days when radio frequency identification (RFID) is constantly on everyone's
lips, and when every relevant enterprise application vendor is hedging its bets
towards becoming RFID-ready or is even convincing the market that its RFID-compliant
solution is exactly what the doctor (such as, Wal-Mart, Target,
Albertsons, the US Department of Defense [DoD])
ordered the typically quiet Provia Software (www.provia.com),
a privately-held provider of supply chain execution (SCE) software
solutions, naturally feels the time has come for it to be more vocal about its
RFID endeavors, albeit after it has already put so much effort in terms of the
proof of concept in the field.
the end of May, Provia announced at the Distribution/Computer Expo 2004
in Chicago, Illinois (US) that its ViaView event/alert management
and decision support product plays a key role in offering visibility to supply
chain data for companies supplying RFID-tagged products to Wal-Mart and other
at the end of March, Provia announced that it has aligned itself with its parent
company for over fifteen years, Viastore Systems, a leading
provider of automated storage and retrieval systems (AS/RS), and material
handling control systems, with over 3,000 cranes installed worldwide.
for the products' functional enhancements, at the end of 2003, Provia announced
the release of FourSite 4.4, an upgrade of its fulfillment
solution oriented towards third party logistics (3PL) providers. Industry-wide
globalization is a major factor affecting logistics and supply chain management
is Part Eight of an eight-part note.
One through Five detail recent announcements.
Six and Seven discuss the market impact.
One through Four were published between August 11 and 14.
Five to Eight will be published August 18 to 21.
Provia's primary challenge is overcoming its lack of market visibility. During
the twelve years that it had operated as Haushahn Systems & Engineers, the company
had established a reputation among a select group of 3PL providers and distributors.
Yet, Provia will need to broaden its appeal and to articulate more clearly its
expansions into other verticals if it hopes to fend off competition from other
warehouse management systems (WMS) and SCE vendors.
competition is not exactly negligible either given a slew of WMS vendors delivering
sophisticated collaboration, visibility, and event management functionality,
and many of them are consistently profitable, public, and have more visibility
and mindshare. In addition to Manhattan Associates and Yantra,
the list of these would contain Swisslog, Highjump,
Optum, RedPrairie, HK Systems,
and Catalyst International, to name some. The lack of support
for IBM iSeries (i.e., former AS/400) might
impede Provia's tack on retailers, which segment supposedly happen to have embraced
the platform, and where some vendors are happy to oblige, particularly the SCE
leader Manhattan Associates.
addition, Provia does not have a substantial number of alliances with complementary
software providers, such as enterprise resource planning (ERP), customer
relationship management (CRM), and enterprise application integration
(EAI) vendors. Predictably, SAP is the only major enterprise
application vendor for which Provia has coded a certified interface, while Provia
has integrated to multiple other ERP products through a standard host interface,
ViaWare Gateway. Its lack of the much mention harnessing of
Web services could also be perceived as laggard, given that the area of order
fulfillment and parcel shipping seemingly lends itself to the use of service-oriented
should never discount the competition coming from ERP "800 lb gorillas" like
SAP, Oracle, PeopleSoft, and SSA Global,
which, although still with fledgling WMS/TMS products (which is also questionable
at least for SSA Global after its acquisition of the former SCE leader EXE
Technologies, see SSA
GT to EXE-cute (Yet) Another Acquisition), are becoming more aggressive
within their large customer bases due to their ERP integration mantra. The likes
of Lilly Software, Intentia, IBS, SYSPRO,
Adonix, and ACCPAC which have also espoused
a strong WMS product in addition to their traditional ERP products, could prevent
Provia from penetrating the ERP mid-market, particularly in cases of less complex
environments, with basic case and pallet picking, straightforward task interleaving,
and selectable RF, label and paper by work area requirements. Although we do
not debate the likes of Provia's functional WMS, TMS, YMS, and SPS supremacy,
in many cases, prospective customers may like the trade-off of poorer functionality
for a one-stop-shop arrangement from their ERP provider (see ERP
Vendors Intrude on SCE/WMS Safe Haven).
should thus continue to bolster its recent realignment with Viastore
and image recognition with further marketing initiatives to penetrate mid-tier
distributors and retail companies. Top tier clients can contribute to growth
by replicating single site implementations to other parts of the organization,
but the mid-market is growing faster and offers great rewards for vendors that
stake an early claim. In addition, the market has increasingly been appreciating
the demands of managing a fulfillment network, a feat that Provia can address
with ViaWare by targeting its message appropriately.
