Integration as a prerequisite - opening the dark box of the supply chain

JasonYoo

Integration as a prerequisite - opening the dark box of the supply chain [Copy link]

[Abstract] Supply chain visualization can ensure the safety of goods and help companies save costs. Experts estimate that by enhancing logistics transparency through technologies such as RFID, an average of $2,000 in logistics costs can be saved for one container, and the labor costs of inspection and repackaging can be reduced.

A batch of important drugs is about to be sent to the west coast of the United States. How to ensure the safety of this batch of drugs? The supply chain director of a pharmaceutical company seems to be at a loss. Large logistics companies usually use real-time monitoring methods, which can only report to companies at any time which port the goods are staying and whether they have been declared for customs. Such routine information. The supply chain director wants to know more detailed information such as the humidity and temperature of the environment around the drugs during transportation, whether the goods will be swapped, etc. But to his disappointment, almost no logistics company can meet his wishes.

　　In fact, for many companies, the information of goods is opaque from the time the goods are packed and shipped off the factory line until they are unloaded to the warehouse. "Obviously, the biggest drawback of 'black box operations' is that the safety of goods cannot be guaranteed," said Tom Zielinski, Chief Partner of Supply Chain Management in Asia Pacific at Unisys (China) Co., Ltd. (hereinafter referred to as "Unisys China"). "Visual supply chain can help improve this phenomenon."

RFID helps visualization

　　The U.S. Department of Defense uses Radio Frequency Identification (RFID) technology to enhance supply chain visibility and ensure the safety of goods. According to reports, the U.S. military's In-Transit Visibility system is the world's largest RFID network, using nearly 1,500 nodes at airports, seaports and railway terminals in more than 30 countries to monitor thousands of containers and containers every day. The RFID network enables the U.S. military to track cargo transportation, including every step of the supply of food, water, ammunition, gasoline and uniforms, effectively ensuring the safety of goods. Because for the U.S. Department of Defense, "the impact of losing a weapon will be immeasurable."

　　Safety is only one of the benefits of supply chain visualization . It can also help companies save costs . Experts at Stanford University in the United States estimate that if new technologies such as RFID are used to enhance logistics transparency , an average of $2,000 in logistics costs can be saved for one container . More importantly, RFID can scan the entire container at the same time, reducing the labor costs of inspection and repackaging , greatly improving work efficiency.

　　In the fourth quarter of 2004, Royal Philips Electronics (hereinafter referred to as "Philips") began to deploy products using RFID technology to label cargo boxes between Philips Semiconductor's regional distribution centers in Kaohsiung, Taiwan Province, China and Hong Kong Special Administrative Region, in order to improve the efficiency of its intra-Asian supply chain. As the first major deployment of RFID in the semiconductor supply chain, Philips received strong support from partners during the project, such as French Tagsys and Smartag, which provided tags, the former also provided readers; Zebra Technologies provided printers, and IBM provided system integration.

　　Brian Neil Robertson, senior director of sales and marketing of intelligent identification products in Asia Pacific at Philips Semiconductors, said that RFID real-time tracking has shortened the cycle and increased the speed of confirming the contents of shipments. Currently, Philips has saved 50% of its warehouse time, and the resulting efficiency improvement is also significant. Externally, the delivery time from finished products to customers has been greatly shortened by one day; internally, due to the reduction in labor costs during material handling, Philips has saved more time to further improve customer service and enhance competitiveness.

　　The application of RFID can also help enterprises to manage inventory locations more effectively and in real time, make better delivery plans, and ultimately make better use of warehouse space. Relevant personnel from the purchasing department of Shanghai Siemens High Voltage Switch Co., Ltd. said that there are indeed examples of losses caused by poor delivery management due to opaque supply chains. In order to avoid similar losses, enterprises usually adopt the method of signing long-term purchase and sales contracts and letting suppliers equip corresponding inventory. However, inventory backlogs not only occupy a large amount of funds, but also increase inventory management costs, which brings great risks to supply chain management.

