Track and trace has been around for a long time – what is different today is the fact that it is on the verge of becoming an essential bit of kit. Price is always a critical issue – and costs have come down dramatically over the past few years – but the usability and utility of systems has improved substantially as well.
The result is that for many services, track and trace is increasingly part of the offer – not a luxury add-on. In fact, in some instances, operators are reporting RoI periods of a mere six months.
“We see it as a core part of our offer to customers,” says Jonathan Chadburn, divisional managing director for DHL’s two-man home delivery business in the UK. There are still operators that do not offer real-time tracking. However, says Chadburn, the cost of providing the service has been falling rapidly – in particular the cost of transmitting data is now much lower than only a couple of years ago.
In terms of return on investment, the case is now much easier to make, he says. In particular he points to reducing paper trails, increasing speed of response and the ability to respond proactively to a problem. It is now possible to identify a problem and deal with it before the customer becomes aware of it.
There is a real benefit in customer perception – the carrier is now seen as much more responsive. “That in turn is a benefit to our retail customer. We see it as part of our value package – another reason to choose DHL,” says Chadburn. DHL home delivery clients include: Argos, Homebase, M&S (home shopping), IKEA, and Fortnum & Mason.
Chadburn is now looking at ways of bringing the cost down further through innovative uses of technology. We want to reduce the number of gadgets we give to the driver but we need to make it simple enough to get maximum usage by drivers.”
James Reading, business director, department stores and fashion at DHL, says: “The DHL SmartTrack system provides real time information on a driver’s progress through his route. This on-line track and trace capability also aids the transport management in their control of drivers and operations. Dedicated operations that have multi drops are also making use of track and trace to control merchandise into the store on time.
Craig Sears-Black of Isotrak says: “While fleet visibility is immensely valuable, its real benefit lies in helping to identify where global changes in logistics management, culture and execution can make a real, lasting impact on transport efficiency.
He points to Tesco which has used Isotrak for vehicle tracking since 1999. In 2007, Tesco upgraded to Isotrak’s Active Transport Management System, thereby achieving the whole-fleet visibility it required, to see as a single entity its fleet of 1,900 tractor units and 3,500 trailers, plying between 26 distribution centres and 2,000+ stores.
“Only by achieving this bird’s eye view of the whole fleet has Tesco been able to dramatically increase its vehicle utilisation, for example by using tractor units that have dropped off an inbound supplier delivery at a distribution centre, to haul a trailer to a store. Through this type of approach in 2005/06 Tesco Distribution Network increased the number of products delivered per litre of fuel used by eight per cent, beating its own target of a 2.5 per cent increase.
“All of Britain’s big retailers are continually forced, by market forces and regulatory pressures, to tackle and overcome the challenges of DC-to-store deliveries. To meet this challenge, supermarkets are using technology not as an end in itself, but as a tool to inform a clear management vision of how transport operations must change, improve, even transform.”
Paul Corbin, technical manager, systems engineering laboratory, 3M UK, says: “Track and Trace is having a direct impact on the customer experience in-store. Using RFID tagging on selected items is allowing major retailers to make sure that they have the full advertised range in each outlet: in every colour and size, for example. They know exactly what is where and when it needs to be replenished. This can bring about a direct improvement in sales volume. An often unrecognised further benefit is staff utilisation – by reducing the need to chase after out-of-stock lines to meet specific customer requests.”
Dominikus Hierl, president of Telit Wireless Solutions, focuses on the cost aspect: “Tracking and Tracing is able to realise cost reductions in several ways. It promotes reduction of safety stock by enabling companies to locate their entire inventory at all times throughout the supply chain. Furthermore, it allows problem identification along the supply chain.”
And, according to Philip O’Rourke, chief executive of Icthings.com: “From a security perspective, vehicle tracking can provide added protection to drivers, vehicles, trailers and cargo. Last year, TruckPol received more than 3,400 reports of road freight crime with a combined vehicle and load value of more than £105 million, resulting in an average loss per incident of £30,735.
Tony Neill, vice president EMEA at Navman Wireless, says: “The elimination of private or unauthorised mileage through enhanced routeing, facilitated by vehicle tracking, has a proven success rate of reducing business mileage. When this is combined with the additional capability to better allocate vehicles to jobs, progressive companies are able to save thousands of pounds a year. Neales Waste Management, for example, which operates a fleet of 25 vehicles and employed the use of a Navman telematics system in 2003, is now making annual savings of £60,000 on fuel costs.
Return on investment is a critical issue in deploying technology. Dominikus Hierl of Telit says: “The reductions in cost, increases in revenues and operational efficiency as well as improved customer service, justify the use of the technology.”
Isotrak’s Craig Sears-Black says: “The fatal mistake is to assume that vehicle tracking is a bolt-on solution that will, per se, deliver results automatically. It won’t, and there will be no RoI. An investment in technology remains expenditure not return unless the technology is deployed to suitably improve the efficiency of a business process.”
Tom O’Connor, managing director of DigiCore, says: “Vehicle tracking should form part of a wider fleet efficiency or asset management programme. For example, vehicle tracking can reduce fuel bills by more than 10 per cent, but for best results operators should consider taking an integrated approach that incorporates fuel management, routeing and scheduling, driver training and environmental policy.
Clive Fearn of Zebra Technologies points out that the technology now exists to track a product from the point of manufacture through to delivery to the customer.
One of the areas of fastest return on investment is mobile printing, he says, pointing to work Zebra has done with Coca Cola in Italy. The company has deployed 400 printers in vehicles there which have knocked days off the cash flow cycle, reduced errors and given an RoI of less than a year. And he expects to be able to save about 3,000 euros a day in postage when a new system is introduced to print invoices on site rather than having to post them out.
Philip O’Rourke, chief executive of Icthings.com says: “The tracking of unpowered assets such as trailers and cargo offers added protection to freight operators who may already track their vehicles. Thieves will often evolve to overcome new security methods, so it’s essential to continually review existing security measures. For example, as a growing number of commercial vehicles adopt tracking devices, criminals will increasingly avoid stealing the tractor unit, preferring to concentrate on the trailer and its contents. Therefore, possessing the ability to trace stolen cargo offers an innovative way to combat the threat of crime.
Paul Corbin, technical manager, systems engineering laboratory, 3M UK, says: “There is no doubt that it can – increasingly so, as infrastructure becomes more advanced and more and more organisations take up the technology -bringing costs down. The critical factor in achieving RoI goals is to set clear objectives beforehand for improving the process and the ROI expectations. Clearly, they will vary between industries as different companies have different expectations.”
Transics says its customers report, on average, a pay back period between 10 and 18 months.
One of the innovations driving the technology forward is the availability of complimentary local and wide-area wireless radio devices, says Dominikus Hierl of Telit. “Due to the versatile cargo shipment by land, sea, and air movement and the increased need to track inventory, it is critical to have cost effective, reliable, global coverage. No single technology can meet these cost and coverage requirements. Therefore the availability of complimentary short-range and wide area wireless technologies can be combined to achieve a cost-effective solution with the required coverage.”
According to Craig Sears-Black: “One of the most vital transport innovations is making wider and deeper use of the fleet visibility afforded by vehicle tracking systems. A good example of this is the proprietary back-of-store alerting system Isotrak plans to roll out for Asda, as part of the retailer’s upgrade to ATMS from an existing Vemis vehicle management installation.”