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MOBILITY: Creating the Intelligent global supply chain: As shippers strive to develop intelligent supply chains, smarter, faster mobility and connectivity tools are playing a key role in helping them get there.

The global supply chain may be getting more complex and a little harder to manage, but rapidly advancing technology and some enterprising IT vendors are helping logistics managers work through those issues and run profitable, productive operations. Mobility and connectivity software and hardware that let devices "talk" to one another, share information and get things done faster--both inside an organization's four walls and across its end-to-end supply chain--are in particularly high demand right now.

From his vantage point as VDC Research's executive vice president of enterprise mobility and connected devices, David Krebs says that one recurring theme he's hearing this year is the "intelligent supply chain." Defined as "smart enough to predict or anticipate customer demands, sense changes in supply and demand, and quickly respond to unplanned events," the intelligent supply chain leverages information, data and fast decision-making to help global companies work more efficiently.

It also enables high levels of product and shipment traceability, both of which have become the veritable Holy Grail for global shippers that must not only comply with a string of new governmental regulations, but are also answering to a more demanding customer base. And while traceability isn't a new concept, Krebs says a 10% spike in food recalls over the past five years in the U.S. is just one of several incidents pushing shippers to implement intelligent supply chain technologies.

"The romaine lettuce E.coli outbreak of 2018 was the poster child of what can go wrong," Krebs points out, noting that the FDA was unable to pinpoint the exact location or source of the contaminated lettuce.

Because of this, the agency couldn't issue a formal recall, but rather an "advisory" for restaurants and retailers to voluntary remove lettuce from their shelves. "Those retailers and restaurants were unable to get credit from the producers and had to throw out all of their romaine lettuce," says Krebs, "disposing of a substantial amount of good lettuce in addition to the contaminated lettuce."

All told, the cost of this single recall reached into the tens of millions of dollars--a clear sign of a market in need of a more accurate approach to item identification, says Krebs, who expects more companies to make traceability a top investment priority this year.

Along with visibility-driven traceability initiatives, VDC Research sees analytics playing a greater role in global supply chains over the coming months. In particular, Krebs says that for the consumer packaged goods (CPG) and retail sectors, offering customers multiple fulfillment options (i.e., ship from DC to store pickup and ship from store) and orchestrating last-mile distribution is becoming a more acute challenge.

"Moreover, the profitability of each fulfillment channel differs substantially, adding another wrinkle to the challenge," Krebs says. "Successful shippers will need to be able to respond dynamically to fulfillment and last-mile delivery options to better manage profit margins and avoid margin eroding delivery costs."

Better visibility, lower costs please

According to logistics and supply chain executives who responded to a 2018 VDC survey, the top three mobility investment priorities right now are increasing visibility, decreasing delivery costs, and improving workforce productivity. To help shippers ease these pain points, vendors are developing new software, hardware, devices, and applications that address one or more of the challenges.

For example, Krebs says that the biggest mobility trend over the past 12 months or so has been the adoption of Android-based devices to support business critical workflows. Vendors have offered various approaches to managing this shift--from enterprise issued purpose-built devices from vendors like Zebra and Honeywell to support of bring your own device (BYOD) for contract workers.

"However, the increasing enterprise commitment by Google for Android--and the investment by device OEM and software partners to secure, stabilize and support Android for enterprise workflows--has transformed the market," says Krebs, adding that the first wave of Android migration was primarily for field and customer facing workflows. The next wave will happen as mobile technology in the warehouse and DC modernizes. "This will represent a major investment priority over the next 12 months to 24 months," he says.

In addition, the migration of enterprise applications to the Cloud, adoption of standards-based tools, and the continued reduction in the cost of key sensing and connectivity solutions has "massively affected supply chain operations," says Krebs, who points to simplicity and time-to-market as the key themes for supply chain technology decision-makers right now.

