Technology in logistics and supply

chain management : A scenario scan

P.P. Sengupta
Fellow, Institute of
Engineers (India),
Former Chief General
Manager (MM) ,Coal
India Ltd.

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 Topics of discussion
 Overview of supply chain
 Technology in SCM’s internal functions
 Technology in supply chain integration,
visibility and collaboration
 Technology in transportation and
logistics
 Technology in Warehousing ,
material handling and shipping
 Technology of future for SCM and
2 logistics
 What is a supply chain ?

The activity
that manages
the flow of
information,
money, and
material across
.
the extended
enterprise,
from supplier
through the
functional silos
of the firm to
customer

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 The Supply Chain
 Supply chain is the series of players and activities that take
part in the movement of materials, goods, services,
money and information from suppliers
supplier to the customers customer.
 “Chain” is a simplification of the complex web of
suppliers, sub-assemblers, manufacturers,
warehouse operators, distributors, retailers ,
logistics providers, bankers, insurance companies,
freight forwarders, transporters etc who are the
primary actors in managing the physical flows “from womb
to tomb.”

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 What is logistics ?

Logistics is that part of the

supply chain process that
plans, implements, and
controls the efficient,
effective flow and
storage of goods and
related information from
the point of origin to the
point of use in order to
meet customers'
requirements

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 Technology in SCM’s internal
functions

 ERP
 e-procurement and e-tendering
 Reverse auction
 Collaborative Planning Forecasting and
Replenishment (CPRF)
 Vendor Managed Inventory (VMI)

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 Collaborative Planning Forecasting and
Replenishment (CPRF)

 CPFR is a business practice that combines the intelligence of

multiple trading partners in the planning and fulfillment of customer
demand.
 The consumer is the ultimate focus of all efforts
 Buyers” (retailers) and “sellers” (manufacturers) collaborate at every
level
 Joint forecasting and order planning reduces surprises in the supply
chain
 The timing and quantity of physical flows is synchronized across all
parties
 Promotions no longer serve as disturbances in the supply chain
 Exception management is systemized

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 Vendor Managed Inventory
 Vendor Managed Inventory simply means the vendor (the
Manufacturer) manages the inventory of the distributor. The
manufacturer receives electronic messages, usually via EDI,
from the distributor. These messages tell the manufacturer
various bits of information such as what the distributor has
sold and what they have currently in inventory. The
manufacturer reviews this information and decides when it
is appropriate to generate a Purchase Order.

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 Vendor Managed Inventory
 Under a Vendor Managed Inventory setup, the
Manufacturer would setup the Distributors inventory
plan.
 The Manufacturer would then monitor the Distributors
inventory levels, keeping track of the sales and the current
inventory level.
 Once the Manufacturer believed the Distributors inventory
levels were too low, the Manufacturer would generate the
Purchase Order and deliver the product
to the Distributor. Vendor Managed Inventory gives the
control over the inventory to the Manufacturer.

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 Technology in Supply Chain integration,
visibility and collaboration
 SRM
 EDI
 Software Agents
 Analytics software
 Comprehensive connectivity – from wireless LAN
technologies, cellular networks, 4G
 Voice and GPS communication integrated into rugged
Computers
 Speech recognition
 Digital imaging
 Social Media

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 Supplier relationship management
 Supplier Relationship Management (SRM) is the
discipline of working collaboratively with suppliers in
order to maximise the value derived from those supplier
relationships.
 Primarily, SRM tools have been developed to reduce the
total cost of ownership (TCO) for procured goods, while
creating competitive advantage for an organisation through
deeper relationships with its suppliers.

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 Electronic Data Interchange
 EDI is the computer to computer exchange,
between two companies, of standard business
documents in electronic format.
 There are two key elements in basic EDI. First,
electronic documents replace paper based
ones.
 Second, the exchange of documents takes place
in a standardised format. (EDIFACT / XML)

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 Software agents
 Software agent is a self-contained program capable of
controlling its own decision making and acting, based on its
perception of its environment, in pursuit of one or more
objectives.
 “Gopher” agents, which execute straightforward tasks
based on pre-specified rules and assumptions (eg inform
me when the inventory deviates by 10% from
its mean position or tell me when I need to reorder stock
items).

