Bangalore: At the heart of all logistics management lie two questions: “Where are the goods?” and “When will the goods arrive?”
A third poser is gaining weight: “How are the goods being moved?”
Logistics management is evolving from the rustic into a semi-science that uses high technology to ensure cost effectiveness, speed, safety and security in moving goods.
The technologies seek to enable what the industry calls end-to-end visibility and ensure that service levels are not affected by the ripple effects of delays, redeploying assets if necessary.
Key technologies driving this end-to-end visibility in the logistics chain, either from the perspective of the mover of goods or the logistics service provider, centre around global positioning systems (GPS) for tracking movement; sensors for monitoring weight, fuel consumption, temperature and other metrics; radio frequency identification (RFID); and an accompanying layer of software for information management, data storage, display, control and communications.
These seek to integrate fleet management on road, air cargo management, warehouse management and, where needed, inventory management.
Greater levels of customization, the need to access resources not just across companies and regions, but globally as well, and Web-enabled purchases and payments, have meant increased complexity in the supply chain. Logistics has become a part of the competitive equation.
The RFID factor
RFID is similar to bar code identification, but is powered by radio signals that can be read at greater distances. While a bar code is manually scanned at a close range, an RFID tag can be read by a device placed in a doorway as the object passes through, or by readers placed anywhere in a room or warehouse.
RFID tags are of two types: active and passive. An active tag is powered by a battery and its transponder emits information embedded on a chip. This is read by a device called a reader or interrogator. A passive tag transmits signals using power received by the reader in the form of electromagnetic waves.
Cost is an important factor in RFID technology. Even the cheapest passive RFID tag costs at least $1 (Rs45).
To ease the transition, one common type of RFID tag in use these days is a smart label. It comes with an adhesive sticker, is applied to a product or container, and contains printed text, a bar code and a passive RFID tag as well.
Renjith B., marketing manager (South Asia) of global logistics company Damco International A/S, part of the AP Moller-Maersk Group, said because RFIDs are expensive, logistics managers look for a closed loop, where an RFID tag can be recovered and reused.
Even the technology-oriented G.R. Gopinath, pioneer of low-fare aviation in India and now chairman and managing director of Deccan Cargo and Express Logistics Pvt. Ltd, which runs cargo carrier Deccan 360, is cautious about when and how his firm will introduce RFIDs.
“We want new technologies to be funded by the business itself, rather than simply keep adding it, but technology is vital in keeping up the service levels we are aiming for,” said Deccan 360’s chief information officer Ajay Bhatkal.
GPS, associate sensors
GPS has entered the everyday mindspace, with mobile phones offering maps and the easier availability of navigation systems for cars. In logistics, vendors do not offer just navigation services. GPS now comes with sensors to monitor fuel levels, ambient temperature in the truck and so on.
Bhatkal said most of Deccan 360’s trucks are equipped with GPS. “We know where our trucks are, are they moving, in what direction, have they stopped, for how long, are they moving and stopping in authorized ways, etc.,” he added.
GPS technology is yet to gain prominence in the logistics industry. Ravi Jakhar, who has held senior positions in the industry and has now moved on to set up an investment advisory firm, said service providers still hesitate to invest in technology as payback periods may be in the 18-24 month range.
An information technology (IT) layer is a crucial component in logistics. Several logistics companies bypass off-the-shelf technologies and go to IT firms for products tailored to their needs.
Deccan 360’s express delivery system is parked with Bangalore’s MindTree Ltd. Its back-end data centre is powered by 14 Sun Solaris servers with service area network storage, and serviced by HCL Technologies Ltd in New Delhi.
Virtual networks are used for getting more out of servers, lowering costs. Interactive customer options, either via phones or the Web, completes the picture in terms of tracking information, rate calculation and the like.
Logistics firms will eventually look at portable devices at the pick-up and delivery-end for invoicing, proof of delivery and so on, say experts. This, integrated with the overall system, will provide remote managers with that holy grail of logistics management—end-to-end visibility and control.