Supply Chain Network Top Ten Search Terms – Q4 2008

edi software

spend management

distribution software

supply chain software

security network

manufacturing software

software management

corporate performance management

inventory management

vendor managed inventory

Interesting to note that half of these terms include software which even further highlights the importance of systems and software in the building of today’s supply chain networks!

Jeff Ashcroft

In the meantime, companies that ship food products say the pallets’ primary attraction is their plastic composition, which they claim is lighter, more hygienic and sturdier than wood. Martori Farms, a produce grower in Scottsdale Ariz., and HEB Grocery Co., based in San Antonio, Texas, are among the iGPS converts.

Martori Farms ships the broccoli and melons it grows to distribution centers nationwide, which then transfer the produce to local retailers. “We have been urging our pallet suppliers to develop a plastic product for many years,” says Paul Fleming, VP of marketing and business development for Martori Farms. “IGPS presented an option that included the benefits we desired in a pallet.” Such advantages included the elimination of broken boards, wood pieces and nails from wooden pallets, which he says “were littering our warehouse floors.”
Growers and Grocers Get Into Plastic Pallet Pool

In order to justify and best leverage the investment in RFID technology, retail and consumer products organizations need to look at all four of these aspects in unison, involving all stakeholders in the process, from manufacturer through to the sales floor. Each of these will be touched on briefly with reference to related articles to provide an initial understanding of how they fit into the holistic RFID vision which is now emerging and will soon revolutionize the retail business model leaving laggards behind heading into a fatal tailspin.

Security:

RFID has much to bring to retail security from a number of perspectives beginning with its’ ability to serialize all products within the retail system. Today all barcodes and therefore all inventory of like products is the same. In an RFID world, every product will be unique and can be monitored enroute and within stores to protect each specific inventory asset until it is processed and paid for through POS.

Traditional EAS and even some of the hybrid systems rely on the scanning of products for a magnetic strip or other EAS material, and if these are somehow blocked or shielded or perhaps leave the store through unmonitored exits such systems fail to provide the means to tighten up and perhaps one day eliminate both internal and external shrinkage. By monitoring on a serialized basis all units tied to the reader system within a store, security personnel can take action based on specific events in relation to specific products utilizing both on-site as well as remote monitoring/recording, in concert with ongoing analysis of this information for immediate or later intervention as appropriate.

A simple example of this is if an unusually high number of a specific product are removed from the shelf instantaneously, cameras can be automatically triggered to the area, onsite security staff alerted and a videofeed directed to their PDA to assist in determining the nature of the event and what responsive action needs to be taken. Such an approach has benefits over typical EAS systems which work on the perimeter only with this proactive approach giving loss prevention persons a head start versus past methods.

As well, use of a serialized monitoring approach eliminates the effectiveness of blocking or shielding techniques as immediately upon disconnect from the system, an event can be generated if a related POS transaction is not recorded. Such a methodology lays a foundation upon which full store inventory reconciliation could be completed identifying reasons for all products leaving the store without being purchased classified under external theft, internal theft, damage, transfer, return to vendor etc. providing needed information on which management can take action and develop deliberate countermeasures to address these issues from a position of information and evidential strength.

Supply Chain:

Effective implementation of RFID in association with a number of other key supply chain technologies has now been proven to deliver significant benefits across the supply chain. Two pilots conducted by Supply Chain Network resulted in 50% and 85% productivity improvements in specific retail receiving applications working with multiple retail companies and verticals at both store and distribution centre levels.

Specifically, RFID has the ability to automate certain checking functions, monitor the movement of inventory within the supply chain and verify service levels and product delivery on time and complete. See Staples and its partners get full visibility with RFID for additional details.

Marketing:

RFID has many potential uses for the improved marketing of products extending from the tracking and verification of promotional products to ensure their delivery and deployment, to the triggering of digital signage media in-store to generate additional/go-with sales activity. Additionally, RFID can be utilized in conjunction with in-store marketing and Point of Purchase displays to measure their use and effectiveness based on store location, floor graphics, related signage both digital and traditional and more. Details on some of these opportunities are included in RFID: Sales + Marketing @ the Edge.

