Link issue#7 may -june2005 - SCLG

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Information Technology 43 2005. In March, Wal-Mart relented a little because its suppliers would find the deadline near-impossible to meet and so would Wal-Mart itself. The deadline <strong>may</strong> have changed, but the intent is crystal clear: RFID is very close to being The Next Big Thing. IDC predicts spending on RFID software, hardware and services for the US retail supply chain will increase from $8.5 million in 2002 to nearly $1.3 billion in 2008. The Wireless Data Research Group forecasts that the global RFID market will grow to $3 billion by 2007. The significant investment this represents for business makes it critical that companies consider how they can reap longterm rewards beyond simply ensuring compliance with customer mandates. Interest in RFID is also peaking at a time when Middle East-based organizations are increasingly looking for ways to streamline their supply chains, and increase both the efficiency and transparency around that aspect of their businesses. What RFID generates is data- mountains of it, encompassing all aspects of the business value chain. This will push the boundaries of information management in terms of scalability, reliability and security and will create information silos to handle each specific application. To protect the initial investment and realise maximum long term returns, businesses need to ensure that they base their RFID strategy on sound information architecture - an architecture that adapts to changes in technology, standards and business dynamics, providing an integrated 'single source of truth' that ensures all parts of the business benefit from what RFID has to offer. A key value proposition of RFID technology is the ability to provide near real-time tracking of any RFID tagged item without human interaction. Turning this capability into a sustainable competitive advantage depends on how effectively all this RFID data can be translated into valuable operational intelligence, such as forecasting and inventory management, and made available to all enterprise systems, applications and users. This capability can provide businesses with visibility into their whole supply chain and corporate assets with little or no human labour cost. If widely adopted, RFID has the potential to eliminate human induced data collection errors, reduce inventories on-hand, minimize wasted resources and improve safety and security, ultimately providing companies with the insight to make better business decisions at a low cost. Jeff Woods, principal analyst at Gartner, says: 'Enterprises that can leverage RFID to create RFID-centric processes in order fulfillment manufacturing and warehousing will achieve strategic differentiation from their competitors.' Author: Ayman Abou Seif, Managing Director for Gulf States, Oracle Corp. Supply Chain & Logistics Group | www.sclgme.org
44 Academia Logisitics Whats in for you? By Stephen Errey, MD of Lucidea Consulting Ltd It is a common perception that logistics is simply a cost to be controlled, or a process to be improved. While these are important considerations, the experience of really successful companies has shown the value of looking at logistics in a radically different way. Companies that grow quickly – and sustain that growth – use logistics as a competitive tool. But, how can you do this yourself? You might imagine that the first time a company meets with a logistics consultant the discussion would revolve around a logistics problem. In fact, most of the questions wouldn’t be about your logistics at all, but about your business, customers, competition and your goals for the future. There’s a good reason for this; successful businesses don’t treat their logistics departments as just an add-on, they look at the needs of their customers and then design a system to meet those needs. Here’s an example that you should be familiar with – office stationery. For a stationery supplier, it would be normal for one office to be treated as one customer. That means it’s one picking note and one drop. But, when looked at from the customer’s point of view, what they want is the stationery where it’s going to be used, in the amounts in which it’s going to be used. A neatly shrink-wrapped pallet on their loading dock means considerable work for their staff, and delay while everything is processed and delivered across the building. What has happened is that customer-oriented suppliers have set their logistics up to pick, pack and deliver to their customers’ desks – and by thinking outside the warehouse, they’ve been able to enlarge their businesses. If you’re focused on growth, make sure you’re also focused on what’s outside your warehouse. And that’s not just your customer – remember to get your suppliers to think the same way as well. Successful businesses have, nowadays, found a way to give great service at low cost with logistics playing its part. The traditional way to cut cost is to shave the pennies off here and there – from suppliers perhaps, or with a lower specification for particular materials, or by putting off maintenance and replacement for a while. Of course this helps – no one can afford to let up on cost control. But in the end the way to really make a difference, cutting out whole swathes of cost and moving up a step in levels of service, is to completely revamp the way your business is run and, in particular, cut out whole activities. Once you start looking, you’ll be surprised how much surplus work you can find. Here are three examples to give you a flavour of the issues at hand. How many links are there in your supply chain? Do your products have to pass through intermediate warehouses or distributors before they reach your customer? And if so, what about changing the way you work so that you can dispatch straight to your real customer? It’s this insight that’s made the best internet companies like Amazon and easyJet successful. Supply Chain & Logistics Group | www.sclgme.org
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