　　Multiple options

　　In addition to RFID, various tracking technologies such as barcodes, cellular and satellite technologies will increase the transparency of the supply chain. James G. Fry, vice president and partner of the global supply chain division of Unisys, pointed out that advanced sensors and scanning tools can even measure humidity, temperature, light, radiation, etc. For example, fruit growers using chemical sensors can measure the time when their agricultural products will rot. Using this real-time data, producers can adjust the supply chain to ensure that the fruit is ripe when it arrives at the supermarket.

　　Faced with so many technologies, how should enterprises choose? Fan Jiansi said that different industries, different problems, and different processes require different technologies. Generally speaking, when selecting technologies, enterprises should fully consider their own business characteristics, including location, product characteristics, product status, safety, compliance with different local regulations and other factors, and make comprehensive judgments. Ultimately, enterprises determine the most cost-effective and efficient mature technology based on the required tracking level.

　　A company that frequently purchases kitchenware in China and ships it to Germany explicitly stated that they do not need to track the status of every item or box of goods.

　　They just want to track a container with dozens or hundreds of boxes, or track the status of the transport vehicle that transports the goods. The global positioning system (GPS) can be used to dispatch trucks and track the goods. The logistics company only needs to install a communication box on the roof of the truck, so that the driver and the headquarters can communicate in real time. The headquarters knows the real-time location of the goods through satellites and updates this information to the database. The German company can then learn the current location of the goods through the Internet or telephone.

　　Integration as a prerequisite

　　Although the deployment of new technologies can bring huge business value, enterprises still have many concerns when selecting and deploying these new technologies. Yang Ping, Chief Information Officer (CIO) of Shanghai Waigaoqiao International Logistics Development Co., Ltd., said that new technologies also put forward higher requirements for enterprises. Only on the basis of standardization, transparency and standardization, and through the operation of a dedicated IT department, can the smooth implementation of visual supply chain be promoted. This also means that enterprises need to adjust and optimize existing work processes.

　　Considering the needs of users, Unisys has simplified its solutions as much as possible and claims that such solutions can not only support mixed environments, including RFID technology, smart barcodes, invisible ribbons and other methods. More importantly, it can be integrated with the company's existing systems, and in many cases it is possible to handle large amounts of data obtained through new tracking technologies without adding configuration. However, Linda Cohen, executive vice president of Gartner, pointed out that most types of solutions for global business applications are often very complex because they require reconfiguring the way technology is applied to the process. "The process must optimize technology through the three levels of platform, network and application to create a good solution." Cohen said.

　　In this regard, Philips' proposal is to first clarify which business can benefit from the deployment of new technologies. In the deployment of the semiconductor supply chain project, Philips prepared for nine months. After determining the processes that can be improved in the two locations and between the two locations, Philips drew up a blueprint for the processes that need to be deployed in the future; deployed a change process to manage these changes; and finally purchased the required equipment.

　　During the deployment process, Philips strives to minimize the impact of the system implementation on existing businesses. Deploying in stages is a relatively safe approach, which also lays the foundation for further business expansion.

　　After the process is integrated, the enterprise needs to take some measures to deal with emergencies. Many companies use mobile phones to communicate, but it takes a while to transmit this information to the network. A global top 100 clothing company uses a handheld computer to communicate with the headquarters, so that the headquarters can quickly judge the emergencies in the business and make accurate responses.

　　Many logistics service providers believe that although most customers have not actively proposed to use new technologies to achieve visualization in the supply chain system, the demand in this regard will definitely increase in the future. A reality that is difficult to avoid is that China's current logistics costs are 2 to 2.5 times that of the United States. Global companies can save 25% to 35% of costs by purchasing in China, but due to the long procurement cycle in China, the cost has been raised due to the delayed time.

　　Source: Zhidian.com