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Part 6: Improving Logistics

When coupled with other wireless technologies, RFID can secure cargo, improve visibility and lower the cost of moving goods.
Nov 18, 2002—Nov. 18, 2002 - Some senior supply chain executives refer to logistics as "the Black Hole." They closely monitor what's being produced in their factories and what's stored in their warehouses and distribution centers, but when goods leave those physical locations, visibility is completely lost. This contributes to supply chain theft, causes revenue losses due to out of stocks and swells inventory unnecessarily because no one knows if a delivery is going to arrive on time.


Needles in a haystack
RFID has the potential to dramatically improve in-transit visibility, when it is coupled with other wireless technologies, including cellular and global positioning system (GPS) tracking. These technologies can not only tell you where your goods are at any moment in time, they can improve vehicle utilization, ensure the timely delivery of goods, and slash supply chain losses.

In most of the sections of this special report, we focus primarily on passive RFID technology – that is, low-cost tags and labels that don't use batteries to broadcast a signal. But logistics has some special requirements that can't be handled with passive tags alone. In this section of the report, we'll spell out how you can get complete item-level visibility of goods in-transit using passive and active tags with cellular and GPS technologies. And then we'll explain how sensors can be added to the system and how software will eventually respond automatically to disruptions.

The basic technologies needed to track goods in transit have been around for a while. GPS is used to plot the precise location and speed of the truck, and then cellular technology is used to relay the information to a central monitoring station. The data can be made available over the Web or plugged into enterprise applications (after doing the software integration).

Such systems used to be too expensive to outfit an entire fleet. When Qualcomm first introduced its OmniTRACS system, it cost upwards of $5,000 to outfit a single truck. Today, a low-end system can cost less than $500, plus $10 to $60 per month, depending on how often you want the vehicle to report its position. (Pricing is often based on the number of transmissions.)

These systems are not uncommon, but very few companies have combined them with RFID to get item- or case-level visibility in transit. Marrying the two systems can provide enormous benefits.
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