Reaping the Rewards
Mobile and wireless applications are proving to be hot technologies in the consumer goods industry. Two manufacturers -- Farnam Companies Inc., and Osram Sylvania -- for example, are reaping substantial rewards in order-picking error reduction and 24-hour management of customer orders.
Chomping at the Bit
When Universal Pictures needed props for "Seabiscuit", it turned to the Horse Products division of Farnam Companies Inc. Farnam furnished period items for the film and subsequently partnered with Universal for a joint promotion at 4,000 retail stores nationwide.
It's no wonder Farnam was in the winner's circle with "Seabiscuit." Farnam is one of the nation's leaders in the animal health industry, filling 40,000 orders a year for 2 million case shipments annually. Products are sold across North America in feed, tack and garden shops, and at pet-food chains such as PETsMart and PETCO, and mass merchandisers such as Wal-Mart and Target. The privately held firm has yearly sales ranging from $100 million to $200 million.
John Williams, chief operations officer at Farnam says his company is using mobile and wireless technology for manufacturing reporting, inventory management, and order picking. To help manage explosive growth, it has transformed its warehouse operation with a completely automated wireless data-collection and validation system.
Completing the Pass
Implemented in December of 2002, the new system uses Intermec hardware and Acsis Inc.'s DataPass software for mobile data-collection in the SAP environment via radio-frequency (RF) and bar code technology. DataPass enables Farnam to improve accuracy as it retrieves, validates and inputs warehouse and production data.
Acsis is a leading provider of systems that collect and aggregate supply-chain data for companies using SAP's ERP software. Williams says Acsis was chosen primarily because of the technology vendor's ability to provide consulting services, as well as its understanding of SAP.
"The Acsis people spent time with us, so we didn't overlook anything during implementation," says Williams. "Acsis was also helpful during the post-implementation period, which went a long way toward making the project a tremendous success."
The new system includes a bar coded "license plate" on all pallets. The plate carries a wealth of information, including item number, item description, quantity, location, quality and lot or batch number. As the pallet moves, it's scanned and the information is updated.
"Our three key issues are a need for real-time information, a need for accurate information and a need to reduce the time it takes to process that information," says Williams. "Wireless data collection enables us to deal with these three issues."
Vast Improvement
The new system has improved order-data accuracy from 92 to 98 percent, and order-picking errors have been reduced by 50 percent. Improved knowledge of inventory has enabled the company to avoid overstocking while reducing out-of-stocks, which enhances customer service. Williams believes the future of mobile and wireless technology will include better communication between the plant or DC and back-office applications via handheld devices. He also looks forward to seeing improved voice-recognition technology that can be combined with wireless applications for warehouse and DC use.
A Bright Idea
"We use a substantial amount of mobile/wireless functionality in the Osram Sylvania business," says Dennis Pedley, supply chain systems manager at Osram Sylvania. "We use RF scanning devices to read bar codes from receiving goods to manufacturing transactions to the shipping of product to customers."
Osram Sylvania manufactures and markets a wide range of lighting products (see photo at left.) and uses RF equipment from LXE Inc.
"We have found their products to be rugged and very dependable," says Pedley.
Within its manufacturing plants the company uses DataPass software from Acsis Inc., and the system is integrated with the company's SAP ERP package. Osram Sylvania has established a two-way communication between SAP and DataPass that allows master data to be sent to the manufacturing sites' computers. Inventory transactions are then scanned with RF equipment, are validated using the master data, and are transmitted to the SAP system. The warehouses also use a third-party system, from Robocom Systems, that utilizes LXE equipment and provides a two-way communication to SAP.
Delivering Assistance
Catalyst International assists Osram Sylvania with implementation, hardware, security, and wireless (SAP Console) transactions. Catalyst delivers assistance through its Catalyst Consulting Services business unit, a leading provider of services for SAP applications. The company also uses mobile and wireless systems in its DCs.
"Our distribution centers also use bar code labels for receiving product, performing warehouse operations, and shipping product to our customers," says Pedley. The company is currently converting its warehousing system to SAP, in order to capitalize on a more integrated technology.
Future Trends
Pedley believes the future trends for wireless and mobile technology include the ability to communicate with offshore manufacturers, suppliers, customs offices and transportation companies.
Pedley states, "The use of RFID, wireless and Internet solutions will continue to improve the global management of the industry."