Provia should consider acquiring or allying with a software vendor that offers
full support for ocean, air, and rail transportation modes to broaden the scope
of its TMS, and the company's solution footprint needs improvements in terms
of International Trade Logistics (ITL) compliance, contract management,
and payment processes. Therefore, the company might still need to make acquisitions
or partnerships to quickly provide a complete multimode transportation product
that complies with global trading.
to still the fairly recent availability of the single source code for multiple
platforms, Provia still has to improve the perception of its amenability to
the mid-market, and to increase its brand recognition within the TMS market.
Due to a fledgling customer base (less than thirty TMS customers), the company
might still be omitted in many TMS selections despite having long delivered
capabilities like order consolidation, route optimization, carrier rate management,
electronic data interchange (EDI) links with carriers, Internet based
shipment tracking, integrated payment on delivery (POD ) and claims
management, most economical mode determination (i.e., parcel, less than truckload
[LTL], full truck load [FTL], pool distribution, stops in transit), calculation
of best route for multiple stops, carrier selection, trailer capacity, and five-digit
zip code accuracy, but only for the tracking carrier transportation mode.
is also the challenge of differentiating in the RFID context. Namely, against
the backdrop of the ongoing RFID frenzy and vendors' attempts to jump on the
RFID bandwagon, there has naturally been a sort of a vendors' PR war of words
(as well as of true actions) in their zeal to portray themselves as an RFID
thought leader of any sort. However, while the customers should be encouraged
by the vendors' apparent interest and commendable moves, which speak volumes
about the technology's prospects, they should note that many vendors' PRs, after
cutting through customary hyped-up rhetoric, merely entail trial, pilot-stage
projects; initial participation in standards-making councils; and laboratory-based
simulations of real life, RFID-based scenarios. Although Gillette
has been a real life deployment, some other vendors have already or will soon
be able to purport similar achievements (for details on Provia and Gillette
Case Study: Gillette and Provia).
the real benefits of RFID will be achieved, when the integration of the electronic
product code (EPC) data will be a substantial part for the control of supply
chain business processes. To that end, the SAP solution too could be applied
in warehousing, manufacturing, and transportation and at touch points between
these (including production line replenishment of the warehouse, cross-dock
from receiving to production line, shipment verification in warehouse, to manifesting,
control of yard movements and then in-transit visibility up to a final proof
of delivery in transportation), which blunts the Provia's RFID cutting edge.
For additional information on EPC see Electronic
Product Code (EPC): A Key to RFID.
Nevertheless, the above announcements should keep every competitor on its toes to come up with an equivalent counteractive value proposition. Provia's international reach, attractive products and services, and highly "referenceable" customer base will continue to position it well in the highly competitive SCE market.
Highly complex 3PL environments and other industries of Provia focus, needing next generation, deeply functional warehouse, yard and transportation management software that supports intricate demands, like complex piece picking; advanced kitting and postponement; serial number capture and tracking; material handling integration (e.g., sortation systems, AS/RS, carousels); and highly configurable task segregation by work area and operator, and companies with over 200,000 line items, and over 150 users per site should place Provia on a shortlist of SCE vendors. Prospective clients should keep in mind the packaged and highly configurable nature of ViaWare and understand that customizations, if needed will cost more. A center that picks 200,000 orders over 50,000 SKUs with a great deal of value-added services is an example of complexity that Provia can address well. Existing Provia customers should evaluate the remaining portions of the product suite in search for additional value (e.g., OMS customers migrating into full-fledged WMS). Users that need automation and visibility across multiple transportation modes, including sea and air, might want to consider marrying ViaWare with third-party software for managing international transport lanes.
There are indeed some indications that the main burden for RFID compliance will fall on suppliers, and not on retailers. Thus, such companies should start evaluating RFID technology soon to avoid paying exorbitant compliance costs, in the nick of time or ensuing penalties due to their noncompliance after the deadline. CPG manufacturers and other Wal-Mart suppliers, and companies that are not yet "Top 100 listed", but are eager to grow their relationship with Wal-Mart, that are looking for a reasonably low cost path to RFID-compliance that does not include implementing an entire WMS solution, a costly customization to an existing system, or an upgrade, should look at RFIDware. It easily coexists with the existing WMS, ERP or host system and is among the easiest of ways to achieve compliance in the required time frames.
