Tuesday, February 21, 2012

Real-time shipment tracking, an innovative future of Supply Chain Management

While I was reading the case study “Zappos.com: Developing a Supply Chain to deliver WOW!” from Stanford Graduate School of Business, I was really interested in the situation described that Zappos used “The Drop-Ship Model” and did not know when a customer order had been shipped until the customer was unhappy and called to inquire about the order. I suddenly recalled a opposite situation when I ordered an iPhone 4S from Apple Store, there was a function called “Tracking your order” that helped me to view exactly where my “precious” item was and so did Apple.
I immediately looked back at my email inbox and found the site that allowed me to track where my iPhone was during its shipping period.

Screen-shot of Apple’s Track Shipment Function

It brought me an impression that the real-time tracking shipment system would be the future of Supply Chain Management. I decided to go further and researched about real-time tracking shipment system.

Benefits of Real-time Tracking System
  • In my point of view, real-time tracking system is a secure technology that allows a company to locate exactly where its assets are at any point of time the assets being shipped. It definitely increases the efficiency of the Supply Chain process since the scheduling plan will be much more accurate.
  • Secondly, when the company shares the information with its customer, the customer will have a visual look where his/her goods are being shipped. Thus, the brand of the company will be more reliable. In my case, I sometimes ordered Protetin powder from GNC’s website; the company just indicated that the shipment would be delivered by 4 business working days. It made me feel uneasy day by day when I did not see my goods until the day it reached. In the other hand, Apple provided me a tracking function that I can see exactly where my iPhone 4S were at any time I opened the website.
  • Furthermore, with my research, I realized that industry analysts are increasingly emphasizing the need for technology that lowers operating costs and protects assets. Mr Michael Fauscette, Software Business Solutions Group Vice President at IDC, a global provider of marketing intelligence and advisory services for the IT industry, said:
Sense and respond solutions, particularly those that incorporate mobile technologies to track and take action on high value assets, are getting a lot of attention from large companies in these highly competitive and uncertain economic times
History of Real-time Tracking System
Tracking and monitoring of shipping containers came in focus after 9/11. Many companies saw an opportunity and started ambitious container tracking projects. However, neither the technology nor the market was ready at the time. Today, mobile and satellite networks can provide ubiquitous online connectivity at a reasonable cost and mobile computing and sensor technology delivers high performance, as well as excellent usability. All of these components which are combined enable the delivery of supply chain management, security management and operations management applications linking containers and enterprise IT systems.

Real-time Tracking System will be competitive advantage in near future
Today, more than 80 percent of international trade goods are carried by sea. At the end of 2011, there were approximately 20 million cargo containers worldwide, the equivalent of 30 million TEUs. Berg Insight is of the opinion that the market for shipping container tracking solutions has entered a growth period that will last for several years to come. The number of tracking systems with GPRS or satellite communication for intermodal containers in active use is forecasted to grow at a compound annual growth rate of 66.9 percent from 77,000 units at the end of 2011 to 1.0 million by 2016. The penetration rate of remote tracking systems in the total population of intermodal containers is estimated to increase from 0.4 percent in 2011 to 3.6 percent in 2016. (Based on Press Release of PR Newswire). Aftermarket solutions mounted on high value cargo and refrigerated containers will be the first used cases to adopt container tracking.

Recently, on 30th January 2012, Business Wire has a press release that announced the launch of Savi Mobile Tracking System ™, advanced technology identifies and tracks in real-time the location, movement and condition of high-value assets. The system supports a wide range of "tag" technologies including GPS, GPRS, RFID, and satellite communications that provide in-transit visibility and real-time asset management for greater accuracy in location and movement tracking.

Savi Mobile Tracking System’s GUI

And also, in Holland, a regional shipping company has just announced a new mobile app to provide customers with on-the-go access to real-time shipment tracking. The free app is available on iOS and Android platforms, which are used by most of the mobile smart phone users.

Free app to track shipment in real-time

In conclusion, my prediction would see that the Real-time Tracking system will play an important role for any company which are providing delivery/ shipment service. Not only the expensive item like the iPhone 4S, but also the cheaper item such as clothes, supplement powder, electric equipment, etc… would be integrated with the new system with the assumption that the technology would become cheaper in the future that every company would afford to use it to add value for its customers or create competitive advantage.
Do you agree?

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