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 Software agents
 “Predictive” agents, which volunteer information or
services to a user, without being explicitly asked,
whenever it is deemed appropriate (eg an agent may
monitor discussion groups on the internet and return
inputs that it believes to be of interest to the user
 A freight agent may inform its user that a transport
firm is offering large discounts on delivery from China

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 Ultrabroadband Communication
(4G)

 Mobile ultra-broadband Internet access, for

example to laptops with USB wireless modems, to
smart phones, and to other mobile devices.
 Conceivable applications include amended
mobile web access, IP telephony, high-
definition mobile TV, video conferencing and 3D
television.

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 Ultrabroadband Communication
(4G)

 The Mobile WiMAX standard and Long term

evolution (LTE) standard
 Based on the Google Android operating
system
 Will be used extensively in handheld devices,
smartphones and tablets.

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 Speech recognition
 Speech recognition for hands-free data entry – is also
undergoing a new wave of innovation and adoption.
Speech recognition reduces the need for users to look
at a computer display.
 Speech synthesis/recognition capability can now be easily
embedded into numerous legacy software packages,
including warehouse management, picking and putaway,
inventory, inspection, quality control and other
applications.

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 Speech recognition

 Terminal emulation (TE)-based speech recognition

technology eliminates the need for a separate
speech server and a proprietary interface between
the speech system and the application software. TE
enables speech synthesis to reduce the need to
look at the display, and speech recognition to
function as a true input technology,.

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 Speech recognition

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 Digital Imaging
 Transportation and distribution companies are using
digital cameras integrated into the mobile devices or
handhelds so their drivers can capture proof of
delivery, store stamped invoices, and record conditions
that prevent delivery or proof of service.
 Capturing shelf displays and monitoring documentation by
inspectors, collecting evidence for accident reports, and
recording damage and usage conditions for warranty claims.

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 Digital Imaging Devices

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 Social Networks and SCM

 Many companies already use social

media as a way of interacting with their
customers and keeping abreast of new
trends.
 Real-time integration already allows
companies to coordinate with the
entire logistics network.
 Internal reports can be processed with
dramatic precision, and external players
can communicate any potential
problems before they happen.
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 Technology in transportation and
logistics

 Voice and GPS communication integrated into

rugged computers
 Vehicle dispatching systems
 Tracking software
 Portable printing
 2D bar codes
 Real Time location Systems (RTLS)

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 GPS devices

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 Portable printers

 Provides signed delivery receipts, purchase

orders, work orders and inspection reports.
 Using mobile printers and computers together lets
sales, service and delivery personnel give
customers the documentation they desire, while
creating an electronic record that frees the
enterprise from having to process paperwork.

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 Portable printers

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 2-D barcodes

 Two-dimensional bar codes have long been a

proven and popular technology for operations
where it is desirable to present a lot of information
in a limited space.
 Intermec’s EX25 auto-focus scan engine is the first
bar code reader that can read linear and 2D bar
codes alike from 50 feet away and as close as six
inches.

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 2-D barcode Reader

A 2D (two-dimensional)
barcode is a graphical image
that stores information both
horizontally and vertically.
2D codes can store up to 7,089
characters, significantly
greater storage than is possible
with the 20- character capacity
of a uni dimensional barcode.

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 Real Time location Systems (RTLS)

 Real Time Locating System (RTLS) technology

automatically tracks the real-time location of moveable
objects, such as equipment, and people in indoor
environments.
 Near field communication (NFC) is a standards-based,
short-range (a few centimeters) wireless connectivity
technology.
 Ultra-wideband (UWB) RTLS is still a niche within the
RTLS field. This is a specialized market requiring custom
transponders and readers.

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 Real Time location Systems (RTLS)

 RTLS improves the quality of the visibility data

critical for management to make informed
decisions.
 Ultrasound Identification is a real-time locating
system (RTLS) or indoor positioning system (IPS)
technology used to automatically determine and
identify the location of objects with room
accuracy.

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 Real Time location Systems (RTLS)

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 Technology in Warehousing , storage
and shipping

 WMS
 Rfid
 Automated Storage and Retrieval (AS/RS)
 Automated Guided Vehicles (AGV)
 Automated Identification (Auto ID) applications

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 Warehouse Management Systems
(WMS)

 Warehouse management systems (WMS) are best

described as the advanced technology and
operating processes that optimize all warehousing
functions. These functions typically begin with
receipts from suppliers and end with
shipments to customers, and include all
inventory movements and information
flows in between.

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 Warehouse Management Systems
(WMS)
 Receiving reports, pick tickets, move tickets,
packing lists, etc., which are typically maintained
as hard copies, can all be maintained electronically
by WMS.
 WMS provides GUIs wherein most of the time the
operator has to just scans the barcodes. Default
navigation of cursor on the screen mimics the
standard business rule.
 Thus WMS eases the operator's task and makes
the data input process fast, increasing the overall
efficiency of the operator.