The Environment:

It’s not until after a company has calculated it’s carbon footprint that it’s realized by management that 75% of most companies carbon emissions come from their supply chain. RFID as described in the supply chain section above is a real means of directly measuring and improving the function of the entire supply chain both internal as well as external allowing for many synergistic opportunities between the supply chains of buyers and sellers to be recognized, measured and then jointly improved to deliver real and measurable environmental improvements.

The big mistake many companies make is building a static spreadsheet to calculate the carbon footprint as they end up with a numerical result, but unfortunately spreadsheets need to be painfully modified to change for consideration of multiple options and don’t have the optimization capability available in more advanced tools. Additionally, with growing consumer awareness and action on this issue, the ability for retailers and consumer products manufacturers to identify the carbon input to their products and post at the store shelf is already happening in some parts of the world. See Create a Carbon Neutral Supply Chain to learn more.

Concluding, if to date RFID is only firing on one of the above described cylinders in your organization, then it’s understandable why this project and related ROI calculations are failing to help you take this technology to the level of wider implementation. Based on the above, it’s clear that RFID within retail organizations needs a senior cross-functional leadership role and champion to drive and succeed.

In addition, there are a number of pre-requisites which must be in place for RFID to succeed with the first being an electronic catalogue and product data synchronization. SCN is available to assist firms in any of the above areas from basic mobilization presentations to management and extending into full facilitation of companies and their supply chain partners in designing and implementing programs which integrate all of these components to drive maximum benefit from RFID just ASK and we’ll be happy to help you start to build the foundation needed to succeed with RFID.

Jeff Ashcroft

My belief is that this is the wrong attitude and no matter how backward and tightfisted your senior management and finance group are, if you can identify for them in straight forward terms a specific and achievable logistics & supply chain project with real benefits there may be light at the end of the tunnel.

The question then becomes which project should I examine and propose? This week, we’ve identified our Top Ten Projects with supply chain impact that you may want to review and consider in relation to your own specific supply chain network.

So here we go, the Top Ten Projects with Supply Chain Impact we’re highlighting are:

1. Strategic Network Modeling

2. Operational Benchmarking

3. Inventory Optimization

4. Spend Analysis

5. Supply Chain Visibility

6. Scorecarding

7. Global Data Synchronization

8. Supply Chain Network Collaboration

9. RFID Technology Process Improvement

10. Carbon Footprint Modeling & Reduction

If you feel there is more you can get out of your supply chain to improve the situation and reduce some of those customer service and other issues you face day to day, review each of these opportunities to see which might be the best fit. Once you’ve determined this, build a business case around it, ask for help if you need it, and then present to the powers that be and pray they also see the light.

Cheers

Jeff Ashcroft

The proof of concept project must be very carefully selected as it will be the key to ongoing success within the industry and it must show significant promise relative to the potential for rolling out an ongoing ROI implementation of the methods demonstrated by the proof of concept.

Selection of the proof of concept to be completed must be made and supported by the industry group established in part one and this group will also share the cost of the proof of concept through a jointly established funding formula.

Once this proof of concept project has been successfully completed, a detailed roadmap and business plan for the roll out of the industry supply chain network can then be safely and quite accurately defined.

Availability of this roadmap and business plan will greatly facilitate companies in making the decision to support and implement the industrywide supply chain network as proven out during the proof of concept stage.

In order to maintain focus and deliver an initial success the first model of the industrywide SCN will not likely incorporate all functions and methods, but focus on those most critical and ROI drivers, with additional functionality to be added later once the SCN is up and running.

Please note that each of these steps will take at a minimum six months and likely longer given the cultural issuues in many industries as well as the amount of time industry professionals can dedicate to the supply chain network process.

If you or your group would like assistance in mobilizing your industry’s supply chain network just ASK and we’d be happy to assist further based on past success in projects of this nature.

Jeff Ashcroft

Without such standards and a community of interest supporting them, no comfort levels on which technologies to buy and how to implement them can be safely established. This indeed is a long process and significant work has already been undertaken by groups such as the Supply Chain Network Project.

