Geolocation_in_the_Supply_Chain

As the old saying goes, “change is a coming”. These winds of change are multi-variant and are carrying a wonderfully potent mixture of geolocation, analytics, and SaaS to today’s businesses. In fact, the supply chain stands to be one of the biggest benefactors of this sweeping change.

For many years, supply chain practitioners have discussed and envisioned a future whereby geolocation data could be seamlessly linked with order execution, warehouse management systems (WMS) and or transporation management systems (TMS).  The benefits of being able to assemble this location data in real-time for the supply chain and effectively disseminate out to enterprise decision support systems and business users includes:

1. Better Planning – understanding inventory flows at a pallet or case level and being able to understand the velocity of movement, in transit product and the position of inventory could have significant impact for corporate planners trying to appropriately allocate manufacturing capability, purchasing decisions and procurement of input materials.
2. Optimization of Network - today the supply chain network of companies large and small is constantly in flux.  Things such as seasonality, promotions, rain fall, weather, fuel costs and other variables can significantly alter product flows from traditional patterns.  This constant flux makes it difficult for supply chain tacticians to understand their operating environment in real time.  What typically happens in today’s world is that supply chain leadership is always looking at a dated snapshot of the network and resulting product flows.  If supply chain tacticians had the ability to visually understand their environment in real time then the possibilities become quite endless and very interesting.
3. Audit Precision & Compliance Initiatives – Another benefit of maintaining geolocation data that may not be so obvious is the financial benefit that could be realized.  In transportation, a common variable used in calculation of costs for over the road type movements is mileage.  With geolocation capability tied to various gates in a shipment’s lifecycle such as order confirmed, pick confirmed, in-transit, and POD, a procurement team could use time stamp data correlated with latitutde and longitude information to deduce actual mileage transited, cost estimates, route traveled, and velocity at various checkpoints.  With the same geolocation information described companies could reference rules and ensure compliance with either internal policies or insurance mandates.  An example of this could be the idea that a tractor-trailer cannot exceed some average speed.i>
4. Green Initiatives – As green initiatives continue to take over old-school industries geolocation data can help  supply chain departments to gather the critical intelligence they need to undertake carbon footprint measurements and other green related initiatives.  Other capabilities provided by having precise location information
5. Customer Service – An excellent use for geolocation data could include the ability to more accurately measure transit times from frequented origins to destinations.  For example, consider the case where a large distribution facility in a metro area restocks materials to numerous homes, stores or smaller warehouses in the state.  By maintaining geolocation data the distribution facility could more accurately assess transit times to each end destination, by time, by day, etc.
6. New Service Offerings & Market Differentiation – The market for transportation services and third party logistics services continues to grow and become more competitive each year.  With geolocation capabilities transportation entities can offer new services to their customers and help differentiate their offerings from a sea of competitors and look-alikes.
7. Safety – As the recent bomb incidents on board UPS planes indicated, we live in an increasingly dangerous world where cargo operations are being used as a mask for potentially nefarious activities by terrorists and wrong-doers.  Geolocation and its integration into asset management systems, inventory control and transport management could help provide corporations with clear visibility into key personnel, assets and product flows at all times.

So the question beyond what benefits will geolocation bring is one of how does it become a reality, what are the steps and what may be some of the most present obstacles today.

To usher in the type of benefits that can be realized from geolocation organizations need to have a few basic building blocks in place.

• Centralized Data w/ Well Defined Schemas
• Integration with Key Order Management, Inventory Management and Transportation Systems
• Modern Applications Frameworks  (SOAP, REST, etc.)
• Deployment of Applications to Diverse Devices (Web, SmartPhones, iPads)
• Capability to Assimilate and Make Sense of Data (i.e. Business Intelligence Platforms)

The last point may be one of the more important points to make.  The premise of geolocation by default also means a literal avalanche of data.  In the example that was given above imagine a distribution facility normally has 100 orders a day to local destination points. With geolocation enabled these 100 orders could potentially produce tens of thousands of records with juicy tidbits like latitude, longitude, time, vehicle ID, driver ID, temperature, etc.  Without proper business intelligence platforms this data is somewhat useless.

Geolocation has some awesome capabilities for the supply chain and I am hopeful that with recent announcements and initiatives from government entities and startups alike that the promise of geolocation will soon be supplanted by a more widespread reality and many real-life implementations.