Roadmap to tracking based business and intelligent products.docx

Roadmap to tracking based business and intelligent products.docx

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Roadmaptotrackingbasedbusinessandintelligentproducts

Roadmaptotrackingbasedbusinessandintelligentproducts

JanHolmströma,

RistoKajosaaria,

KaryFrämlinga,

andErikLangiusb,

aHelsinkiUniversityofTechnology,Otakaari1,02150Espoo,Finland

bTNOICT,Eemgolaan3,9701BKGroningen,TheNetherlands

Availableonline21January2009.

Abstract

Item-centrictrackingisanopportunitytoincreasevisibilityandcontrolindifferentoperationsofacompany.Theeconomicalfeasibilityofitem-centrictrackingisbasedonrecenttechnologicaldevelopmentsformonitoringthematerialflowontheitem-levelinsteadofthematerialtype-level.Itenablescompaniestotrackandtraceassetsovertheirlifecycleandmanagesupplychainoperationsacrossorganizationalboundaries.However,thechallengeinpracticeistofindtherightareastostartthedevelopmentofbusinessapplications.Inthisviewpointpaperameans-endsframeworkforintroducingitem-centrictrackinginbusinessisproposedbasedonrealizedtrackandtracecases.Basedontheframeworkaroadmapforintroducingtrackinginbusinessesoperationsisoutlined.TheproposedroadmapcircumventsthemostchallengingbusinesscasesforintroducingtrackingandRFID-technologyinthesupplychainandfocusesonassetmanagementasamoreaccessiblerouteforbusiness.

Keywords:

Trackandtrace;RFID;Item-centrictracking;Supplychainmanagement;Assetmanagement

ArticleOutline

1.Introduction

2.Researchapproach

3.Means-endsframeworkfortrackingbasedbusiness

4.Examplesillustratingthemeans-endsoftrackingbasedbusiness

4.1.Assetmanagement

4.2.Flowthroughsupplychainmanagement

4.3.Closedloopsupplychainmanagement

5.Roadmaptotrackingbasedbusiness

6.Couplingoftrackingapplications

7.Conclusions

Acknowledgements

References

Vitae

1.Introduction

Item-centricsupplychainmanagement[1]anditem-centriccontrolandinformationmanagement[2]isanapproachthatofferscompaniesopportunitiestobettertrackandtraceassetsovertheirlifecycleandtomanagetheirsupplychainoperationsefficientlyacrossorganizationalboundaries.However,businessscenariosforimprovedmaterialandassetinformationmanagementacrossthelife-cycleandoverorganizationalboundariesneedtobefurtherinvestigatedinordertospeedupthediffusionoftheapproach.Developingclearpropositionsisessentialespeciallyfordiffusionoftechnologytosmallandmediumsizedenterprises.

Thispaperexploresthebusinessopportunitiesthatresultfromshiftingthefocusofmaterialsandassetmanagementfromlocationbasedcontroltoitem-centricmaterialsandassettracking[3].Thebaseprinciple[4]istotakethetrackeditemasthebasicentityandtreatthelocationasapropertyoftheitem.Theresultisthattheitembeingtrackedbecomestheobjectofcontrolinsteadofinventoryandassetaccountsinpredefinedlocations.Thiswayofshiftingthelocusofcontroltotheproductoritemisafirststeptowardstheintelligentproductconcept[5].

Wheninplace,item-centrictrackandtraceisapotentialnewmeansforcompaniestosetupeconomicallyfeasibleconcurrententerprisingsolutions.Theeconomicalfeasibilityofitem-centrictrackingisbasedonrecenttechnologicaldevelopmentsintechnologiesformonitoringthematerialflowontheitem-levelinsteadofthematerialtype-level.Trackingandautomatedidentificationarebasedondifferenttypesofbarcodesandincreasinglytheuseofradiofrequencyidentification（RFID）technology[6].

Toprovidecontroloverindividualgoodsandassetsitisnecessarytodeveloptechnologythatcanmaintaintheidentityoftheitemandthatitemproperties,suchasthelocationoftheitem,canbeupdatedinthesamewayacrosslocations（seeFig.1）.Item-centricsupplychainmanagement[3]focusesonthemanagementofindividualitemsinsteadofthematerialinventoriesatpredefinedlocations.Itisaproposedsolutiontothedifficultytodevelopvalueofferingsoverthelife-cycleofitemsandacrossdifferententerprisesinthesupplychain.Fig.1illustratesthedifferencebetweenalocationbasedanditem-centricapproachtomaterialsmanagement.

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Fig.1. Trackingsystemsenableachangeofcontrollogicfromlocationbasedtoitem-centricmaterialsmanagement[3].

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Therearemanyopportunitiesforbusinessestobenefitfromitem-centriccontrol.Thepurposeofthispaperistoidentifystate-of-the-artpracticesinitem-centricsupplychainmanagement（SCM）andassetmanagement（AM）.Furthermore,wewillanalysetheidentifiedapplicationsandhighlightthefunctionalanalogiesbetweendifferenttypesofapplications.Basedontheanalysisweproposearoadmapforadoptingitem-centriccontrolindifferenttypesofbusinessapplications.

