Tom Napier, right, claims the use of bar code scanning is the quickest, most efficient was to get information from the outside world into a computer. The senior systems salesperson at Automation Associates Inc. convinced customer Doug Nicol, left, president of Northland Fulfillment, to upgrade to a wireless warehouse management system. Nicol is pleased that doing so has enabled his third-party logistics firm to improve the accuracy, efficiency and timeliness of its service. Nicol reports that the subsequent cost reductions to date lead him to anticipate a return on investment within 12 months. See full story on page 14.

 

Automating data collection
By Susan Maclean, IT Focus

(September 2002 Cover Feature http://www.itworldcanada.com/itwPrint/)

 

Northland Fulfillment is a third-party logistics firm serving conventional and direct response retailers, shipping merchandise either directly to the consumer's home or to mass merchandisers. In the past 12 months they shipped about 100,000 parcels to direct response consumers in Canada. Knowing where their inventories are and that they can ship product right away is the major benefit of the wireless warehouse management system implemented this spring at the Toronto-based firm.

Northland can process orders from a wide variety of mediums: e-commerce, direct response, loyalty and reward programs, catalogue or syndication. But until Mississauga, Ont.-based Automation Associates Inc. installed their RF Pathways warehouse management system, Northland’s staff of nine full-time and up to 20 part-time struggled with a manual process.

“Because things were manually received, that receiver might not come up (to the office) for a couple of hours and then (that information) not get keyed for a couple of hours, so something that might have been rushed might not have gone out that day when it really could have,” elaborates Northland president Doug Nicol. “Or, it could have gone in the morning, but it (went) in the afternoon.

“The old process was so labour-intensive in terms of paper that had to go all over the place and the keying was just so difficult, the day we turned (the automated warehouse system) on, we realized half that person’s time in savings. Day one. The person who released orders to the floor had better information and could make quicker decisions on what orders to send to the floor in the morning as opposed to waiting for things to come in throughout the day. Between knowing (the inventory) now real-time and saving a half-person’s (workload) right off the bat, that was gold for us,” he adds.

Now with everything coming in bar coded, picked by bar code and shipped by bar code, Nicol finds the new system has allowed them to put product away properly in the warehouse with like product together. It allows them to use all the bin locations because it prompts the user to put the product into appropriate sized bins to maximize cubic space in the warehouse.

“Receiving and shipping is all real-time now so the guys would get it at the back, they’d scan it and we could ship it immediately – (even) if an order could pop out of the system after it was put away,” he says.

One year projected ROI
Nicol expects their software will be paid for within 12 months or 18 months at the outside.

“It’s all the other intangibles that go with it,” he adds. “Our customers can call me and say ‘have we received the product yet?’ and I can go on my computer and say ‘yes!’ It’s intangibles like that. It gives goodwill to your customers – ‘hey, these guys know what they’re doing! They can tell me that it came in 10 minutes ago by such and such a carrier!’”

There’s more. Nicol wants to put the information on Northland’s Web site so customers can access the information real-time and let them make their decisions. “It’s their information; why should we hide it from them? Instead of our customer phoning and asking me if that product came in, they could go online and see: ‘hey, yea, that came in at 10 o’clock this morning.’ Or, ‘did that order go out the door?’ Or, ‘what is my inventory position?’

“That’s our next stage,” he continues. “We’ve got a rudimentary piece of software written for it now. We haven’t implemented it yet because we haven’t found a way to host it yet in our house with firewalls and all that. It’s more the security issue as to why we haven’t done that.”

He hopes that second stage will be implemented by Christmas.

The RF Pathways warehouse management system installed by Automation Associates is based on wireless LAN technology and data collection hardware. It is used by manufacturing, distribution and third party logistics companies throughout North America.

Automation Associates is a business partner of Symbol Technologies, Inc., customizing and installing radio frequency (RF) technology and batch technology from vehicle mount terminals down to PDAs. Users collect data and, instead of having to keypunch it in, hot sync it to their computer and manipulate their data however they want.

Timely, accurate information

“Using bar code scanning is the quickest, most efficient way to get information from the outside world into a computer,” says Tom Napier, senior systems salesperson at Automation Associates.  “Using the RF technology, it is instant; it is also accurate.

“I don’t understand companies – especially companies that have a very strong IT – that still aren’t into the automatic data collection,” he muses. “They will have their Web site looking fantastic but when it comes time to ask them ‘how about your inventory? How about your work in process? Is that all bar coded?’ They’ll answer ‘no’. You’ll wonder why because there is so much time, duplication of effort, audit trail. Inefficient inventory is very, very expensive to a company.

“I can point you to very large companies who still aren’t bar coded and still aren’t using wireless technology,” he continues. “Some people are even using walkie talkies, saying ‘I’m taking this SKU and I’m putting it here.’ The thing is, you’ve involved two people instead of just one, (yet) they claim it is too expensive for them.”

