Zetes predicts more creative use of auto ID and focus on warehouse to shelf edge traceability for 2009

INFORMATION: Free information is available from ZETES on the subject in this story. Click here to request a copy

Zetes UK, the auto ID specialist for the supply chain, announces its predicted market trends for 2009.  These trends provide food for thought for UK commercial organisations as the country enters the most challenging commercial climate of the past decade with European Union countries set to face more severe economic conditions compared with recent years.  

Zetes predictions are based on the direct experiences of Zetes senior UK management team, all specialists in the integration of supply chain systems using auto ID and wireless technologies, headed by managing director, James Hannay.

Across all sectors, businesses will be looking to further improve visibility of products within in the supply chain, improving confidence in the accuracy of their working data by integrating systems able to access the data from multiple external sources.  The emphasis will be on providing solutions that will improve the information flow between all the supply chain partners from manufacture through to shelf edge.  Using electronic proof of delivery (ePOD) is one way to address this issue. Overall the objective will be to build better bridges between existing DCs and retail outlets to ensure the right products are in the right places at the right time.

Zetes believes the supply chain sector will see 7 key trends throughout 2009 as logisticians look to further drive down costs and errors and increase productivity levels.

Trend 1: Greater project scrutiny and accelerated ROI expectations

Unsurprisingly, as trading conditions become tougher, companies will begin to scrutinise and re-evaluate IT projects, re-examining the underlying business case to ensure investment will not only deliver a return, but that payback rates can be accelerated.  In the past, the business case for supply chain IT projects has been based on a 2-3 year payback, but in recent months ROI expectations have been cut to 12-18 months, with further tightening of timescales expected.  

We are being asked by customers for more detailed cost justification and payback analysis before projects are given the go ahead.  Coupled with this, we see a lot of companies looking for a payback within 12 months in order to justify their investments its challenging, but still very feasible to achieve with many projects, especially voice systems where the ROI can be seen in less than 10 months says James Hannay.  This economic climate just makes every business case a bit tougher and only projects with the fastest paybacks will win approval.

Trend 2: Greater creativity and resourcefulness

The trend towards greater collaboration is widely anticipated and Zetes also expects this to continue with logistics providers such as 3PLs looking to implement enabling technologies such as ePOD systems to manage the increased process complexity this brings.  

In addition, Zetes anticipates seeing greater numbers of businesses wanting to maximise the use of their existing hardware.  Multimodal devices which enable multiple applications to be run from a single hardware platform allow for such redeployments elsewhere in the warehouse as required.  Working in this way will enable them to better leverage their existing investments for instance by running voice picking during the day in one area and then switching to goods inwards in the evenings.  

Trend 3: Greater emphasis on tactical quick wins instead of strategic projects

There will be a major focus on identifying so called tactical projects to reduce costs quickly and deliver quick wins.  Such projects could enable companies who acknowledge they need to overhaul their entire supply chain and WMS systems but instead opt for an interim solution to optimise existing processes and enhance their competitive position.  We are speaking with a number of companies who realise that long term they need a new WMS, for instance, but given current trading conditions, will seek out greater efficiencies by implementing only a voice picking system which has a lower ticket value and instantly offers process improvements, says James Hannay.  

Trend 4: Retailers seek full warehouse shelf to retail shelf edge traceability

At all levels of the retail sector a huge problem exists for retailers because they cannot accurately trace the whereabouts of stock and need unified tracking and tracing of stock from production through to distribution to shelf edge.  In difficult economic conditions stock loss prevention will become ever more crucial for retailers to manage and optimise.  Retailers and supply chain partners are looking at ways to prove whats going on in the chain with both ePOD and scanning data correlation with their systems.   

Retailers will be looking for robust solutions capable of tracking goods from the minute they are picked and leave the warehouse straight to the point when they are available for sale on the shelf edge, says James Hannay.  Having full visibility within the supply chain will eliminate a lot of costs associated with over-ordering, misplaced stock and shrinkage classic problem areas which retailers can ill afford even in the best of times.

According to Zetes, low warehouse to shelf edge visibility is a problem common to many retailers and means the business cannot maintain a true picture of stocks whereabouts at any given time.  If retailers had applications able to continually track products it would help them to better utilise their back of store area.  They could effectively create a mini warehouse enabling them to hold more products at the back of store, take advantage of seasonality trends; get products onto shelves just in time and reduce wastage levels.  Retailers are losing too much money in this area currently and we predict it will be a priority focus for retailers in 2009 using a variety of auto ID technologies to capture and transfer data.

