analyst, Gartner Inc.

The need to improve materials handling, inventory management and asset management processes is driving use of wireless technologies in the manufacturing sector. But cost and complexity are keeping the pace of adoption slow, experts say.

“Companies are recognizing that this is a viable technology, and what they are trying to do is look at it a little more strategically and understand how it can work in different parts of their business,” says Dennis Gaughan, an analyst at AMR Research Inc. in Boston.

An October study of 933 U.S. and Canadian companies by IDC showed that about 53 percent of process manufacturers and 39 percent of discrete manufacturing companies have already implemented some wireless and mobile technologies. This included technologies such as laptop computers, Pocket PC- and Palm OS-based handheld devices, smart phones and specialized industry-specific tools.When you consider warehouse applications, manufacturing companies are unquestionably the leaders in wireless use.Ken Dulaney>Text Those numbers put the manufacturing industry somewhere in the middle of the pack when it comes to wireless adoption, behind the transportation and insurance industries but ahead of the professional services and retail sectors.

As with their counterparts in other industries, manufacturing companies are increasingly using wireless technologies to improve communications and enable better access to information for corporate sales force automation and customer relationship management applications. But the real value has come from wireless use in warehouse and distribution environments and, to a lesser extent, on the shop floor, according to analysts.

Into the warhouse

Wireless-enabled radio frequency data-capture devices such as wands, scanners and imagers are used fairly widely for identifying, tracking and monitoring almost everything that moves within a manufacturing environment, says Rob Douglas, president of Psion Teklogix Inc., a Mississauga, Ontario-based vendor of such devices.

The ability to track materials is enabling more-efficient inventory management, enterprise asset management and maintenance, as well as order fulfillment and field-support operations, Douglas says.

Analysts say they expect radio frequency identification tags to add further tracking capabilities. One of the most popular applications of wireless technologies involves the use of RF devices for material handling in distribution warehouses.

“We use wireless for bar code scanning equipment, moving inventory around, cycle counting, building shipping documents as we load the truck from pick lists, receiving operations, shop floor alerts for more parts and look-up of items,” says Dennis Roell, IT manager at Betts USA Inc., a Florence, Ky.-based manufacturer of injection-molded components.

The benefits of such automation can be enormous, says Brad Barnett, chief operating officer at TaylorMade Golf Co. in Carlsbad, Calif.

TaylorMade, a wholly owned subsidiary of Adidas-Salomon AG, saw a 24 percent improvement in labor productivity in its main warehouse as a result of its decision to deploy a wireless-enabled warehouse management system. The application is based on software from Provia Software Inc. in Grand Rapids, Mich., and wireless devices from Psion PLC in London, the parent company of Psion Teklogix.

“It provides us an accuracy benefit in that we are able to know exactly where every container is in the warehouse at any given time,” Barnett says. “And it provides us with a productivity benefit in terms of the materials put-away operations.”

“When you consider warehouse applications, manufacturing companies are unquestionably the leaders in wireless use,” says Ken Dulaney, an analyst at Gartner Inc.

Environmental conditions and the presence of heavy equipment make the plant floor a less-than-ideal environment for broad wireless use, says Harry Forbes, an analyst at ARC Advisory Group Inc. in Dedham, Mass.

But the difficulty of setting up a wired network on the plant floor is making wireless an attractive option for capturing data about production-line metrics, quality control and applications for tasks such as job scheduling and asset monitoring, Gaughan says.

Automotive and aerospace companies, such as Ford Motor Co. and The Boeing Co., respectively, are big users of wireless in the manufacturing sector, as are vendors of high-tech equipment, Dulaney says.

Industry-focused software

One of the big trends surrounding wireless use in the manufacturing sector is the move away from proprietary RF devices and wireless LAN infrastructures to more standards-based ones, Gaughan says. Devices running on narrow-band 900-MHz network frequencies, a staple among manufacturers, are being replaced by Windows CE-based handhelds running on 802.11x and Wi-Fi networks.

The standardization of technologies is likely to result in more packaged wireless application software aimed at manufacturers, AMR’s Gaughan says. It will also reduce the cost and the complexity that have traditionally been linked with deployment and maintenance of wireless applications, but not entirely.

The task of integrating WLANs to back-end processes such as inventory reporting and supply chain management is still hard to do, analysts say. Technology issues include wireless signal dissipation and security. Another problem is the relative lack of knowledge about wireless technologies among many smaller suppliers, Roell says.

“For many of our suppliers, I have had to educate them, create their bar-code labels and guide them on what hardware and software will help them accommodate our bar-code needs,” he says.

Cost is a big factor as well, says Roell. “When you are dealing with high production volumes of items and profits measured in fractions of a penny per part, you get real picky how you spend,” he says.

In many cases, companies tend to look for other ways to cut costs — such as cheaper sources of raw materials — rather than invest in wireless, he says. As a result, there is a pressing need to have a clear understanding of goals, says Gaughan. “Wireless is expensive and complicated,” he says. “Where we found the most success was at companies with a real good business case.”

Related links:

Wireless works wonders for manufacturing firms

IDC reports wireless LAN market boom

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