Cloud computing is a hot topic in the IT industry today because it promises many benefits both for traditional computing as well as for distributed, Internet-based services. The Internet is commonly viewed as a something used by people, but we are entering the age of "the Internet of things" where everyday objects communicate directly with each other. While industry discussion of cloud-based services has only recently broadened to include such services, at Intelleflex we are already laying plans to address a significant, unmet opportunity in extending the cloud to include the monitoring of goods in global supply chains.
Intelleflex is a leader in providing on-demand solutions for tracking and monitoring products and assets with a current focus on perishable foods and pharmaceuticals, mobile worksite and personnel, and defense and security markets. Our offerings are based on our patented Extended Capability RFID™ tag products that provide long range, high reliability, temperature monitoring, on-tag memory, and security. Integrating cloud-based services into our supply chain solutions has the potential to reshape the supply chain management industry.
Open supply chains can be a conglomeration of independent participants brought together in the forwarding and distribution of goods. Often the participants in the supply chain have a relationship only with companies they directly exchange goods, much as links in a chain only connect to their immediate neighbor. This makes end-to-end condition monitoring of goods through the supply chain difficult. However, when the condition of the goods directly relates to the value – such as with perishables – then the lack of communication directly impacts the value of the goods.
Intelleflex products deliver a breakthrough in perishable monitoring by providing in-transit data visibility though-out the supply chain. Current products, such as the Intelleflex TMT-8500 temperature logger, enable determination of remaining shelf life for perishable produce based on capturing the temperature history since harvest. Both the ability to read the temperature history when packed within a pallet of produce, and the inexpensive cost point encouraging use in each and every pallet, enable a fundamental change in the handling of perishable goods in the supply chain. By reading the temperature history from the TMT-8500, supply chain participants can re-prioritize shipments at the pallet level based on remaining shelf life – not just shipping out in the order received, regardless of the condition.
Changing perishable supply chain management to First Expiring, First Out (FEFO) delivers direct benefit to all supply chain participants, as it result in more goods reaching the retail shelves in higher quality condition. It is estimated that this could reduce supply chain shrink by up to 25%. For perishable produce alone, that savings is estimated to exceed $9 billion annually. Growers who use our products see payback in 1 to 2 years, while realizing significant ancillary benefits such as adherence to government mandated traceability, documented quality of delivery for price protection and insurance records, and real time inventory visibility at no additional cost.
Just as in chess or checkers, optimizing each move based on the current state of the game can improve your play – but thinking two, three or more moves ahead can deliver a winning strategy. In a supply chain, the sequential hand-off of goods and data make looking more "moves" ahead difficult. This is where bringing mobile condition monitoring data up into the cloud is so powerful.
Consider a grower who has three retail customers, each with the same amount of strawberries, but with strawberries in different conditions. With cloud-based condition monitoring he knows that the fruit at retailer #1 have 10 days of remaining shelf life, fruit at retailer #2 has 5 days of remaining shelf life, and the fruit at retailer #3 has only 3 days of remaining shelf life. Clearly the grower can better satisfy his customers by delivering first to retailer #3, but that knowledge requires the customer to share the condition data with the grower – which is not common today. Cloud-based services can combine connectivity of mobile devices like our the Intelleflex TMT-8500 for retrieving the strawberry shelf life, aggregation of all of the grower's customer data, and integration with his own inventory data. This powerful combination of data and services in the cloud enables the grower to "see" two, three or more "moves" ahead in the supply chain, unlocking huge potential in delivering higher quality goods more efficiently.
Certainly, some of these benefits could be delivered through traditional, dedicated IT infrastructure, but the nature of cloud computing – easily accessible, virtualized resources that can be dynamically reconfigured and scaled to adjust to a variable load – makes it ideally suited to span the disparate links in a supply chain. Further, the "...as a service" business model enables easy adoption due to the low cost of engagement. These are critical attributes for engaging with the supply chain, where participant relationships, types and volume of goods, and transportation are truly dynamic. Significant overhead in establishing a data relationship, scaling throughput or capacity, or performing analysis would quickly limit the usefulness of time sensitive condition monitoring information.
Cloud-based services and supply chain condition monitoring are a powerful combination in delivering a winning strategy for perishable goods management. Intelleflex is leading this effort, initially with products that provide in-transit data visibility while accumulating relevant product history. Enabling supply chain management applications with cloud-based data aggregation and data warehousing services will further extend this value. This provides a winning combination for the next generation of supply chain management.