MHI Solutions Improving Supply Chain Performance
Transforming Last Mile Delivery with Real-Time Visibility, Technology and Data Integration
In supply chain, perhaps no question is asked more often than “where’s my stuff?” From ocean freight aboard transport ships, ports and inbound logistics via rail or tractor trailer, to receiving at the warehouse or distribution center for crossdocking or put away into stored inventory, to brick-and-mortar store replenishment and order fulfillment via parcel carrier, to last mile delivery of individual packages, achieving visibility and transparency is the brass ring all stakeholders want to grab.
Herein lies the promise of real-time location systems (RTLS). Myriad devices connect wirelessly to shared data that helps various technologies pinpoint an item, case, pallet, cargo container or vehicle’s geospatial position—all synthesized (and, optimally, synchronized) by software that can be accessed by anyone seeking the answer to “where’s my stuff?”
It sounds simple, and yet it’s anything but, said Bart De Muynck, a supply chain thought leader with more than 30 years of experience, including as a vice president and industry analyst at Gartner and most recently as the chief industry officer at supply chain visibility platform project44. He noted that, as retailers of all sizes compete for consumers’ attention and loyalty by enhancing the customer service experience, last mile transparency has become critical.
“There are so many options for purchasing and order fulfillment today: buy online from a retailer and receive a shipment at home that comes directly from the manufacturer, the distribution center or a retail store outlet, or pickup in store or curbside. Managing last mile has become so much more complex than it was even a decade ago,” he noted. “Not only are parcels being shipped, but also many more big, bulky items are being bought online and delivered last mile.”
Those complexities include a variety of issues, such as higher order volumes and limited fulfillment and parcel handling labor capacity; higher carrier shipping rates inflated by additional surcharges during peak seasons; delayed service levels that may extend from a two-day delivery to three or four days thanks to a lack of warehouse and transportation capacity; or the need for a recipient to be home to open the door for a large item delivery.
“If things go wrong in the last mile and the customer isn’t going to receive their item in the promised timeframe, what can you offer them? Information about the shipment and updates about its progress—or even better, choices about any changes they would like to make about the delivery time or location,” De Muynck said. “Having visibility in real time about an item’s location is crucial to support this. Because a lot of times, when customers have a bad experience with a retailer, they probably don’t give them a second chance.
It’s also not possible to ensure a flawless last mile delivery without upstream visibility, he continued. “You can’t ship something last mile if you don’t have the product to begin with,” De Muynck observed. “Operations are turning to a variety of RTLS solutions to support better inventory visibility throughout their supply chain.”
RTLS Technologies Aren’t One Size Fits All
There are several different RTLS technologies in the market, each offering different degrees of location precision at a variety of different price points. While none are necessarily new, many of them are increasingly being deployed as technology costs come down and the need to execute last mile deliveries more efficiently and at higher service levels rises.
One such technology is radio frequency identification (RFID). This technology is ideal for tracking the movement of merchandise or mobile assets within a short range. Passive RFID systems track RFID tags, which emit radio signals detected by handheld reader devices, or fixed readers stationed at specific gateway points.
“RFID is the overnight sensation 20 years in the making,” chuckled Andre Luecht, global strategy lead for transportation, logistics and warehouse at MHI member Zebra Technologies, a digital solution provider that enables businesses to intelligently connect data, assets and people. “It’s been used for years in the distribution and tracking of high-value items, such as pharmaceuticals and electronics. But only recently has it begun making inroads into last mile applications as the costs of the tags and the reader systems have come down significantly.”
The findings of Zebra’s 2023 Global Warehousing Study offer confirmation of this trend. In it, 58% of supply chain decision makers reported plans to deploy passive RFID by 2028 as a means to help increase inventory visibility. While the value of the commodity often still drives the decision about what unit level gets tagged—pallet, gaylord, wire transport cage, individual item or parcel—the need for the increased inventory accuracy and asset traceability RFID provides is increasingly being driven by last mile expectations. Regulatory and retail mandates are also speeding up implementations, he added.
