Despite all the talk about novel technologies such as radio frequency identification (RFID), wireless communication and wearable systems, the logistics business tends to stick to tried and tested means of capturing data in warehouses and from vehicles in transit.
For example, most distribution operations still favour 25-year-old bar coding technology as the most reliable way of keeping tabs on goods in transit. Low cost bar code scanners are still the most widely used means of identifying both individual items and containers such as pallets and trays.
‘Bar codes cost a fraction of a penny and they are never going to be replaced in the foreseeable future,’ says Colin Pike, key account manager for Datalogic. That is not to say that the technology is standing still, says Pike. He sees increasing demand for two dimensional (2D) bar codes based on the PDF 147 standard which can hold a bill of lading in a four square inch strip (far more data than conventional bar code systems) and for longer range scanners that can read at up to two metres for palletised operations.
Hand held bar code readers connected to wireless communications have vastly improved the efficiency of receiving goods, picking them and capturing delivery documentation. Information can be gathered at pick up and delivery points, enabling logistics managers to anticipate transport needs and providing customers with on the spot paper work with the use of portable printers. Signatures can be captured using pens and touch sensitive tablets. In the warehouse the process of capturing bar codes has been speeded up by incorporating scanners into units strapped to an operator’s finger.
With such a variety of data capture technologies it is not surprising that companies have had difficulty selecting systems and keeping them up-to-date. Proprietary standards have proliferated making it hard to combine hardware from different suppliers and ensure that data can be easily transferred to back office systems. All too often buyers have been forced to buy from a single supplier in order to ensure systems are compatible.
That is changing. The emergence of standards such as the Microsoft Pocket PC and CE.net (based on the earlier Windows CE operating system) on the software side and Intel’s X-Scale architecture for low power consumption processing have enabled both systems makers and their customers to do much more mixing and matching.
For example, the latest range of identification and data capture devices from Intermec incorporates a common architecture. This allows the same device to be used for multiple applications, explains Stuart Scott, Intermec’s director of business development and marketing. ‘In the same device you can take a picture, scan a bar code, print out on a Bluetooth printer, send information by the General Packet Radio System (GPRS) and capture signatures using a pen.’
The performance of a data capture terminal is determined by its operating system. At present some 95 per cents of installed terminals run DOS, the IBM operating system originally developed for the IBM PC. Many of these systems run in terminal emulation mode, which means they rely on a host system for processing.
More recent operating systems such as Microsoft’s Windows CE and the Palm OS add intelligence to data input devices, routing captured data to the appropriate application and supporting features such as voice input and touch screens.
‘The operating system is a crucial decision, but a lot of our customers are running legacy, DOS systems and there is not much demand for Windows CE,’ says Pike. ‘There is only a definite uptake of windows CE when customers want to do new things such as introducing wearable devices.’ Despite this slow rate of acceptance, Pike sees Windows CE representing some 25 per cent of the market for portable data capture devices within four years.
Early supply chain systems operated in batch mode. They collected data over a period of time before passing it on for further processing which often took place over night. However, the arrival of on-line systems and cheaper radio frequency (RF) communications has made it possible to track and trace items almost instantly.
Real time systems have greatly improved the speed and accuracy of supply chain monitoring. A pallet can be scanned with a hand-held car code reader and data about it transmitted to back office systems almost immediately for distribution via the Internet to users at head office or in customer premises.
For these real time supply chain applications to work effectively they must be able to gather data from different manufacturers’ systems: in the jargon, they must be interoperable. Despite commercial rivalries, suppliers have made progress in improving interoperability. RF terminals from leading companies such as Cisco, Lucent, Proxim and Symbol Technologies will work together, greatly improving the flexibility of data capture systems.
One of the key drivers in the take up of RF technology has been the rapidly dropping price of RF access terminals. Two years ago they cost around E2200 now they can be had for some E450. Similar cost reductions have occurred for services such as GPRS which is provided nationally over mobile phone networks. ‘The cost of GPRS, which gives you complete traceability and routing, has come down dramatically,’ says Andy McBain, UK product marketing manager of Symbol Technologies. ‘E7.50 buys you one meg of data per month now and you can do a lot with that.’
Supermarket chain Tesco recently specified RF technology for 10,000 handhelds it is buying from Intermec. Tesco plans to use Intermec’s 700 Series Color handhelds for in-store price mark-downs (in combination with a portable printer), shelf re-cubing (printing new shelf-edge labels), logging general stock transactions and producing planograms of product layouts and shelf designs.
The handhelds are also being used in the field for checking delivery accuracy using GPRS delivered over mobile phone systems to feedback data in realtime and to check the accuracy of deliveries against invoices.
The Intermec 700, which has a larger screen than many handhelds and a 14 hour battery life, was the first device to integrate up to three wireless communication options in a single device. The handheld features a wireless local area (802.11b) radio, a GSM/GPRS wide area network radio and a fully integrated power-managed Bluetooth radio for very short range work.
These options allow the same device to be used to communicate status and information in real time from many different locations: via wireless local area networks in stores, warehouses and distribution centres or via a wide area network for mobile operations such as delivery vehicles.
