Companies test wireless supply chain technology

Aircraft parts distributor Aviall Inc. is cautiously spreading its supply chain wings by using wireless technology in an effort to speed up the way its sales force tracks product inventories at the company’s customers.

The need for real-time, accurate inventory data is prodding Aviall and a number of other companies to turn to handheld devices for supply chain uses. But despite the fact that mobile technology has been around for years, analysts said its inclusion in supply chain applications is just beginning to catch on.

“Is it a trend? Maybe the beginning of one, but it looks like the wireless environment is embryonic,” said Scott Stephens, chief technology officer at Supply Chain Council Inc., a cross-industry consortium in Pittsburgh.

Dallas-based Aviall doesn’t plan to rush things, according to CIO Joe Lacik. He said the US$500 million company this month launched a wireless technology pilot project that uses devices from Symbol Technologies Inc. in Holtsville, N.Y., to automate the inventory replenishment process in customer warehouses.

Currently, Aviall salespeople go from bin to bin in warehouses and manually check stock levels to determine how many parts need to be reordered. With the new system, Lacik said, salespeople can scan bar-code labels on the bins and tell immediately if they need refilling. All the data is instantly uploaded via the Web to Aviall’s back-end replenishment and enterprise resource planning systems, he added.

Larger customers eventually will be able to do the scanning themselves, potentially saving Aviall as much as $1 million a year in time and manpower costs, Lacik said. “That’s the tangible dollars and cents,” he said. “The intangible part is the statement we are making to our customers [that] we are continually finding better ways to service them.”

Using wireless devices is helping Nicor Gas, a Naperville, Ill.-based natural gas distribution company owned by Nicor Inc., ensure that its warehouse personnel stick to specified operating procedures. Nicor Gas went live this month with a radio frequency-based system using devices from TS-Tek Inc. in Lakewood, Colo.

“The system gives us discipline in the overall materials-handling processes,” said Pat Loftus, a regional maintenance manager at Nicor Gas. Workers use bar-code scanners to automate the generation of purchase orders and the documents needed to send and receive goods, according to Loftus.

The device beeps if inventory items are scanned improperly or placed in the wrong bin, he said. The data is then fed immediately into Nicor’s back-office systems, ensuring that the company has current and valid information about its stock levels. Previously, it could take two to three days to determine the status of a piece of inventory.

Nicor Gas can also do widespread checks on inventory levels during a single business day, something that previously ate up three to four days and required overtime pay for the company’s workers. The wireless system cost less than $100,000 and should pay for itself within a year, Loftus said.

Hunt Corp., a Philadelphia-based maker and distributor of office supplies, is also considering installing wireless technology within its supply chain operations. Wireless devices could offer a faster and more reliable means of communications with customers and business partners than hard-wired Internet or electronic data interchange methods do, said Ted Raiman, a supply chain director at Hunt.