ST. LOUIS -- The ability to evaluate the potential of new technologies and implement them quickly appears to be the key to ensuring supply chain efficiency.
That was the message sent by a panel of distribution experts addressing new technologies and their implementation into the supply chain at the Productivity show held here Oct. 31 through Nov. 3.
"The Internet year is 47 days," said Greg Girard, research director for supply chain execution at AMR Research, Boston. Girard moderated the seminar titled "Emerging Technologies: Will Your Systems Support the New Food Distribution Model."
Girard said a recent warehouse management system installation, which was traditionally an 18-month to 24-month project, was completed in 28 days.
"[It was] not a sophisticated facility, but was a sophisticated system," Girard told the standing-room-only crowd, noting that the project was completed at "breakneck speed."
One panelist said that retailers and wholesalers could throw their "five-year plans" out the window.
"There is a paradigm shift going on in distribution," Girard said. "[The old model] was buy, hold, sell and the new model is sell, source and ship," he added, noting that this process was borne in part out of scan based trading.
Some of the speed of implementing new technologies to maximize distribution efficiency could come from the integration of purchased technology as opposed to developing in-house systems, according to Jack Scott, chief information officer for Certified Grocers of California, Los Angeles.
"As technology has advanced so rapidly, we have learned how to buy wisely and competitively and build the integration piece," Scott said. "We spend more time on integration [than development]," he added.
"How do you build with an 18-month window of obsolescence?" Scott asked. "To build internally is something we really have to look at. Being an integrator is far more flexible."
"We've been trying to move toward that [systems integrator] for many years," said Frank Garofolo, vice president of information systems for Holiday Companies, Bloomington, Minn.
"We don't buy because vendors are better, sometimes they're not, but they are experts in terms of function," he added.
"We want to be considered the integrators," Garofolo told attendees.
Scott cautioned that before new technology is purchased and installed certain questions must be answered, such as what is the cross functionality of the system? How does it relate to retailer/wholesaler expectations? How does it measure value?
The retailers and wholesalers seeking to buy systems as opposed to build systems are also looking at adjusting their current business model to accommodate technology into the supply chain process.
Garofolo said that when Holiday performed a review of its cross docking processes, it found it had about 8-13 different processes to accommodate certain customers.
"How much are we changing for valid variations as opposed to customer peculiar variations?" he asked, noting that the wholesaler has to look at how much it costs to accommodate its customers.
"One thing we learned is to manage from the retail perspective back," Scott said.
"[We're] looking at what we are trying to accomplish, work back and take out the complexity, instead of buying from a features perspective," he added.
"We need to look at this technology and look at its value proposition," Scott told attendees.
He added that some of the emerging technologies such as the smart cart, radio frequency identification (RFID) tags, and package ID will become more pervasive in the supermarket industry as costs for these technologies come down.
