Track and trace technology has evolved to a stage where it can now offer an endless list of cost saving benefits. The technology has matured to the extent that not only is it cheaper than five years ago, but the value is significantly better. “It’s still amazing that logistics companies haven’t fully embraced the opportunities that modern track and trace solutions provide,” says Chris Wright, managing director of mobile computing systems supplier, Skillweb.
“Companies will quickly recoup their investment as they enhance their efficiency, improve security, communicate with their drivers, track and trace their trucks, trailers and individual consignments, and provide real-time information to their customers about the state of their deliveries.”
As an investment costs are still high, although the price of the hardware has come down a lot. But terminals are cheaper, and so are air time deals and software applications. “It’s not the cost of the technology that makes it a no-brainer, but the value,” says Wright.
“Now there’s the ability to collect data almost instantly, display it on a web environment, and provide detailed management information from the data.”
Skillweb has been able to reduce its core application price structure and still provide more functionality, for example satellite navigation, geo-positioning techniques, reverse logistics and collections are now available as core elements.
Evan Puzey, global vice president of product management at Kewill, says: “Service providers can deliver a solution that is essentially an information hub for all players in the supply network, the investment for each player is significantly reduced as they each don’t have to install their own selected technology and then integrate it to their partners solutions – something that has inhibited collaboration and visibility in the supply chain for the last decade.”
Fuel and workforce costs make up two of the biggest overheads logistics operators deal with. DigiCore managing director Tom O’Connor says: “As part of a fleet efficiency programme, vehicle tracking can support fuel savings in excess of ten per cent, while the better optimisation of mobile resources coupled with reduced overtime claims can have a similar impact on the wage bill.”
Codegate managing director Terran Churcher says it’s very difficult for companies to save money. Companies need to be imaginative if they’re to make extra profit and stay ahead of competitors. A system should start paying for itself in less than 18 months. The extra revenue brought in as a result of investing means the technology can pay for itself.
Churcher points to Mighty Pest Control – a customer which has seen a 20 per cent increase in ROI in just over a year. It made a £40,000 – £70,000 yearly saving from using track and trace to reduce fraudulent activity through the manipulation of time sheets.
Other benefits include proof of vehicle check reminders, such as mileage and roadworthy checks, which encourages compliance with health and safety issues. Churcher reckons companies can make tax savings from reduced National Insurance costs, by providing proof of private mileage. It can also help companies keep abreast of legislation – such as proof of Working Hours Directive compliance.
Andrew Bernard, chief executive of courier CitySprint, argues that track and trace boosts relations between customer and supplier. Making operations transparent, “lets customers into your front room”, improving both the trust and confidence between the two parties.
Bernard says the cost of communicating via GPRS and mobile phone, has come down over the past five years, which has made it more affordable for courier companies. “To retain the larger customers, couriers must have track and trace functions, or they won’t get past the door.”
Until now track and trace has mainly been used by the big companies. But reduction in the cost of the technology means it may start appealing more to the small to medium companies. In time, competitive pressures may leave smaller companies with little choice but to invest.
Dirk Staelens, vice president of customer service and chief product innovation officer, at fleet management and software provider Transics, believes track and trace is making a big impact in road transport, wholesale, retail, repair and construction sectors. But he reckons some of the market barriers are down to inexperience or bad experience of IT companies, unawareness of the benefits of telematics, lack of confidence in market players, and fragmented industry structure.
When choosing between the different systems available, it’s important to select a single source supplier for all but the airtime. Terran Churcher of Codegate says: “Airtime providers are always leapfrogging each other in providing lowest cost data rates – keep the ability to switch.
“Evaluate back-end integration capability, hardware independence, maintenance and repair capacity, together with software capability, both packaged and bespoke.” It’s also important to seek outright purchase or finance lease providers as all-in monthly fees work out more costly.
Like all technologies, track and trace is constantly developing upgraded systems and future applications. DigiCore managing director, Tom O’Connor, says the Galileo positioning system, being developed by the European Union, is likely to drive innovation in location-based services as it will offer new alternatives to users.
“Although not scheduled to be operational until 2013, there is already talk that more precise measurements will be available compared to the existing US and Russian offerings, enabling far more accurate location data to within a metre,” he says. This will increase the effectiveness and usability of the tracking technology.
O’Connor reckons advances in power management will also increase what and how businesses in the supply chain monitor. “Currently, the majority of systems still need to be hard-wired into a vehicle, but systems are beginning to appear that possess their own power source, enabling operators to track trailers or even cargo,” he says. As this technology develops and becomes more efficient, a wider range of tracking solutions will become available powered and un-powered assets.
Raymond Wolfert of Unitech Electronics, says RFID is likely to add value to the market as it offers the same functions as barcodes. Since RFID tags transmit information to a tracking device using radio waves, no line of sight is needed between the tag and tracker.
But David Picton, logistics solutions director at Motorola’s Enterprise Mobility business, says the most effective innovations are those which exploit a mix of capture technologies depending on asset criticality, environmental conditions and investment return.
“In synchronised supply chain operations, we see a mix of barcode, voice, RFID and direct part marking, where dot-matrix codes are physically etched or sprayed onto metal components – allowing information which will not wash or rub off to be stored and later captured,” he says.
Wolfert points to GPRS as another innovation driving the technology forward. He says it offers a technology which can send and receive mobile data more efficiently, faster and more cost effectively. GPRS allows users to be online continuously but only paying when data is transferred to or from the back office systems.
Evan Puzey reckons the largest technological innovation is the advance in connectivity. The global supply networks of today and the future, involve many partners including freight forwarders, manufacturers, 3pls, and retailers. “Connectivity now allows track and trace to automatically populate individual stakeholder’s systems of all shapes and forms with the information they need.”
Chris Wright of Skillweb, says: “We are where we are today largely because of steady improvements to memory, processor speeds, reliability, and stable communication bandwidth in the mobile computer hardware. This coupled with the continued improvement in the Internet and the instant access data means businesses can rely on their system providing a robust, capable business system.”