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35
 How Wireless WMS Solutions Work

 Wireless warehouse solutions work by linking

warehouse workers to the backend application
server where warehouse activities are being
recorded via a wireless handheld device. The
device tells employees where to go to pick up, put
away, count, or move product

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 How Wireless WMS Solutions Work

 When items are received to be put away, the staff

members scan a bar code on the box. The bar code
when scanned reveals information about the box’s
contents. Items from the box are scanned and results
are compared so discrepancies are immediate
obvious. The software then directs warehouse staff
to put away items into a suitable location.

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 How Wireless WMS Solutions Work
 The Basic Design of AS/Rs in warehousing A “high- rise”
storage rack which can be up to 120 feet high is being used
in the AS/Rs in order to maximize the utilization of the
warehouse cubic space. Each storage location has their
unique bar-code or chip to storage the information of the
storage location. While the carriers reach the dock of the
warehouse, the goods is being loaded or unloaded by
“battery-powered driverless vehicles” to or from the
conveyer belts. .

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 How Wireless WMS Solutions Work

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 Radio frequency identifiers
 RFID are small electronic devices that consist of a
small chip and an antenna. The chip typically is
capable of carrying 2,000 bytes of data or less.
 The RFID device serves the same purpose as a bar code or a
magnetic strip on the back of a credit card or ATM card
It provides a unique identifier for that object. And, just as a
 bar code or magnetic strip must be scanned to get the
information, the RFID device must be scanned to retrieve
the identifying information.

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 Radio frequency identifiers
 RFID device does not need to be positioned
precisely relative to the scanner.
 RFID devices will work within a few feet (up to
20 feet for high-frequency devices) of the scanner.
For example, you could just put all of your
groceries or purchases in a bag, and set the bag on
the scanner. It would be able to query all of the
RFID devices and total your purchase
immediately.

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 Radio frequency identifiers

The information on tags is

read when they pass by an
RFID reader, and that
movement is captured and
managed by the system.
Thus one can link the
physical world to the digital
world without any human
interaction

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 Automated Storage and Retrieval
(AS/RS)

 Automated retrieval systems are fully automated

robotic systems controlled by computers that
enable all the operations which are unloading
goods from carrier, sorting, put- away, storage,
order-picking, staging and loading of goods
automatically.
 The basic AS/Rs system is normally built up by
four main components which are: Storage rack,
input and output systems,

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 Automated Storage and Retrieval
(AS/RS)

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 Automated Storage and Retrieval
(AS/RS)

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 Automated Guided Vehicles (AGV)
 An automatic guided vehicle (AGV), also known as a self
guided vehicle, is an unmanned, computer- controlled
mobile transport unit that is powered by a battery or an
electric motor.
 AGVs are programmed to drive to specific points and
perform designated functions. They are becoming
increasingly popular worldwide in applications that call for
repetitive actions over a distance.

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 Automated Guided Vehicles (AGV)
 Common procedures include load transferring,
pallet loading/unloading and tugging/towing.
Different models, which include forked, tug/tow,
small chassis and large chassis/unit load, have
various load capacities and design
characteristics.
 They come in varying sizes and shapes,
according to their specific uses and load
requirements.

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 Automated Guided Vehicles (AGV)

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 Automated Guided Vehicles (AGV)

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 Automated Guided Vehicles (AGV)

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 Automated Guided Vehicles (AGV)

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 Technology for future SCM

Future SCM s will be

:
– Interconnected
– Intelligent
– Instrumented
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 Future SCM : Interconnected
 Agile, on demand network of suppliers, contract
manufacturers, service providers and other (financial and
regulatory) constituents
 Outsourcing non-differentiating functions to share risks
across the global network
 Variable cost structures that fluctuate with market
demand
 Shared decision making with partners at source (local,
regional, global strategies)
 Integrated, networked asset utilization and
management

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 Future SCM : Intelligent

 Network and distribution strategy analysis and

modeling with event simulations
 Scenario-based operational analysis
 Simulation models and analyzers to evaluate
flexibility factors – service levels,
 Costs, time, quality – with inventory
synchronization

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 Future SCM : Instrumented

 Sensor-based solutions to reduce inventory

costs with increased visibility
 Production and distribution process detectors to
monitor and control energy usage and waste
 Physical transportation, distribution and facility
asset management, controlled and monitored

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