Wireless Does Have Real ROI in the Supply Chain

Special-function wireless devices have the potential to deconstruct the desktop-centric workflow models so common in companies and their supporting supply chains. The receiving process at a warehouse, for example, may involve keying bills of lading into a desktop PC before the material moves to the production lines. Similar desktop detours?and the related breaks in workflow?exist in most functions within companies. These breaks provide an opportunity for specialized wireless devices that focus on narrow functions with limited features. Companies can aim such devices at facilitating the natural flow of goods and services within a company and its supply chain?making them the next evolutionary wireless trend.

Unfortunately, given competing WAP standards and general flux in the industry, most IT executives are confused when it comes to acquiring and utilizing the new technologies. Questions abound. Is Bluetooth still an option? What about 802.11b protocol? Will the Palm OS become a de facto wireless standard? All of those uncertainties muddy the waters.

Rather than waiting for things to clear, however, I recommend that organizations make decisions regarding wireless technology devices based solely on the cost-benefit analysis, without worrying about long-range, enterprise-scale planning. The typical special-purpose wireless device is going to see a lot of wear and tear over its lifetime. It will need to be replaced periodically; typical cellular users replace their phones every 1.2 years, for example. During these replacement periods, companies can upgrade to the latest and greatest underlying wireless technology.

There is precedent for this approach. Companies that have successfully utilized wireless technologies have realized immediate reduction in cost of goods as well as general administrative expenses. And in tough economic times, those are the only two items that remain under a company’s control. Consider the example of an innovative car rental company. The parking lot attendant cuts cycle time by checking in the car and printing a receipt with a wireless device. That puts a smile on the customer’s face, as she hurries to the airport. It is these small but effective and innovative uses that wireless technologies can capitalize on. Moreover, the company’s existing car-return process receives minimal impact, thus improving the chances of a successful technology implementation. And it is much easier to keep the scope focused when dealing with special-purpose devices with limited functionality.

The biggest challenge to cost-effectively using wireless devices within a company and its supply chain is the relatively small size of the business benefit. For example, the business benefits in terms of productivity gains, cycle time or inventory turnover will be limited in comparison to the potential benefits from implementing a CRM, ERP or SCM packaged application. Moreover, benefits from these devices may be limited to a particular function within a department.

This relatively small savings potential makes specialized wireless applications unattractive candidates for CIOs, who tend to focus on the enterprise perspective. Yet specialized wireless devices can drive out inefficiencies within an organization and its supply chain while minimizing implementation risk. Given that, IT executives need to think about going for base hits instead of home runs. We have already seen the general disillusionment with the IT function increasing during the past few years. It may be time to lower our sights and focus on technologies that can be implemented in months, not years, and can demonstrate an immediate return on investment.