Smartphones Find Niche in Supply Chain Management

Smartphones seem to have reached a tipping point. According to Berg Insight, a market research firm specializing in the communications market, global shipments of smartphones increased by 74 percent last year to reach 295 million units.

The firm predicts a compound annual growth rate of 32 percent, which would mean 1.2 billion units by 2015. The number of smartphone users is forecast to grow from an estimated 470 million users last year to 2.8 billion in 2015.

It's not surprising, then, that more people use smartphones in their jobs. What is surprising, however, is how supply-chain professionals are now using them. A survey of supply-chain executives by consulting firm ARC Advisory Group early this year highlights some of these uses.

When the survey asked these professionals (most of whom work at companies with revenues of more than $1 billion) which mobile technologies they used in supply chain management, smartphones topped the list. Almost 70 percent named smartphones, followed by handheld computers and cellular networks -- each with 54 percent -- and barcode scanners at 47 percent.

"Apparently, respondents use this relatively new mobile technology more often than mobile applications that have been in use in logistics and for a much longer time," wrote report authors Adrian Gonzalez and Steve Banker.

And they are using the phones for much more than talking. The top three uses, according to the survey, are to scan barcodes (22 percent); take and transmit photos of delivered goods (22 percent); and access social media sites like LinkedIn, Twitter, and Facebook (21 percent).

Given that barcode scanning and photography tied at 22 percent, the authors speculate that they might be related. "Perhaps, if a shipment arrives with damaged goods, the receiver photographs and then scans the bar code label using the smart phone, after which he or she e-mails the photo and the bar code to the supplier simultaneously."

Indeed, the combination of barcode scanning to identify the item; photography to verify the condition of the item; and wireless connectivity to transmit information is perfect for logistics applications. When the survey asked users what smartphone functions they were most interested in for the future, the most popular answers were to transmit proof of delivery; scan barcodes; and trace and track orders, shipments, mobile workers, or assets.

The survey also asked an open-ended question: "If you were to develop the ideal supply chain and logistics 'app' for your smartphone, what would it do?" Among the responses:

• Notify users of when an item is potentially out of stock
• Alert users to a variance from sales plan or forecasts
• Better interface with desktop applications, especially spreadsheets.

But the cleverest response, say the authors, was an executive who wanted to use the smartphone to fight chargebacks. The phone would allow a supplier to be notified and provide important details in real-time when a customer recorded a charge-back, rather than three months later when there was little the supplier could do about it.

Will smartphones overtake traditional barcode scanners? Smartphones are still too expensive for that, but costs are coming down quickly. If I were in the scanner business, I’d develop logistics apps for smartphones as fast as I could.