In materials handling, the latest technologies are sharing the limelight with more mature systems. While RFID tops the list, tried-and-true technologies such as AGV are also garnering attention. Unscramble the acronyms and discover what the buzz is all about:

RFID: By setting 2005 mandates for RFID (radio frequency identification) deployment, the U.S. Department of Defense, Wal-Mart and other major retailers have intensified the attention that was already on this product-tracking technology. Touted as revolutionary for years, RFID has now become a must-have for many firms. "A lot of companies are working in deadline mode," says Warren Wilson, analyst for research firm Summit Strategies. "Their chief concern is to comply with the mandates and to remain eligible as a supplier to these big outfits." In fact, in a survey conducted by Wavelink Corp. polling 135 attendees at Frontline Conference and Expo, 79% of respondents said they had implemented an RFID pilot program or were planning to launch one in the next two years. Still, weighty issues remain, the survey found. Chief among them is cost, followed by incomplete standards, an untried market and a dearth of sophisticated integration tools. After weathering this rough early-adoption phase, however, many companies expect to dramatically boost efficiencies through this technology.

AIDC: While RFID may be getting more press, AIDC (automatic identification and data collection) technology is actually even more pervasive in supply chain management. After all, this acronym encompasses RFID as well as bar code and speech systems. In fact, AIDC applications have the potential of bringing new efficiencies to almost every business function, including receiving, completing purchase orders and tracking inventory. And that list represents only a small sampling of the exhaustive capabilities of AIDC. For example, bar code or RFID labels can identify product identity and location, while speech systems, mobile computers and pick- or put-to-light systems can expedite inventory, pick/putaway and order processing, among others. In short, the technology is all about delivering information in real-time, and that's a major benefit to many companies.

AGV: While AGVs (automatic guided vehicles) are by no means a new technology, they're gaining newfound attention, as evidenced by their flourishing sales. "Through the first six months of the year, revenues for the industry were up 28%," says Mark Longacre, marketing manager at FMC Technologies, citing statistics from Material Handling Industry of America, in comments to Modern Materials Handling. "The total number of vehicles sold is also up about 25% from last year." This is especially impressive because of the trend toward smaller systems consisting of three or four vehicles, instead of big systems comprised of 50 or more AGVs. Moreover, the technology is already mature with some of the most noteworthy advances—including laser bumpers and laser and inertial guidance systems—considered yesterday's news. So what accounts for the bump in sales? Some observers pinpoint companies' greater awareness of the benefits that AGVs can bring to their operations, with manufacturers continuing to account for a large portion of demand.

End-to-end: Material handlers have typically chosen separate "best-of-breed" solutions to bolster their supply chain systems. They would then tackle the arduous task of integrating and interfacing these disparate applications—a process that's expensive and time-consuming. Now, many are discovering an alternative—an end-to-end or completely integrated system. "People are looking for end-to-end solutions because there is a big expense in interfacing best-of-breed, not only in the first go-round, but in handling upgrades, too," Dave Healey, director of account management at Lilly Software, tells Material Handling Management. "And with disparate programs you've connected, you may not be able to quickly take advantage of any enhancements because you'll have to reintegrate everything." With end-to-end solutions, integrating systems is no longer an issue. What's more, these systems can be scaled and configured according to your needs. The trick is finding the solution that is most suitable to your operations and your vertical market.

3PL: While the robust growth of the 3PL (third-party logistics provider) market has been ongoing, what's new is firms' increasing use of multiple providers. A study by Northeastern University and Accenture found that nearly two-thirds of Fortune 500 companies employ more than one 3PL. The reason? 3PLs are developing specialties or "sweet spots" as one executive calls it, and users are utilizing these sweet spots. In fact, the number and type of services provided by 3PLs have risen significantly over the years, according to Dr. Dale S. Rogers, professor at the University of Nevada whose research on warehousing dates back to 1928. But while many 3PLs are finding niches, some are providing a wide range of services, directly challenging distributors. "In some ways, 3PLs have replaced the distributors," John Langley, professor of supply chain management at Georgia Tech University's Logistics Institute, tells Industrial Distribution. "I also see some 3PLs extending themselves, saying they'll also take ownership of the inventory as needed, effectively becoming distributors themselves."

Sources:

Companies Adopting RFID Despite Challenges, Survey Finds
Supply Chain Management Review, September 27, 2004
www.manufacturing.net/scm

AGVs Make a Comeback
Bob Trebilcock
Modern Materials Handling, October 1, 2004
www.mmh.com

The Hurdles to RFID
Hallie Forcinio
Managing Automation, November 2004
www.managingautomation.com

Standards & Costs Limit RFID's Reach
Joseph Rosta
IEN – Industrial Equipment News, June 2004
www.ienonline.com

AIDC in the Warehouse: Hardware's Easy; Software's Hard
Bert Moore
Material Handling Management, August 2004
www.mhmonline.com/showStoryBody.asp?SID=&nID=3625

The Enemy of Distribution?
Joe Nowlan
Industrial Distribution, October 1, 2004
www.manufacturing.net/ind

3PLS: Looking Out for You
Clyde E. Witt
Material Handling Management, September 2004
www.mhmonline.com/showStoryBody.asp?SID=&nID=3715

Integrating Systems, End-to-End
Leslie Langnau
Material Handling Management, September 2004
www.mhmonline.com/showStoryBody.asp?SID=&nID=3722

Resources:

Frontline Solutions www.frontlinetoday.com

Material Handling Industry of America www.mhia.org

Material Handling Management www.mhmonline.com

Modern Materials Handling www.mmh.com