He estimates that his company’s surge-protected, wood-mounted, NEMA 12-coated access points range from $1,500 to $2,500 each, “depending on the amount of work we put into it.” Terminals can vary from  $2,700 to $4,500 for handhelds to more than $10,000 for truck mounted devices. Terminals that can scan a reflective label from over 30 feet are more expensive than one that scans standard range. The cost of the device also depends on the terminal's operating system and configuration. Plus there’s the cost of clients, spare batteries and chargers for the handheld terminals. Still, he claims Northland’s expected payback of 12 to 18 months is typical.

Linking with ERP
Getting timely information accurately into the ERP application is probably the biggest challenge when done manually, Napier stresses. The purpose of placing a front end automatic identification and data collection wireless LAN system into a warehouse or production area is to increase the efficiency of information exchange, he explains. “Even if an incorrect product somehow sneaks through the system, there is an audit trail as each step is scanned and therefore the transaction resides somewhere in the system with a time stamp.”

He reports that his company installs both the RF Pathways WMS, Middleware and direct connects to existing systems (usually on the AS400 or UNIX systems) using telnet clients. In August, it announced its RF Pathways Link 5.0 obtained certified integration to SAP R/3 Ver. 4.0, 4.5 and 4.6.

Whether single or multiple production lines or modular manufacturing, manufacturers can use RF technology in the warehouse or in manufacturing to get the data up to the system so it is visible. “This is the whole idea,” stresses Napier. “As soon as the incident happens, the transaction is visible. If I have finished building a part, I either push a button, scan a bar code or I enter a code that sends that widget on its way to the next destination and I am able to receive the next one as it comes in. I get a clearer understanding as to my job costing because I have a true indication as to how much time has been spent at that particular station on that particular widget.

In the case of a warehouse within a manufacturing facility, inventory visibility for raw material, finished goods and subassembly material is required for the ERP systems to be effective. RF LAN scanning instantly populates the database and moves into the ERP, Napier explains.

“I’ve eliminated the data entry by the data entry clerk. The other thing I’ve done is I’m getting the information with no time lag and there is no duplication of effort as it enters into the nerve centre of the ERP system.”

Symbol developed a unique two megabit (Mb) frequency hopping system which Napier says is fast enough for companies transmitting small time packets such as directing someone on the warehouse floor. If it is being used to send GUIs, then he recommends the faster 11Mb (802.11b) systems.

Keeping snoops out

Although Napier claims that packets of bar coded information would look like jargon to anybody else, he agrees security is important and quickly points out advantages with 2Mb systems. Hackers have 11Mb radios but they don’t tend to have the slightly older 2Mb technology, he says. The 2Mb has standard wired equivalent privacy (WEP) encryption which is designed to provide the same level of security that is available in wireline networks. It also has a feature with all devices that communicate with radio: a message authentication code (MAC) address. This is a specific sequence of numbers unique to each device. The MAC address is transferred in very short packets and for hackers to capture that would be very difficult, he says.

He also recommends a secure firewall. While the key benefit of automated data collection is its direct connect to a company’s ERP system, he advises keeping the wireless LAN on a different network than the financial and other corporate data by using a different Internet card so hackers can’t drill through. The bar code scanning data collected on that completely separate network can be copied via an open database connectivity (ODBC) transfer through the two networks.

Bar code numbering update

Napier dismisses some recent warnings that havoc will stem from the addition of a digit to the 12-digit Universal Product Codes (UPC) codes. He says that bar code scanners typically can scan many bar codes, including the 13-digit European Article Number (EAN) and the many digits on fresh meat packages.

Retail companies often carry products from all over the world, some being from European manufacturers that don't have UPC listings

He admits that the stock keeping unit (SKU) bar code field in the database will need to be changed, noting that usually only one SKU bar code is set up in one database field. He suggests a database could be configured to allow two (UPC and EAN) bar codes to be entered by adding an extra field, or the database bar code field changed, or a new SKU assigned for that new EAN bar code.

If the EAN-13 products are set up as new products in the database, the switch over should be relatively seamless, he adds. He recommends that manufacturers of retail products move soon to get their EAN number(s) listed so that when retailers make “the big switch,” they will be ready. He says that most, if not all, label formatting software will support the EAN-13.

“The only havoc that I can see (is with) the manufacturers that try to resist the changeover. If they are already selling product over in Europe, then they have to have an EAN number. They could use the same EAN number for North America. It’s not a process that’s going to cause havoc like Y2K.”

There’s certainly no havoc now at Northland Fulfillment. The firm uses four scanner terminals (guns) and two access points at their 40,000 sq. ft. warehouse. Napier cites the rule of thumb for RF coverage as about 250,000 sq. ft. or a 200 ft. radius from one access point. Energy absorption products such as paper and water reduce that while steel would increase it.

“Very, very seldom do we like to put in one access point because should it ever fail, it’s just like the power’s gone off,” Napier says. “And as soon as you’ve used this technology, you don’t want to go back.”

 

 

Footnote:

 

 

Contact:

Northland Fulfillment

Tel: 416-665-0005 x221

                                                                     E-mail: Dougn@on.aibn.com

Web: www.Northlandfulfillment.com