Data accuracy, not technology improves your supply chains

Roger OakdenLogistics PlanningLeave a Comment

Too much emphasis on technology ‘solutions’.

Do you remember the hype about RFID a few years ago. Well, it is starting again with the Internet of Things; also called Machine to Machine (M2M). RFID was going to revolutionise the world of business, but didn’t and the same will likely occur with M2M.

The hype cycle identified by the Gartner Group says that the peak of inflated expectations is followed by the trough of disillusionment. With RFID, inflated expectations were centred around the retailer WalMart, who would trace your every move, based on what you bought. Disillusionment followed and you do not hear much of that objective any more.

One of many articles published about the future of M2M was from EyeforTransport and titled ‘M2M set to surpass RFID and bar-codes as a tool to gather information along supply chains’ A provocative title to gain notice; even more so that the ‘study’ was jointly written by the telecommunications company AT&T – hardly a disinterested voice!

As often happens, the technology is being promoted as the solution instead of it being the tool or vehicle by which the solution can occur. The study states that “The ability to collect accurate data in real time is a vital component of a successful supply chain. M2M technology is enabling this and allowing companies to make effective decisions. “The critical statement here is collect accurate data.

Collecting and transmitting accurate data

M2M is the enhancement of technology with a long history of instrumentation used to ascertain the performance of machines; typically in factories and mines. This enabled calculation of the Mean Time Between Failure (MTBF) of equipment to improve preventative maintenance.

The Internet and embedded sensors provides the vehicle for lower cost near real-time data collection and transmission of data that is critical for maintaining the quality of goods from departure to destination.

However, the greater challenge is ensuring data accuracy concerning the product being moved, rather than the physical attributes of the moving and storage facilities. Studies in multiple countries have shown that the overwhelming majority of product transactions between suppliers and retailers have inconsistencies in what should be identical data. The impact on supply chains of lost and late deliveries, inaccurate orders, extra transport costs and duplicated work is substantial.

As your businesses cannot correct every error, it needs an overall focus on product data governance – that is ‘one version of the truth’. This is to establish a set of standards for how the common business metrics and data will be defined, implemented and enforced throughout the organisation. Then use master data management (MDM) to describe the business data and the contexts for gathering, recording and transmitting the product transaction data.

Unfortunately there is no glory in this activity. Your supply chain manager/director needs to make this happen. Until it is successfully implemented, money will be spent on technology ‘solutions’, with no improvement in your supply chains, or relations with customers.

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About the Author

Roger Oakden

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With my background as a practitioner, consultant and educator, I am uniquely qualified to provide practical learning in supply chains and logistics. I have co-authored a book on these subjects, published by McGraw-Hill. As the program Manager at RMIT University in Melbourne, Australia, I developed and presented the largest supply chain post-graduate program in the Asia Pacific region, with centres in Melbourne, Singapore and Hong Kong. Read More...

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