“In the perishables space, the Food Safety Modernization Act (FSMA) Section 204 from the U.S. Food and Drug Administration is increasing the documentation requirements for tracking of consumables. In these applications, we’re also seeing humidity and temperature sensing capabilities added to the RFID tracking,” Luecht said. “There are also more and more retailer mandates for RFID tags to help them track inbound deliveries. Finally, manufacturers are increasingly adding tags to finished goods as an automated process, which has brought the costs down. All this has created fertile ground for the increased adoption of passive RFID.”
Indeed, even parcel carrier UPS has announced deployments of RFID tags, placing them on both packages and devices worn by employees as part of its Smart Package Initiative. The carrier says the tags eliminate as many as 20 million manual scans a day, which in turn reduces the risk of errors when loading parcels onto trailers and last mile delivery vans. The RFID system is also expected to accelerate delivery through UPS’ facilities.
Luecht noted that RFID allows stakeholders—retailers, shippers, carriers and recipients among them—to verify that a last mile parcel made it on to the correct vehicle. The tags also allow each package to be quickly located on the back of a delivery truck by a driver with a handheld device.
“Not only does that save seconds per delivery—which could provide the opportunity to add another stop at the end—but it also generates data that can support recipient tracking and help providers identify bottlenecks in their last mile delivery process,” he said.
“Passive RFID isn’t new, but it is going to be disruptive because it captures data automatically and independent of labor in the warehouse or last mile,” Luecht continued. “Using RFID disconnects data capture from a person’s workflow. That is a highly sought after capability that makes it very attractive for retailers and shippers.”
Bill Poulsen agreed. Poulsen is executive director of internet of things (IoT) and engineering at MHI member RMS Omega Technologies, a system integrator that designs and deploys strategic tracking and automation solutions. Nearly 20 years after Walmart issued its RFID mandate, the technology has finally begun to deliver on its promise, he said.
“From a retailer’s perspective, RFID helps with inbound deliveries and yard management. They want to know when something is on its way and when it’s going to get to their warehouse or store,” he explained. “Having visibility about whether a truck will be arriving early or late allows them to reallocate their resources to handle unloading.”
A variety of other RTLS technologies are also being used throughout supply chains to enhance inventory visibility and bolster last mile efficiencies, Poulsen added.
“Inside the four walls, we’re seeing some operations deploying ultra-wideband (UWB). This is a technology that is used on high-value items that need to be tracked extremely precisely, literally within a couple of centimeters of its location—including how high up in the racking it is,” he explained. “It’s also one of the costliest solutions, with tags between $25 and $50 each, and requires an expensive infrastructure. But for exceptionally expensive items, UWB can be a fit.”
Outside the four walls, Poulsen continued, global positioning systems (GPS) have become virtually ubiquitous as an RTLS technology for last mile. Used for geolocation tracking of vehicles and equipment operated outdoors, GPS technology uses the Global Navigation Satellite System (GNSS) network. This space-based navigation system tracks positioning, navigation and timing of satellites to detect the movement of vehicles or devices—such as mobile phones or tablets—equipped with GPS receivers. Considered a medium-cost technology, it provides real-time tracking within a few meters and only works outside of buildings.
“GPS automatically determines the location of a device carried by a delivery driver, documents it and transmits that data to the overarching tracking software,” he explained.
Likewise, Poulsen has seen some delivery vehicles equipped with Bluetooth low-energy (BLE) gateways or hubs that receive signals from Bluetooth beacons. “The beacons are typically applied to a reusable pallet or container in a closed loop system because at $15 to $20 apiece you don’t want to throw them away. But they are another RTLS solution that is seeing some use in last mile applications.”
Barcodes, both 1D and 2D, are another an important part of today’s RTLS-enabled visibility, added Luecht. He reported increased interest in fixed industrial scanning, making it the second most popular technology for near-term planned investments in Zebra’s Global Warehousing Study.
“These are either barcode readers or vision cameras that provide optical character recognition (OCR)—or combinations of the two—installed overhead so that workers can quickly scan packages while retaining use of both hands,” he said. Because associates don’t have to constantly pick up and put down a handheld scanner, productivity goes up. “It’s just another means to capture data, which makes it easier to optimize your processes in the last mile.”