May 16, 2005 (Computerworld) --
The need to improve materials handling, inventory management and asset management processes is driving use of wireless technologies in the manufacturing sector. But cost and complexity are keeping the pace of adoption slow, experts say.
"Companies are recognizing that this is a viable technology, and what they are trying to do is look at it a little more strategically and understand how it can work in different parts of their business," says Dennis Gaughan, an analyst at AMR Research Inc. in Boston.
An October study of 933 U.S. and Canadian companies by IDC showed that about 53% of process manufacturers and 39% of discrete manufacturing companies have already implemented some wireless and mobile technologies. This included technologies such as laptop computers, Pocket PC- and Palm OS-based handheld devices, smart phones and specialized industry-specific tools.
Those numbers put the manufacturing industry somewhere in the middle of the pack when it comes to wireless adoption, behind the transportation and insurance industries but ahead of the professional services and retail sectors.
As with their counterparts in other industries, manufacturing companies are increasingly using wireless technologies to improve communications and enable better access to information for corporate sales force automation and customer relationship management applications. But the real value has come from wireless use in warehouse and distribution environments and, to a lesser extent, on the shop floor, according to analysts.
Into the Warehouse Wireless-enabled radio frequency data-capture devices such as wands, scanners and imagers are used fairly widely for identifying, tracking and monitoring almost everything that moves within a manufacturing environment, says Rob Douglas, president of Psion Teklogix Inc., a Mississauga, Ontario-based vendor of such devices.
The ability to track materials is enabling more-efficient inventory management, enterprise asset management and maintenance, as well as order fulfillment and field-support operations, Douglas says.
Analysts say they expect radio frequency identification tags to add further tracking capabilities.
One of the most popular applications of wireless technologies involves the use of RF devices for material handling in distribution warehouses.
"We use wireless for bar code scanning equipment, moving inventory around, cycle counting, building shipping documents as we load the truck from pick lists, receiving operations, shop floor alerts for more parts and look-up of items," says Dennis Roell, IT manager at Betts USA Inc., a Florence, Ky.-based manufacturer of injection-molded components.
The benefits of such automation can be enormous, says Brad Barnett, chief operating officer at TaylorMade Golf Co. in Carlsbad, Calif.
TaylorMade, a wholly owned subsidiary of Adidas-Salomon AG, saw a 24% improvement in labor productivity in its main warehouse as a result of its decision to deploy a wireless-enabled warehouse management system. The application is based on software from Provia Software Inc. in Grand Rapids, Mich., and wireless devices from Psion PLC in London, the parent company of Psion Teklogix.
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General Mills, Genentech, San Diego Gas & Electric, University of Pennsylvania and Monsanto top the list.
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