As with any growing industry, transport has its share of challenges, from meeting regulations to speeding up delivery times and reducing its reliance on paper forms. Technology can be applied to make the sector more efficient.
IT is playing a crucial role in the development of Ireland’s transport and logistics sector. The wider use of handheld devices and new technologies for tracking and monitoring goods – to name just one example – is helping to change the way the sector operates. In an industry where time is a crucial factor technology is helping to drive efficiency and lower costs.
“IT is a substantial part of the business,” says Frank Kilbride, managing director of Expeo Logistics, which provides specialist logistic and distribution services to the telecoms and electronic industries.
According to Kilbride, IT has helped change the way firms deliver goods. “Transport management systems allow for booking, the setting up of jobs and tracking as they’re completed,” he says. “On the logistics side we have management systems for stock location.”
Handheld devices have made the process easier for companies in the sector.
“The development of handheld devices for scanning barcodes and signatures has helped make the process more efficient. This has been a significant development,” says Kilbride. “The continued introduction of handheld devices will help workflows and document management systems will increase in use.”
The internet has played a role in the greater level of efficiency being enjoyed in the sector today. “The use of online systems for proofs of delivery and also for stock listings has sped up the process as there is less handling of documents in the process,” Kilbride explains.
He says IT is speeding up business processes in the sector, allowing goods to be located and delivered faster than ever before. “It’s to do with the reduction of time taken for picking up items in the warehouse. Scanning the products, locating them and all similar functions in this area have improved,” he says.
Radio frequency identification (RFID) is a technology that is helping improve the way firms track and locate items. “The whole area of RFID is starting to take off with large companies such as Wal-Mart, Tesco and Gillette using it,” says Kilbride. “RFID will see a growth going forward.”
Ireland was touted as a potential RFID leader in 2005. Dr Joseph Dalton of Intel told the first Irish RFID summit that “Ireland has a tremendous opportunity to be a world leader in the field and it’s important we take it”.
The chances of Ireland playing a key role in the development of this technology improved in March when the European Commission threw its weight behind the technology as it unveiled its RFID strategy at the CeBIT conference in Hanover.
“From fighting counterfeits to better healthcare, smart RFID chips offer tremendous opportunities for business and society,” said Viviane Reding, European Commissioner for Information Society and Media.
She acknowledged the European Commission’s Europe-wide public consultation, which took place last year, identifying a strong lack of awareness and considerable concern among citizens.
“The commission’s RFID strategy will therefore seek to raise awareness, stress the absolute need for citizens to decide how their personal data is used and ensure that Europe removes existing obstacles to RFID’s enormous potential.” The commission estimates the European market for RFID will be worth over €7bn by 2016.
The cost of employing RFID has dropped in recent years. Its widespread use at the item or product level has been slowed due to relatively high costs, but in 2006 the cost of RFID tags fell to about US$0.079 each when purchased in quantities of one million.
The technology is also becoming more practical to use as tags get smaller. Earlier this year Hitachi announced it had developed a tag that was 0.05mm sq in size.
The extra ability to track goods that technologies such as RFID introduce is becoming increasingly important as security services demand more information on items being transported.
“There have been many security initiatives since 9/11,” says Stephen Tracey, managing director of Icarus, a service provider for the logistics and revenue sectors. “Customs is charged with making sure the supply chain is secure.”
As Tracey explains, the information burden on all firms has increased in recent years and businesses need to adapt to meet the challenges this presents.
“Companies need to provide much more information than they used to,” he states.
The need for firms to provide more information for security purposes was made evident in the latest version of the Single Administrative Document (SAD). The SAD is required for exporting, importing or transporting goods within the EU or the European Free Trade Area.
“The latest version is the Harmonised SAD. There are 32 differences between the current SAD and its predecessor,” says Tracey.
He says that not only are companies having to provide more information on the goods they wish to transport but that they also have to provide it earlier.
IT is playing a vital role in ensuring this added pressure doesn’t have a detrimental effect on businesses. “Before goods leave premises they’ll have to provide customs with information, which is pretty arduous,” explains Tracey.
Icarus provides a service that helps make the customs clearance process more efficient for firms so that they needn’t consider it a burden. “We provide a managed service with the software and specialist skills to help get clearance done. We have 80 airlines tied to our system. It operates as a hub to exchange information.”
He says by connecting up the different links in the supply chain process, companies can manage information better as they have faster access to the data required.
Managing the data
IT is changing the way data for documents such as the SAD is managed. Softco provides a document management system that is changing the way transport giant DHL operates.
“DHL is using our system in over 60 countries,” says Robert Hickey, product manager with Softco.
The amount of data processed by the firm means that having a solid IT backbone is essential. The document management system is used to scan documents such as airway bills. “A typical DHL centre can process up to 100,000 airway bills in one day.”
Airway bills need to be kept for 90 days, and, when stored in paper form, they consume a lot of space.
“There could be up to nine million of these documents flowing around the floors of warehouses. It would require significant filing cabinet space and great effort on the part of staff to index the documents,” notes Hickey.
He says that introducing the document management system had dramatically changed the way DHL operated. The firm was able to remove the filing cabinets from its floors, allowing space for another 20 people to work in a typical warehouse and enabling it to have more staff capable of meeting customer needs.
The system is still being rolled out across DHL’s worldwide operation and Hickey says there remains significant potential for growth. In addition to the document management system, Softco is enabling workflow servers that are helping to drive efficiency in the business.
“Typically it would take between 60 and 90 days for the firm to be paid for a particular job,” says Hickey. “The system is making it easier to track debtors and it has now reduced the payment period to between 30 and 45 days.”
The cost of employing the technology that allows for such an improvement in efficiency will drop in the future, opening up access to a wider market.
“There will be a drop in cost allowing more companies to access the technology,” says Kilbride of Expeo.
IT will encourage more linkages between the supply chains of firms in order to drive efficiency in business processes, he maintains.
“Collaborative work is the future,” adds Tracey. “We are going to see a tighter connection of systems. The manual system will not work any more and in its place we will see a greater deployment of collaborative technology, which will result in greater linkages.”
By Emmet Ryan