Most existing RF networks are used to transmit data from bar code scanners or keypads, but in the future they are increasingly going to be handling data picked up from miniature RFID transponders (radio reflectors) in tags attached to individual items or containers.
RFID – the hottest technology
Thanks to strong industry campaigning from leaders such as Wal-Mart, Proctor & Gamble and Gillette, RFID has become the hottest new technology in data capture. Wal-Mart recently demanded that its top 100 suppliers use RFID tagging on containers sent to 107 Wal-Mart depots in the US, while Marks and Spencer has announced that a trial involving 3.5m tags on bins containing chilled food will pay for itself in a year.
RFID offers a number of advantages over bar coding. Tags can hold much more information than can be contained in even a 2D bar code and the data can also be altered or re-recorded. Tags are also easier to read, because radio waves can be picked up round corners or through materials, and signals from many tags can be read at the same time.
There are two different types of tag. Active tags contain a power source and additional circuitry, while passive tags of the sort being proposed for item level tagging merely reflect back a signal to a base station.
Sophisticated tags for use on containers can be the size of a video cassette recorder and are likely to be protected against shock and extremes of temperature. They may also be connected to sensors recording information about temperature and other environmental factors within the container.
Some RFID proponents claim that supply chain efficiency could be improved by a factor of 10 if every single manufactured item could be tagged cheaply enough with a unique number. Tags would have to cost less than one cent, compared with a current cheapest price of 15 cents.
However, the industry hype has come in for some knocks recently. In the US RFID has become embroiled in a debate about big brother tactics by retailers. Pressure groups in the US are concerned that the technology might be used to track the movements of customers in-store and breach their privacy rights by linking that information to existing customer databases. They also fear that RFID tags might be used by thieves to track down the owners of valuable items.
Some suppliers are also having second thoughts about item level tagging. For example, Gillette announced that it was putting a planned investment in 500m item level tags on hold to concentrate on tagging containers. ‘One of the problems for item level tagging is the amount of computing power you’d need to monitor stock levels line by line,’ says Callum Moy, practice director, supply chain management at Unisys, who is running a seminar on the subject in October. ‘In a store it would mean monitoring 200,000 RFID tags.’
That doesn’t deter the enthusiasts. ‘It’s just beginning,’ says Dr Peter Harrop, chairman of research firm IDtechEx. ‘For the past 50 years, since the technology was used in World War II fighters to identify friend or foe, it has been in the wilderness. Only one billion tags have been sold. It will take just one year to sell the next billion.’
Although the technology has tremendous potential that potential is still largely untapped. Most initial applications of tags in logistics operations have adopted portal arrangements which involve wheeling goods through a gateway.
Third party logistics company Exel is one of the early adopters of RFID. The company has installed a pallet tracking system for the automotive industry that tracks pallets using tags.
Operating from a 18,580 sq m storage facility in Swindon, which is serviced by rail and road links, Exel runs a pallet transportation and distribution system for car body pressings and sub-assemblies. The Company’s prime objective is to ensure availability of pallets to meet production schedules issued by the customer’s pressing plant.
The pallets are scanned by hand-held scanners and the information is downloaded onto a Windows based PC with the aid of an Assetrak wireless data communication facility from Intellident. Exel knows the location of the pallets, number of pallets available and the ability to track pallets as they move from the storage facility to the pressing plant and onward distribution.
One key technical issue with current RFID technology is the limited read range of the tags. For example, the typical passive tag systems available today have a maximum effective range of around 50cm – which means the tagged item has to be very close to a mobile reader in order to catch it.
‘Furthermore,’ says Anton du Preez, managing director of mobile systems company RangeGate, ‘where a tag is attached to a metal object the reader will need to be around three millimetres away from the metal if it is to function. In effect this results in the manual scanning of tags, bringing no time or functional advantage and certainly no cost advantage over cheaper bar coding systems.’
It is possible to get a more usable scanning range, but this relies on deploying higher-frequency systems, or active tags that have their own internal power source. There are also still regulatory hurdles on power output in the available higher-frequency bands to be overcome, which means there isn’t an international standard for equipment as yet. And although some active tag systems boast ranges of up to 85 m, getting maximum scanning range adds to the cost of tagging.
While the costs of RFID are higher than bar coding at present, much of this comes from the infrastructure required to operate the technology smoothly, together with a lack of reading standardisation.
‘The versatility of the few portable devices that are available has also come into question,’ says du Preez. ‘For example, at present each tag manufacturer has its own reader, meaning companies can become tied to a single (or at least limited) supplier of equipment, restricting choice and price options. In contrast, any reader will read any of the standard barcode symbologies.
‘While this may be an issue it should be remembered that barcode technology has been around for many years and the advantages it offers may not surpass the more detailed data capture and control offered through RFID. However, as with all new technology, RFID will continue to evolve, bringing reductions in cost and advances in product capabilities.’
One thing is certain; the new techniques for capturing data are going to affect everyone. The rate at which these new gizmos are adopted will vary according to the size of a business and the types of goods it handles. Tier 1 suppliers are well advanced in their use of bar code and wireless technology. Tier 2 companies are beginning to move away from paper systems. The rest will have to follow suit before too long – there is no getting off the merry-go-round.