Why supply chains need technology
Published: May 09, 2012
It's undeniable that supply chains are changing around the world, all of which is having significant implications on the regional procurement and logistics sectors. Fleet sizes across Asia are expanding and there are significant changes being made in how items are delivered.
But what is interesting about the resultant changes to the supply chain is how many of the innovations or major trends have emerged, not solely through enterprise requirement, but consumer demands.
With the rise in usage of mobile technology by consumers and the rapid growth in online retailing (and the need to deliver direct to residential addresses as opposed to warehouses or storefronts), there are significant challenges ahead for supply chain and procurement mangers alike.
The trend towards online retailing no longer means trucks are moving a pallet of goods, but 900 individual packages are going to the 900 different addresses. This has significant supply chain implications. When goods are placed on a huge pallet together, it is easy to protect them, ensuring the goods reach their destination untampered and undamaged. This does not translate across to the new paradigm of the modern Asian supply chain.
There is a requirement for supply chain managers to implement new processes and technologies to ensure these items reach their destination in the same quality consumers would get in a brick and mortar store, without the "safety in numbers" approach of the shrink wrapping pallet system.
There is obviously another side of the coin that needs to be looked at, as a result of the e-tailing trend: the addressing and packaging of the items is increasingly important.
While drivers (more often than not) may know from memory where the businesses are located that they are dropping goods off to, like the local electronics store, they don't know where a particular individual lives in an apartment in suburban Singapore. This area in particular is fraught with inefficiency - transport and logistics companies spend millions of dollars on incorrectly addressed packages every year. As the number of addresses being entered into the system increases, it's only going to get harder for the sector to keep these costs down.
One new area of aiding business intelligence lies in correcting problems before they even occur. It is the role of technology suppliers to equip organisations with solutions for the changing nature of the supply chain and help combat these rising issues around addresses. As a result, new package reading technologies can capture information from labels, and using imaging technology, validate the information against a database and make a decision whether to print a new label with a corrected address.
These technology advances will have only positive implications for Asian supply chains, as they struggle to keep down redelivery costs, gain better network planning and increase business intelligence.
To give an idea of how rampant the problem of incorrect address labelling is, 60% of the packages that went through a major delivery company were recently found to have missing or incorrect information on the address. When the problem is only being dealt with after a package has reached the wrong destination and come back to base, it becomes a significant detractor from the bottom line.
As the supply chain industry undergoes a period of evolution, it is now more important than ever that logistics managers leverage technology to ensure expensive assets do not go missing or disappear into the fray. Given the growing pattern towards outsourcing, particularly in larger multinational supply chains where there are large numbers of contractors and subcontractors to keep an eye on - it is all too easy for assets to go missing.
While supply chain managers know utilising a bar code asset tracking solution provides a record of goods to be delivered and their business' tools and assets, ensuring greater inventory control and stock management - advances in these technologies are creating new efficiencies.
Two-dimensional bar codes on shipping labels are highly effective for preventing errors and eliminating confusion in cross docking, truck loading, delivery and receiving operations. While 2D bar codes have enough data capacity to serve as portable databases, they are also used to add intelligence to shipping labels and break the dependence on networks and database access. 2D labels can include descriptions of the shipment contents, handling instructions, PO numbers and other information that delivery drivers and receiving personnel need to process shipments without having to access a computer or call for instructions. When coupled with advanced scanning technology, like Intermec's SG20 family of handheld scanners, 2D barcodes make it easy to give drivers a convenient reference for delivery instructions, such as "Only deliver to dock door 1," or "Customer must sign for delivery." Drivers unsure of delivery requirements can read a bar code in the field, rather than having to call the office for help and slowing down supply chain processes.
Asian supply chain, transportation and distribution companies provide their business and customers with needed goods and equipment with convenience and speed. Yet in a changing business environment many supply chain professionals are facing challenges and are struggling to adapt. By arming themselves with the right knowledge and using advanced tracking technologies, supply chain managers are helping ensure their business is operating efficiently, delivering goods accurately and meeting customer demands.
Contributed by Allan Neo, director of Systems Engineering at Intermec APAC
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