Data Hungry Supply Chain Struggles to Make Technology Case
The availability and demand for data in all areas of the supply chain (manufacturing, warehousing, shipping, etc.) is growing at a rapid rate, necessitating technology that can properly capture it. However, 43 percent of respondents in a survey of 900 industry leaders noted leading barriers to technology adoption including lack of a clear business case to justify the investment according to MHI’s Annual Industry Report.
In our experience, data collection, sharing and analysis tools are a must for modern supply chain organizations, and in particular managers benefit by accessing and making quick decisions using near-real time information that impacts business efficiency. Today customers require a two-way flow of information for real-time insight and companies that aren’t harnessing that data are falling behind.
Furthermore, the above report states survey respondents, in each of the last two years, cited cost of implementation as a significant barrier to adoption of the technologies that enable “always-on” supply chains. However, despite these barriers, the supply chain market is starting to see a shift that could remove them altogether because:
1) Technology Implementation Costs Declining
Sensor technology is enabling data collection, but until recently its high cost proved prohibitive. Today, sensors costs have dropped dramatically. For example, MHI notes an accelerometer – which can be used to monitor equipment or vehicle performance for safety and/or security purposes – that costs $2 in 2006 today costs as little as 40 cents, a decrease of 80 percent; and the price of moving data across networks and of securing storage space has also plummeted.
The cost of handheld mobile computing solutions has also declined, while at the same time being easier to integrate and manage into operations. New handheld computers also offer more power and capabilities then previous generation devices, giving them the potential to adapt to a company’s changing needs. However, they require a different mindset, staff training, hiring of people with different skillsets to manage and analyze the data. With that being said, automated data collection technology in the supply chain is becoming more attainable and companies that don’t adopt run the risk of fading behind the competition.
2) The Increasing Role of Predictive Analytics
With data now more readily available, supply chain organizations need to utilize and act on it. Now that supply chain organizations have the cost-effective means to implement the technology needed to take advantage of available data, we will see a rise in analytics adoption rate. MHI’s survey showed that while analytics adoption stands at 22 percent, it is expected to grow to 80 percent over the next six to 10 years. In the supply chain arena, analytics will offer managers the ability to oversee inventory more efficiently and plan transportation that can enhance customer service while improving the bottom line.
3) Rugged Mobility Solutions to Drive Action and Efficiency
All areas of the supply chain are potential points to capture, analyze data and make decisions. The more areas of a company’s business that are connected, the more actionable data they have. In our experience, data is the currency of success in the supply chain and the rugged mobile devices that help capture that data are mission critical. Putting purpose-built tools in the hands of the user that meets their needs becomes imperative. Whether it’s the manufacturing facility, warehouse manager, yard jockey or driver delivering goods, placing the right technology in their hands is essential for feeding and utilizing that data needed to make better business decisions and improve the customer experience.
Rugged computing devices, tablets and handhelds in particular, should be the first choice given the variety of environments they can be reliably deployed in. With specialized data capture technologies, such as RFID and Internet of Things (IoT), information on shipping, warehousing, throughput, location and status can be made available in real-time for improved efficiency and customer satisfaction.
Supply chains have yet to take full advantage of the data available to them, but the industry is on the horizon of innovation that will ignite change in the coming years. For more information on Panasonic’s mobility solutions for the supply chain, head to our website.
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