New sensors help reduce supply chain risks

Sensors help companies react faster and reduce risk

Better sensors help companies reduce shipping risks and react faster to disruptions, but costs and deployment challenges are still slowing adoption.

According to a Capgemini Consulting survey released last week of 337 executives from large global manufacturing and retail organizations, only 15 percent said that the majority of data from the extended supply chain is accessible to their organization. In five years, that number jumps to 54 percent.

And 94 percent said that they see supply chain visibility tools as the biggest technology enablers.

Meanwhile, another report released last week by Deloitte and MHI, shows that sensors and automatic identification tools are used by 44 percent of respondents, with 87 percent saying they would be using them within six or more years.

Cloud computing and storage also ranked high, with 86 percent saying that they would be expanding their use for the supply chain.

However, 43 percent of survey respondents said the main barrier to investment was the lack of a clear business case.

Other barriers to adoption included a lack of talent to deploy the technologies, identified by 38 percent of respondents and a cultural aversion to risk, selected by 35 percent.

Recent innovations in sensor technology might make the transition easier, however.

For example, RFID tags, which rely on short-distance radio signals, are being replaced by sensors that communicate via public communication platforms, not just WiFi but also satellite and cell phone networks.

And there are vendors that gather all the information on behalf of manufacturing and retail clients, and offer analytics and other management tools via simple cloud-based interfaces.

"We are both a hardware and software company," said Jim Hayden, vice president of solutions at Savi Technology, one sensor vendor that began working with the military 26 years ago but recently expanded to serve business customers as well.

"The commercial sector is now interested in tracking these things and the technology is there for them to do it," he said.

For example, a container shipped across an ocean, or trucked across a desert, can send out real-time data about its location via a mobile signal when within range, and via satellite otherwise.

[ ALSO: Business continuity and disaster recovery planning: The basics ]

And it's not just location, he added. Sensors can be used to monitor for sudden shocks, to report temperature readings, to spot changes in lighting or humidity or notice motion. A sensor can send out a signal when a wire or fiber-optic cable is cut.

The data can then be used to improve decisions, he said.

"If you track enough shipments, you can predict times of arrival," he said. "And you can get patterns of crime. Criminals will often look for areas with no wireless reception, such as at a particular mountain curve, and hold up trucks in those areas. If you know where those areas are, you can switch your sensors to communicate by satellite."

The data can also be used to reduce damage to shipments. For example, if a shipment at a particular border crossing often overheats, that could be a sign that something is wrong there.

"So, from now you might say, 'Don't go to that border during busy times, so you're less likely to sit in traffic and less likely to have high temperature readings,'" Hayden said.

If damage has occurred, say, from a sudden shock to sensitive electronic equipment, the sensor data can identify exactly when it happened -- and which shipping company was responsible.

"Shock is important in a lot of industries," he said. "The damage can be up to millions of dollars, and customers usually didn't know when it was happening."

Hayden admitted that the technology can still be on the expensive side.

The high-end sensors, for example, can cost hundreds of dollars each, he said.

"That's a barrier to deployment sometimes," he said. But even the most expensive sensors have their uses, such as in protecting shipments of pharmaceuticals or engineering prototypes.

Despite the high price tag, the costs are falling.

"The way the sensors market is heading right now, the sensors are more powerful, with longer-lasting batteries, and cheaper," he said.

There are also ways to reduce costs, such as using inexpensive RFID sensors to gather information and communicate with a master sensor, which then, in turn, uploads the data to the cloud.

Some warehouses are even using drones, he said, to fly around and collect inventory data from RFID sensors.

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