RFID (Radio Frequenct IDentification) is one of the key technologies required for this purpose and to understand more about RFID applications for SCM, see Are You Ready for RFID? as this technology has suffered through a long evolution which is rapidly becoming a revolution. Perhaps even catching some of the major software providers offguard who are now rapidly playing catch up to ensure their applications are compatible with and support the use of RFID and other new methods.

So what is meant when we say that SCM Standards are needed? Well at the basic level, there needs to be a standard developed for the physical processes required for efficient functioning of supply chains in conjunction with the technologies such as RFID and others. These others include electronic catalogues, vehicle location devices, security technologies, smart returnables and wireless devices to name some of the most important. But beyond this, also required is a definition of the required systems applications and how they may be developed and used in a “standard” methodology to support interoperability between trading partners in diverse supply chains.

To give you an idea of these application requirements, what we’re looking at are Activity Hubs, Dashboards and Standardized Database Structures. Such SCM standards will most likely roll out on an industry by industry basis, with some items slightly tailored or customized to support each industry, but there’s no doubt in this author’s mind that without the development of strong SCM Standards, the forward movement required to achieve the heady goals set for SCM applications will not be made. So when you’re looking at future investments in SCM technology and infrastructure, you may first want to look at what standards are being developed and where they’re headed to avoid bad investments or the need to replace current technologies sooner.

Take some time to look at what is happening in the area of Supply Chain Management standards development, get involved, contribute and participate in one of the most exciting periods of development in the history of Logistics and Supply Chain Management.

Cheers

Jeff Ashcroft

Staples Business Depot, the Canadian subsidiary of the international office-products retailer, completed an end-to-end supply-chain pilot in 2006 with a group of its vendors to their delivery center, as well as on a direct-to-store basis to successfully demonstrate the process benefits of utilizing EPC-ready Gen 2 technology in real world operations. Presentation includes specific component descriptions of an end-to-end RFID pilot project, definitive technology and productivity metric results and methods utilized to create a collaborative RFID pilot among supply chain partners.

Speaker: Jeff Ashcroft

Jeff Ashcroft started his career at The Hudson’s Bay Company in a part time role on the warehouse floor, rapidly rising to the most senior Logistics position. In the 1990s, he joined the Tibbett & Britten Group where he developed Wal-Mart Canada’s 3PL national distribution and transportation network. In 1997, Strategic Logistics Partners was formed and Jeff continues to lead the Supply Chain Network Project an RFID and SCM industry initiative. Jeff’s most recent role was Vice President, Logistics/Supply Chain at PricewaterhouseCoopers LLP (Canada), where he was also the PwC Canadian Retail Advisory Leader.

NACDS 2007 Supply Chain & Logistics Conference

To learn more about the Supply Chain Network Project collaboration initiatives or how you can work with your trading partners on an SCN faciliated basis, just ASK and we’ll work with you to develop and implement an effective project.

Jeff Ashcroft

Staples Business Depot is already in the air. Together with its supply chain partners, this retailer of office equipment and supplies has embarked on a unique RFID pilot project.
Expected to go live by the first quarter of next year, the pilot will see Staples suppliers apply RFID labels to pallets, cases, even individual items.

“Staples wants to learn how RFID will impact our business,” says Joe Soares, director of retail process for Staples. “RFID has the potential to make many of our common practices easier and quicker, by reducing the amount of times we handle product before putting it on our shelves.”

The team will use the Electronic Product Code (EPC) Gen2 standard, which is the globally-approved standard for RFID. Right now, the standard is being reviewed by the International Organization for Standardization (ISO), but it’s expected to receive the stamp of approval soon.

PricewaterhouseCoopers is coordinating the project, while Bell Canada is providing the wireless network. Falling in are other members of the SCN, including Unisource, UPS Supply Chain Solutions, ACCO Canada Inc., Fellowes Canada and Western Inventory Service.
These members and industry at large are hoping the pilot will demonstrate RFID’s promised results—better inventory visibility, and happier customers.

“We see this initiative as having a benefit to our vendors,” Soares said. “With improved accuracy in receiving product, we’ll have less issues with receiving errors, payments and claims to our vendors. We’ll have more timely deliveries, and ultimately faster turnaround for product from vendor to shelf.”