TECHNOLOGY HELPS MANAGE SUPPLY CHAIN

Peter Perrotta

Peter Abell spends a lot of his time studying the latest technological trends in food-retailing logistics.

As the director of retail research for AMR Research, Boston, it's his job.

This week he will bring his expertise to Houston while speaking at the 2001 Productivity Convention & Exposition sponsored by Food Distributors International and in partnership with the Food Marketing Institute, the National Grocers Association and other industry organizations.

I spoke with him last week to get some insight into what is on the cutting edge in the arena he studies.

Abell started out by saying that at the show he was going to talk about smart tags and voice. Both of these subjects have received recent coverage on the pages of SN's Technology & Logistics section.

By "voice," of course, Abell is talking about the many applications of voice-activated technologies currently being adopted in the process of warehouse picking.

Smart tags are the tiny chips manufacturers are embedding in products, cases or pallets so that these items can be "tracked," if you will, as they make their way through the supply chain.

But, perhaps the least-known logistical technology Abell will let the industry know about centers around a relatively new term he calls "supply chain event management."

"Supply chain event management is the hole between the time a retailer makes out a purchase order and when it gets an advance ship notice or it arrives at the warehouse."

It's the lead-time between the ordering and the arrival of the merchandise.

"There are a lot of things that can occur in this time. You can have spoiled produce." Unexpected shipping delays can occur as well, he added.

"It becomes a visibility issue. The retailer needs to be more aware of where something is in the supply chain and what to do to prepare for it."

The technology that has made supply chain event management possible is simple -- software plus the Internet. "Now, you can get information in real time without paying for it."

At minimum there are at least 17 vendors in the food-retailing industry that can provide a retailer with the needed technology to perform supply chain event management. "It's much more readily available right now."

As an example of a practical application, a retailer who is building seasonal displays for Halloween candy, for instance, can be informed immediately, via the Internet, if the manufacturer of the displays runs into a problem due to a labor strike.

"In the past, you wouldn't know if something like that was wrong; now you can find out immediately."

The keys to supply chain event management, according to Abell, is having the newfound ability to monitor, notify, measure, control and simulate.

The measure part of the formula is particularly important.

"You can now measure the time when you will actually get the shipment."

This part of the logistics equation has been around for about two years, but it's only been in the past year when it has truly been given a name.

"A large number of chains are doing it."

The bottom line in all of this, of course, is giving food retailers a better in-stock position.

"If the retailer knows, in real time, that there is going to be a problem with a shipment, he will be better prepared to substitute [product]. The fill rate will be superior."

After all, Abell noted, having fewer out-of-stocks equals happy consumers and "that's what it is all about."