"While accurately measuring return on investment (ROI), security concerns and resistance to change remain key technology acceptance barriers," Krebs explains, "the impact of mobile solutions in the supply chain is far-reaching. The leading applications or workflows that are being [implemented] range from standard applications like proof of delivery and real-time routing, to emerging capabilities like robotics, automation and predictive analytics."

Enter artificial intelligence and machine learning

Bob Hood, a Capgemini principal and lead for the group's Move Domain practice, is also seeing more shippers double-down on their traceability initiatives. Using the Internet of Things (IoT) and sensor-based technology, for example, importers and exporters using ocean carriers can not only track the location of their containers, but also the data, information and attributes associated with those containers and their contents.

And so, what was once a "black hole" of visibility when shipments were on the high seas has come into clearer view on shipper and carrier radar screens. "Shippers can tell if their shipments have been tipped or damaged, or if the contents inside haven't been maintaining target temperatures," says Hood. "Sensors are collecting all of that information, presenting it in a meaningful way, and then allowing shippers or their carriers to manage those issues on an exception basis."

Of course, getting to that "meaningful" information isn't always easy, nor is sifting through it to find out what data is actionable and what can be ignored. This is where artificial intelligence (AI) and machine learning (ML) enter into the picture. The former gives computers the ability to imitate intelligent human behavior, and the latter is a subset of AI that gives the same computers the ability to learn without being explicitly programmed.

When combined, these two advanced technologies can clue global shippers into the most important activities taking place in their end-to-end supply chains. Then, AI and ML can associate those activities with an appropriate response that can either be automated or managed manually--depending on the specific situation.

"That's an area where we're seeing a lot of innovation among the solution providers right now," says Hood, "and high levels of adoption by companies that are looking at these technologies."

5G: A catalyst for change?

As he surveys the global supply chain and its key technological drivers, Krebs sees emerging technologies like automation and self-driving vehicles entering the picture more and more over the coming year.

Another emerging technology that's garnering attention right now is 5G, the latest generation of cellular mobile communications that succeeds the 4G, 3G and 2G systems. Not quite ready for prime time, 5G-enabled devices are expected to be available this year, "but their impact on core mobility markets will be limited at best in 2019 and 2020," Krebs says.

Despite those limitations, Krebs does see some near-term opportunity for 5G, and particularly when it comes to replacing existing Wi-Fi infrastructures that shippers have come to rely on to run their mobility and connectivity devices.

"Make no mistake, Wi-Fi is preferable for most use cases and represents a sunk cost for many organizations," Krebs points out. "However, existing Wi-Fi infrastructure supporting wide-scale operations in large warehouses and DCs presents challenges like cost of support and quality of service."

By bringing higher speeds for the movement of more data, lower latency for better responsiveness, and the ability to connect to many different devices at once to accommodate smart devices and sensors to the table, fifth-generation cellular wireless could eventually replace costly and difficult-to-manage Wi-Fi infrastructure in certain environments.

For example, introducing 5G wireless networks into industrial settings could support existing performance requirements, says Krebs, while simultaneously enabling new use cases and efficiencies. "Advances in interrelated technologies such as IoT devices, machine vision, and robotics could vastly improve manufacturing operations," he says, "but existing wireless networks like Wi-Fi and long-term evolution (LTE) are simply not robust and reliable enough to support these machine-type communications in such high-stakes environments on a large scale.

Finally, Krebs says the benefit of Wi-Fi being "free" once deployed--as opposed to paying cellular network connection fees--doesn't factor in to the significant maintenance and support costs associated with large-scale industrial Wi-Fi networks. "With 5G serving as a catalyst for Industry 4.0," adds Krebs, "industrial organizations are rethinking their approach to networking and connectivity."

Bridget McCrea, is a contributing editor to Logistics Management
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Title Annotation:Warehouse/DC Management
Author:McCrea, Bridget
Publication:Logistics Management (Highlands Ranch, Co.)
Date:Feb 1, 2019
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