RFID compliance will mainly mean additional costs unless the holistic supply
chain business processes are also modified in the process. Many enterprises
can learn much from the Gillette's ViaWare WMS RFID deployment experience—like
in the case of some other success stories (see ROI
for RFID: A Case Study), the benefits are achievable, but one has to
beware of still unproven technology, which seems to be heading for the mainstream
and boardroom priorities, almost directly from scientific labs, of course with
a number of caveats due to the technology's current imperfection level (see
Technology to Maintain a Competitive Edge During Tough Economic Times—A Panel
Discussion Analyzed; Part Four: RFID Software Issues). The giant retailers'
compliance mandate has unfortunately preceded the achievements of applied physics
and computer science. Thus, as noted earlier on, the trickiest part of using
RFID at the case and pallet level is to position the readers and accompanying
RFID gear correctly for accurate reads, which means lots of testing, manual
intervention and tweaking on the floor before reliable automation is reached.
Another related big issue that has been encountered so far by most early adopters would be getting an accurate scan on a mixed pallet. Although RFID tags can, in theory, streamline complex stock-handling processes, enterprises should not assume that this will reduce the need for staff and processes in exception handling. On the contrary, in many cases, the resource overhead requirements for RFID implementations can often be even greater than traditional methods. Namely, there are no built-in default reconciliation mechanisms to validate whether the data was read or not, which imposes visual checking of goods as a means of reconciliation. This, in turn, might remove much of the touted value proposition of RFID. Thus, enterprises should conduct a number of tests on the plant, since laboratory-environment testing is often insufficient to determine RFID tag performance in the real life warehouse environmental and system conditions.
Users should also look warily at many vendors' claims of RFID readiness and that cite their applications are designed for automated data collection since they have been doing it for years with RF technology, and that RFID is yet another format. Namely, the process to gather bar code data follows a very structured and straightforward practice, requiring a SKU, case, or pallet to be scanned individually, whereas in an RFID environment, data collection is not such a discrete process. Namely, a bundle of data is collected in one scan, regardless of the variety or quantity of product, while in its raw form, the data shows no relationship between pallet, case, and SKU, necessary for inventory integrity. Therefore, a middleware, similar but more complex than those developed for RF and automated material handling equipment, is required by the vendors to transform an unstructured mass of data into an input the system can understand and process.
In any case, software vendors will thus have to create new data fields to cope with the inevitable data deluge by ensuring that data tables, transaction systems, and data warehouses can handle all of it, and, in general, vendors have been by and large responding to the RFID challenge. The likes of Provia, which have significant installed bases in retail and CPG sectors, have been leading the pack by developing the RFID interface to their applications, and by adding software modules or upgrading their products to cope with the serial numbers in RFID tags.
these effective albeit not necessarily neat solutions will still require suppliers
and retailers to deploy specialized middleware and hardware that manages the
huge amount of data coming from the readers. More proactive companies are thinking
about putting the right business intelligence (BI) and analytic architecture
in place to make the most out of RFID data and drive better supply-chain decisions.
Users should also check out these vendors' services at their labs that include
consulting and integration, as well as painstaking testing multiple vendors'
RFID equipment and hardware to simulate real world supply chain business processes.
Full and careful consideration should be given to vendors that have experience
laboring in trenches and that have done it many times before.
of the main obstacles is the lack of integration, since there is a dearth of
software tools from enterprise application integration vendors to get data from
RFID tags and readers into existing business systems, meaning that companies
are often forced to do expensive custom integration work. Together, with the
vendors, they will have to devise ways to filter out false or redundant reads
and pass on only useful information to enterprise applications. Managers will
have to devise policies on how much data to collect from RFID systems, which
signals to record, which to ignore and which to forward to a transactional system
or a person for an action. Such policies could eventually be coded into business
logic of SCE applications or some type of a business-rules engine, and then
enforced by middleware.
concludes Part Eight of an eight-part note.
One through Five detail recent announcements.
Six and Seven discuss the market impact.
One through Four were published between August 11 and 14.
Five to Eight were published August 18 to 21.