Chasing supply chain nirvana

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 5/24/2005

Too many companies are chasing a future vision of supply chain nirvana today. And too few are embracing the supply chain basics that can improve their operations now.

That was the message delivered in a keynote address at D/C Expo in Chicago last week by John Hill, a principal with ESYNC (419-842-2210).

Cases in point: while passive RFID holds promise for the future, proven technologies like bar codes, voice recognition, mobile resource management and warehouse management systems are underutilized today.

“Passive RFID mandates like Wal-Mart’s will revolutionize the supply chain, but before that happens, I’ll be in the home,” Hill said. “Meanwhile, there are limitless possibilities with the tools available today.”

Instead of chasing nirvana, Hill advised companies to get back to basics by focusing on five key areas.

Right environment: Companies should ask whether they have the right number of DCs in the right locales employing the right processes to serve their customers.

Right conditions: Once the facilities and processes are in place, a company should evaluate whether it has the materials handling and control systems to support those processes.

Right materials: While everyone is focused on the potential of RFID, wireless-enabled bar code, voice recognition and pick and put to light systems can ensure that the right inventory is in the right location now. “Without data capture, you can’t have real-time tracking and synchronize operations,” Hill said.

Right time: Supply chain execution systems like warehouse management (WMS),warehouse control (WCS), yard management (YMS) and labor management (LMS) are essential to fulfilling orders on time, yet too few companies take advantage of them. “There are 600,000 warehouses in the U.S. today, and only about 100,000 of them have a WMS,” Hill said.

Right people: Having the right employees, and involving them in the decision-making process is central to efficient supply chain operations. “I can learn more in a ten-minute smoke break than I can in meetings with management,” Hill said. “Your people know what’s going on and what’s going wrong in your operations. You have to get them involved in the solution.”

As to RFID, Hill advised companies who are already making the most of WMS systems, bar codes and voice recognition to “become familiar with the technology and investigate where RFID could work in your operations and then wait to see what happens.”

“Remember,” he added, “there is no silver bullet.”