from more than a dozen industries, with 56 percent of the responses coming from the automotive, aerospace and manufacturing industries. More than 25 percent of the respondents represented companies with average annual revenues greater than $1 billion.