Turn the clock back ten years and what was the key IT issue preoccupying supply chain and logistics managers? Something, according to a 1993 report from that year’s Institute of Grocery Distribution conference I unearthed, called ‘partnershipping’.
Those with long memories may recall this ancient buzzword. It was all to do with manufacturers and logistics service providers accessing retail sales data to improve demand forecasting and cut replenishment lead times. The IGD delegates were also worrying over lack of standardisation in both wireless warehouse systems and electronic data interchange (EDI). But they were becoming rather excited about the potential of cross-docking facilities enabling 24-hour lead times.
Today, sharing data to improve forecasting is commonplace and an essential component of many trading exchanges. Technologies like web-based messaging have similarly transformed the data interchange issue and mobile data networks are almost everywhere. Use of cross-docking is widespread and lead-times in grocery, if not 24-hour, are certainly a great deal shorter than they were a decade ago.
A connected future
So what of the next few years? Technologies like the worldwide web were regarded as a consumer novelty a decade ago and business applications were only starting to emerge. In that same category today are mobile broadband and the next generation of radio frequency identity (RF-ID) tags, which will eventually enable item level source marking and tracking.
While the consumerist hype surrounding mobile broadband focuses on such things as image exchange – showing granny baby’s photo over a handset – there is obviously considerable potential for warehouse and supply chain applications. Visual product identification prompts, perhaps, for pickers or maybe highly graphical interfaces to central records to improve staff efficiency and reduce training needs.
We’re also starting to see the impact of real-time information flows, as with Marks & Spencer’s pioneering work linking product forecasts and stock allocation systems to sales data within seconds. Already M&S is using information on current sandwich sales to drive more accurate forecasts for next day delivery. While no-one seriously expects truck drivers to be given their routing instructions on-thehoof in response to checkout data, this sort of realtime infrastructure could, in theory, enable this level of responsiveness. It will certainly improve in-transit visibility, which could have a significant impact on competitiveness and relationships between trading partners.
If, for example, a supplier knows that he has ten crates of product X , destined for a middle-ranking retailer’s warehouse, sitting in a truck near Junction 15 of the M1 and he then picks up a web appeal from, say, Tesco for urgent supplies of the same line for its Northampton superstore it could be quite a marketing coup to get in there quickly and restock the shelves with a rival brand or special promotional deal. And it can all be done semi-automatically using web-based technology, real-time data networks and intelligent software. Such scenarios are not as far-fetched as they seem: already companies like Unisys are working on a rapid response exchange model along these lines and report considerable interest from key European retail chains and CPG suppliers for such systems.
With a continuing slowdown in world economies, most companies will be looking to cut operational costs for some time to come. In the supply chain that can include a move to direct importation. Already major UK retailers such as Tesco and Argos have invested in global sourcing solutions from companies like QRS, which allow them greater control of inbound logistics.
Supply chain software specialists are already seeing growing demand for online and dynamic routing solutions. It’s another area where real-time data flows are driving development with retail distribution managers able to respond to sales and switch carriers or shipment routes directly in order maintain stock availability and assortments.
As always in IT, the trend is faster, smaller, better: real-time rapid response systems with low-cost RF-ID tags, ultimately replacing bar codes, and intelligent modelling tools to automate decision-making.