Simply Supply Chain

Information & Analysis on Supply Chain Technologies & Strategies

Posts Tagged ‘inventory management’

In the Cloud We Trust…Supply Chain Moves to SaaS

April 5th, 2010

Supply Chain SaaS

Anyone who has been involved in business for any length of time knows that today’s winning formula can quickly turn sour. Certainly, the job of a leader of any organization is to closely monitor the environment in which they compete to “read the tea leaves”. Reading the tea leaves involves picking up on nearly imperceptible movements in the market, monitoring casual organizational chatter, watching competitors activities, and in general staying plugged in. Part art and part science, these combined activities require “Sherlock-Holmes-esque” investigative abilities combined with a knack for piecing it all together.

I’ve been pulling the pieces together for a bit in the broader supply chain industry and have been observing some very interesting trends that appear to be converging in a more rapid fashion that most in our industry are accustomed to. This convergence centers on the adoption of cloud-based solutions (aka Software as a Service (SaaS)) within the supply chain industry to facilitate challenges to common problems. The reasons for SaaS adoption are numerous and I will spell them out further in the post. However, let me first point to some of the anecdotal data which starts to draw the first brush strokes of this very interesting picture:

NOTE: In case you have been living under a rock for a few years follow this link to get a better understanding of SaaS.

Anecdotal Data Relating to SaaS & Supply Chain Adoption

Trade publications & industry followers, leaders and authors are commenting and talking more frequently about impact of SaaS specifically in the supply chain
Major consulting shops are augmenting and setting up departments devoted to advising & helping to roll-out SaaS solutions
Major supply chain oriented publications begin displaying larger & more frequent advertisements for SaaS solutions in WMS (Warehouse Management Systems) and TMS (Transportation Management Systems) areas.
Traditional software vendors are beginning to release “cloud-based” versions of their standard offerings
Emergence of more case studies focused on SaaS type deployments and the resulting efficiencies gained by coalescing processes, data, and analytics

Technologists would look at the above points and most likely reply with a giant…”Duh”…or, “Your point is what exactly?”. To them I would say this. For supply chain operators and hard-core logistics guys the migration to the cloud and impact of SaaS is just now starting to be more broadly discussed. These discussions are being driven because of the economics associated with Saas, economics that I have seen first hard in my business dealings. Ultimately, some of the big advantages of SaaS for the supply chain industry are:

Ease of Roll Out: Instead of getting bogged down with install disks, scripts, instructions for loading, etc. – many of the SaaS tools are as easy as a web link, a user name & password and you’re up and running. For highly diverse environments like the supply chain this is a definite advantage.
Immediate Upgrades: Worried about the latest patches and the most recent version? With SaaS solutions the versioning, patches, etc. becomes transparent to the user.
Right-Sized Infrastructure: Another benefit of the SaaS model is that companies can start enjoying the benefits of a system that might otherwise require too much up front capital to deploy. For example, if the fixed cost of deploying a traditional software package is $100,000, a company might choose to not deploy because the fixed cost hurdle is too extreme to warrant a payback in a reasonable period of time. However, in the SaaS environment, a company is generally able to get started for a considerably lower fixed fee and then pay a more manageable subscription or transaction fees.
Centralization of Data: In today’s environment, data and the resulting insights for an enterprise are critical. Through SaaS related deployments enterprises are able to start moving their organizations towards a common environment. In the supply chain world that is full of sub-contractors and third-parties that are located in different geographies with different technical backgrounds the SaaS model becomes a unique tool to help enterprises coalesce operations, processes and data.
Process Compliance: In the supply chain adherence to process is critical. This process adherence becomes very difficult as product moves across the globe and is shuttled from warehouse to carrier to customs entities and back again. With SaaS oriented modalities, large 3PLs and others can start to orchestrate systems and applications that facilitate compliance to standardized organizational processes.

In the complex business environment that is supply chain, the benefits of SaaS are very compelling. A few of the areas / functions where I believe we will start to see increased adoption in the supply chain around SaaS include:

Analytics
Warehouse Management
Rate Audit / Spend Management
Transportation Management
Order Management
Inventory Control

The next 12 months promises to be a wonderful and exciting time as more and more companies migrate key functions to the cloud. For supply chain entities looking to stay competitive this is one emerging trend that cannot be discounted.

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Posted in Cost Efficiencies, Event Management, Process Improvement, Reporting & Analytics, Software as a Service (SaaS), Supply Chain Thoughts, Supply Chain Visibility

Tags: 3PL analytics cloud comprehensive visibility cost reduction enterprise systems innovation inventory management legacy systems master data management SaaS software as a service supply chain transportation warehousing

RFID Helping Companies at the Item Level

September 6th, 2009

by: Douglas Ingram

A recent case study was published by Bloomingdale’s and the University of Arkansas RFID Research Center. The case study

RFID-on-package-in-supply-chain

detailed the use of RFID in one Bloomingdale’s store where it was used to help monitor inventory levels of approximately 10,000 jeans.

The case study found that the system helped to improve inventory accuracy 29% percent while decreasing the labor requirements for inventory significantly. In fact, the research center has found that with traditional bar code approaches to inventory, approximately 209 items per hour can be counted, whereas with RFID techniques applied, more than 4700 items can be counted per hour. This creates an effective 97% increases in productivity around the inventory process.

The applications for RFID in today’s modern global supply chain are exciting and could spell great efficiencies, visibility and competitive edge for those companies deploying RFID in their environments. Today, the promise and vision of RFID is greater than the actual real-world case studies of deployment. The broader RFID challenges to adoption in a global recessionary environment include:

Education for decision makers in the supply chain
Vendors and integrators demonstrating hard-dollar savings or heightened revenue through RFID adoption (i.e. more case-studies like the Bloomingdale’s one cited above)
More pressure from end-consumers for features realized through RFID implementation (i.e. Wal-Mart’s challenge to its providers)
Affordability of RFID components such as labels, readers, hand-held devices, and integration software for already existing enterprise systems.

As these items are addressed and RFID reaches critical mass across the global supply chain the impact on all stakeholders will

Employee Using RFID in Supply Chain (Retail)

be game-changing. More importantly, the Bloomingdale’s example shows a case study of RFID at the Item Level versus other case studies that have been focused at the case or container level. Benefactors of item level tracking are numerous but include any enterprise that has high-value inventory tied up in small components or parts. For example, the service parts industry for technology manufacturers could realize much value through the deployment of RFID including better part visibility and increased service levels.

I look forward to the next 24 months because I believe the global supply chain is set for a broadened adoption of RFID that will deliver value to all supply chain stakeholders.

LINKS:

University of Arkansas – RFID Research *(has page dedicated to the Bloomingdale’s RFID case-study)