2.Researchapproach

Theroadmapforintroducingtheitem-centriccontrolinbusiness,i.e.oftrackingbasedbusiness,isbasedonanumberofstate-of-the-artexamplesthathavebeenpresentedinprofessionalandacademicjournalsin2005and2006.Thestate-of-the-artcaseswerefoundusingtheProquestenEBSCOdatabases.Thesearchtermsusedfortheinitialdatabasequerieswere‘RFID’and‘tracking’.Thecasesfromthepasttwoyearswerethenscreenedforfurtheranalysisandjudgedbytwocriteria:

1.Thecasemustpresentasuccessfulapplicationofarealizedautomatedidentificationbasedsystem,insteadofhypotheticalprospectsofRFIDandtrackingwhichhavebeenwidelypublishedinbothacademicandtradejournals.

2.Thedescriptionprovidesapresentationofthebusinesscase,thebusinessenvironment,andtechnicaldetailsofthetrackingandidentificationsystemthatissufficienttoidentifythetypeofsolutionanditsrationale.

Thestructureofthepaperisthefollowing.First,wedevelopameans-endsframeworkthatidentifiesthefactorsthatweusetoanalyzeanddifferentiatestate-of-the-artcases.Thisisfollowedbyamoredetailedanalysisofselectedcasesthatillustratethemaincategoriesasdescribedbytheframework.Inconclusionwepresentaroadmapforintroducingtrackingbasedbusinessapplicationsinacompany.

3.Means-endsframeworkfortrackingbasedbusiness

Thesearchidentifiedaltogether20differentcasedescriptionsthatmetthedefinedcriteriaofarealizedautomatedidentificationbasedsystemandapresentationthatissufficienttoidentifythetypeofsolutionanditsrationale,i.e.themeans-endsproposition（[7],pp.211）ofthecase.Theidentifiedstate-of-the-artdescriptionswereeachanalyzedindividuallyandtheidentificationsolutionanditsbenefitsdocumented.

Theexamplesofautomatedidentificationandtrackingbasedbusinesswerecategorizedbasedonthesystemfunctionality（i.e.the“means”）andthetypeofgoodsandassetstracked（i.e.the“ends”）.Thecategorizationoffunctionalityisbasedontheobservation[6]thatthebasicfunctionalityintrackingsystemsistheidentification,andtrackingitselfanapplicationbasedonidentification.Themorecomplexfunctionalityintheanalyzedapplicationsallowedthesharingoftheitems’trackinginformationviaweb-portalorsystem-to-systemintegrationdependingonthevaluetothecustomer.

Assetmanagementandsupplychainmanagementcanbeseenasdifferentendsthatcanbeachievedbythesamemeans.Fig.2illustrateshowassetmanagementandsupplychainmanagementapplicationsfromtheitem-centricperspectivearelong-termandshort-termtrackingapplicationsrespectively.Meetingtheeconomiccaseforinvestmentintrackingiseasierforassetmanagementapplicationsthanforsupplychainapplicationsbecausethebenefitsinassetmanagementcanaccumulateovertime.

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Fig.2. Fromanitem-centricperspectiveassetmanagementandsupplychainmanagementaredifferentendsforthesamemeans.

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Thefirststeptotrackingbasedbusinessapplicationsistheidentificationoftheitem.Afterimplementinganidentificationsystem,thefollowingsteptoenhancesystemfunctionalityistoconstructinformationmanagementstructurestosupportthegatheringofdatafromthepointsofidentification.Trackingofgoodsisbasedonthecentralizingofidentificationinformationofvarioustrackingpointsinasingledatabase.Thedatabasecanbeusedtoperformqueriesaboutthemovementofitemswhichserveasbasisforanalysisontheoptimalmaterialusagesandrouting.Theconstructionofatrackingsystemrequiresthereforeachangeofviewfromlocationcentrictoitem-centricmaterialsmanagement,whichmakestheitemtheobjectofoptimizationinsteadofthestoragelocation.

Theclosedcirculationofgoodsinassetmanagementsystemsisamajorpointthatdistinguishesitfromsupplychainmanagementsystems.Inclosedcirculationthenumberofidentifieditemsinrelationtotheidentificationpointscanbekeptmuchlowerthaninflow-throughsolutions.Thisdirectlyaffectstheinvestmentdecisions,partlythroughthecostofidentifierthatisused,butalsothroughthecostofcreatingandsettinguptheitemtobetrackedinthetrackingsystemitself.Implementingsupplychainmanagementsolutionsusingclosedloopassets–suchasrollcagesandpallets–meansthatthereisanoverlapbetweenassetmanagementandsupplychainmanagementsolutions.

Ourproposedmeans-endsframeworkissummarizedinFig.3.Theframeworkidentifieseightcategories,basedonthethreedivisionsofsystemfunctionalityandthedistinctionsbetweenassetmanagement,assetbasedsupplychainmanagement,andflowthroughsupplychainmanagement.Foreachcategoryanillustrativestate-of-the-artexampleispresentedanddiscus