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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.

18 comments on “Smartphones Find Niche in Supply Chain Management

  1. AnalyzeThis
    April 28, 2011

    While I don't use my smartphone to manage inventory… yet… it won't be long before I'll be able to do the majority of my work from my phone.

    The technology already basically exists. It's just a matter of getting it implemented. And I can already do MOST of my standard work (email, etc.) on my phone, so the thought really isn't very far-fetched.

    If I were in the scanner business, I'd be nervous and preparing for the day when stand-alone hand-held scanners become obsolete. We're already seeing consumer use of “scanners” via phones with those QR codes.

    Now of course smartphones won't destroy the scanner business completely, but I do agree with you: get working on those logistics apps, if you haven't already.

  2. Adeniji Kayode
    April 28, 2011

    This is really inspiring. I think the idea of iphone being used as scanner by the consumers is really a good one and i also mean to say that that technology will spread like wild fire across the world with time.

    I support the good advice to those in the scanner business to develop logistics apps for smartphones as fast as they could.

  3. Taimoor Zubar
    April 28, 2011

    The cost of a single smartphone for a supply chain executive might sound a bit high, but considering the use of the smartphone as a tool for communication, internet browsing, barcode scanning and taking photographs, the cost may be considered justified.

  4. Taimoor Zubar
    April 28, 2011

    If I were to design an app related to logistics and supply chain, I would want to have a 'dashboard' interface. The interface would provide all the data that the executive needs on one screen. It would indicate the current inventory status at various locations, inbound and outbound goods that are in transit and orders that are pending. It would show the data in numbers as well as in graphical form, but would not be too graphical intensive to keep the processing fast.

  5. Himanshugupta
    April 28, 2011

    Using smartphone in supply chain in such a way is really niche. Quite some application already exist where you can scan the barcode and find deluge of information about that particular product on the internet. So, all developer would need to do is to change few things here or therer and WALLAH we have our wish.

  6. Backorder
    April 28, 2011

    Sounds like a cool idea. But think of the down side for a while. Of course smartphones can be used for the job. But are they the right tools for it? What about best performance and ease of use? What about security and supply chain integrity? Surely, we cant be talking about simply replacing the existing equipment with smartphones as the cost would be too offensive. A smartphone with a camera and wifi could be many things. But are all those applications really in need of a better alternative?

  7. eemom
    April 28, 2011

    I recognize that this is a great use of smartphones.  As smartphones get more affordable, more and more people are using them instead of standard cell phones.  The convenience of getting your emails from multiple sources while on the road is one that started the proliferation of smart phones.  I have no doubt that more and more applications will find their way into the corporate world to further the use and need for smartphones.

    Cell phone carriers have taken to charging for a data plan even on standard cell phones.  Although this is a lesser charge than for the smartphone data plan, it still closes the gap between the two.  Why pay for a standard phone when you can pay a little extra for a smart phone?

  8. DataCrunch
    April 28, 2011

    I believe there is a place for smartphone in the supply chain, but not for use in the day to day barcode scanning operations.  The scanning/camera phone features are just way too slow, but for casual inventory look ups perhaps it may be useful.  I could see more of a use for quick mobile visibility snapshots of order, inventory, shipments, etc…, basically a mobile dashboard for managers and supervisors.  Also, smartphones can be useful for messaging and alerts of critical supply chain events.

  9. Parser
    April 28, 2011

    Yes, this is a great idea. Some opponents may speculate that smart phones are too expensive for this purpose but I don’t think so. Let say for small companies 10 to 50 people buying separate equipment could be more expensive. With a customizable app for logistics would solve many problems. We could look at other sides of a business – print scanners to pdf, pictures and pdfs annotations, incoming inspection and documentation, stock parts transactions and this list can be really long. In some ways this could be done by iPad/tablet possibly in a better way thanks to larger display. I can see that iPad/tables will start compete with features of smart phones.

  10. SunitaT
    April 29, 2011

    Right now smartphone are expensive and they are relatively slow compared to the conventional barcode scanners. The scenario might change soon because prices of smartphones are falling significantly. I feel one significant advantage of using smartphones is it can be used to scan “QR codes” as well. I am not sure if QR code will replace barcode, but the fact is smartphones can be used to scan different codes just by changing the app.

  11. Jay_Bond
    April 29, 2011

    Smartphone’s are a very useful tool that is gaining popularity throughout the working world. Many businesses are now realizing these tools are no longer just for the executives. Though the cost of these phones is expensive on the front end, the cost is more than justified. If companies can make a deal with the providers to have a large amount of phones on one business contract, the cost is not prohibitive.

  12. Backorder
    April 29, 2011

    I agree. The scanning/camera phone features will never be the optimum fit for standard supply chain tasks. Plus, there is always a line that would separate the company equipment/machines from the personal ones. And, even though some might argue that software could take care of that, I still feel it is much easier to just hand over a scanner than logging out and into through your personal use smartphone for a work related task. Again, simply replacing the targeted machines with general purpose smartphones wouldnt make any sense.

  13. Ms. Daisy
    April 30, 2011

    It is wonderful to have the smartphone for personal use and business.  It is not only the electronic supply chain that is benifiting from the smart phone technology. It is gaining grounds in healthcare services for general “tele-care” of different types. It is helping increase access to services in real time while decreasing the drive time by patients.

  14. hwong
    April 30, 2011

    Taimoorz: there are already alot of supply chain apps that does exactly what you described. For example IBM acquired the ilog company which has dashboards and optimization tool for determining what and where and when and how much to replenish. Also there is a network diagram for showing how to route deliveries.

  15. SP
    April 30, 2011

    Found this article interesting. Smart phone helping supply chain? yes, great.

    a phone reading barcode! If a phone can scan bar code and update details then nobody can stop it from reading a credit card using a new app and completing the supply chain's transactions on the spot. just a thought. we never know what happens tomorrow.

  16. t.alex
    May 2, 2011

    I have seen common use of smart-phones to take photos of what have been discussed on the board, insteading of jotting down the whole meeting minutes.

  17. saranyatil
    May 8, 2011

    Smart phones are having super powers, and at the same time Supply chain is highly complicated so smart phones are highly needed to support the function in different ways.

  18. Tam Harbert
    May 10, 2011

    I agree that smart phones will not replace bar code scanners, but I do think that they will be used more and more in the supply chain. It's a matter of what's at hand, so to speak. If a mobile phone is in your pocket and a bar code scanner is not, and you are not scanning a huge number of items, then it makes sense to use the phone. Smart phones will be used to do things in small volumes.  They won't replace bar code scanners and other supply chain equipment and applications for large-volume transactions.

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