In addition to building better warehouse to shelf edge traceability, retailers will be seeking tighter control and full traceability of their in-store promotions.  Better management of promotions will become critical in the retailers overall cost management being just one day too late or early with supporting communications can mean thousands of pounds worth of missed revenue opportunities and wasted advertising expenditure.  By using an ePOD system with RFID or SMS/GPRS communication, retailers can have 100% control over the timings of promotions and ensure full control over the promotional logistics. How many times have you gone to a supermarket after special offers were publicized only to find empty shelves where the discounted items should be?  This means disgruntled shoppers and lost sales.  During challenging economic conditions, the ability to guarantee the ROI of promotions is critical for retailers, says James Hannay.

Trend 5: RFID will be adopted in place of barcodes for track and trace

RFID is set to be increasingly widespread as a supporting technology within a broader application to improve supply chain visibility.  We are not suggesting that companies will be deploying RFID gates at entry points and significant financial investment, but astute use of RFID in a creative way, says James Hannay.  For instance, instead of using barcodes to track the delivery of pallets into stores, process efficiency could be enhanced with the use of RFID as part of a smart mobile system to check deliveries as they go into the truck or stores using a simple reader system.  Where RFID is used as a supporting technology, the business case is easy to justify and we are seeing a much greater interest from the market in such projects.  

Zetes recently completed an RFID project of this nature on behalf of Procter and Gamble using RFID readers placed under a forklift to track goods being loaded onto vehicles.  As the forklift drives into the van RFID tags drilled into the vehicle floor track the loading process to ensure goods are correctly loaded. This is a very simple system which ensures no mistakes are made and these are the kinds of RFID projects Zetes will be implementing over the coming years to help customers survive their economic difficulties, says James Hannay.

Trend 6: Voice will become widely used in the pharmaceutical and food sectors

Voice adoption grew significantly in 2008 and this is set to continue in 2009.  Zetes expects voice directed working will start to be adopted in pharmaceutical supply chain for use with store deliveries.  Additionally we will see increased interest from fresh food suppliers in voice picking, to ensure faster product turnarounds and lower wastage levels. Within the retail sector, many organisations have already migrated to voice and we expect their usage levels to increase across other DCs.  Early adoption of voice within the in-store environment is also likely to begin, as retailers look to further optimise processes and drive down costs.

Trend 7: Greater drive towards eliminating errors

As companies are required to become ever more resourceful, the emphasis on eliminating errors within the supply chain will increase.  In addition, companies will be making investments in developing a more joined up approach to identifying the sources of and quickly correcting errors.  For instance, retailers will look to better integrate their ERP systems with handheld devices, giving them real time information on whether stock pallets are on the right truck or delivered correctly.  

Overall the challenging conditions businesses will be facing in 2009 will require a highly creative approach, using auto ID technology in smarter, innovative ways to cut unnecessary overheads and optimise supply chain processes.  The winners over the coming year will be the companies who realise this need and work swiftly to make potentially very powerful changes to resolve their business issues, ensuring they are working faster, with fewer errors, and running more integrated, real time supply chain operations.

About Zetes

ZETES INDUSTRIES (Euronext Brussels: ZTS) is a leading pan-European company in the value-added solutions and services industry for Automatic Identification of Goods and People (Goods ID and People ID). Zetes uses both emerging and mature technologies (barcode, voice recognition, RFID, smartcards, biometrics), and develops Solution Architecture Frameworks to optimize the business performance of many customers in many market segments: manufacturing, transportation, logistics, retail, healthcare, finance, telecommunication, government and public services.

The Zetes group has its headquarters in Brussels, with subsidiaries in Belgium, Germany, France, Ireland, Israel, Italy, Ivory Coast, the Netherlands, Portugal, Spain, Switzerland and the UK. Zetes currently employs more than 700 employees and generated consolidated revenues of 177 million in 2007.

Comments (0)

Add a Comment

This thread has been closed from taking new comments.

Editorial: +44 (0)1892 536363
Publisher: +44 (0)208 440 0372
Subscribe FREE to the weekly E-newsletter