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RFID and Logistics: Four Trends You Need to Know

Manufacturing.net has an article about RFID and logistics trends that the author: Tom Singer advises us to be aware about.
So here are the four trends,
Trend One: The High Cost of Fuel

Improving the efficiency and effectiveness of transportation spending is a hot topic for logistics operations. Approximately 80 percent of North American freight expenditures are on motor carriers. Other transportation modes also depend on petroleum-based fuels. Trying to figure out ways to save on transportation, since oil prices have risen to record levels, will become critical.

Transportation spend is on the rise especially when manufacturing has been outsourced or offshored but the effect has been offset by the advantage of lower costs of production elsewhere. So the essential question is how long is the rising oil price as a trend going to last? Tim notes the following as well,

Carriers and enterprises operating private fleets will redouble their efforts on route and scheduling optimization.

And,

In the past few years, major supply chain software vendors have taken a new look at the Transportation Management System (TMS) marketplace. A new, web-based generation of TMS software is available…

Carriers have troubles, such as driver turnover, other than the high cost of fuel which they routinely pass through onto the shipper through the fuel surcharge. Private fleet owners have the option of hedging fuel contracts in the futures market for their operations and that would take care of that issue. The final point about TMS being available more widely than before misses the fact that TMS were in vogue long before oil began trending higher. From my personal experience, I see much about the way that TMS are used that leaves a lot to be desired. Nevertheless, the efficacy of a TMS is highly dependent on processes that precede it, in manufacturing, in scheduling etc. TMSs can only work within the constraints that has been decided long before the pallet becomes ready at the dock door and that is an illustration of local optimization against global optimization.

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About me

I am Chris Jacob Abraham and I live, work and blog from Newburgh, New York. I work for IBM as a Senior consultant in the Fab PowerOps group that works around the issue of detailed Fab (semiconductor fab) level scheduling on a continual basis. My erstwhile company ILOG was recently acquired by IBM and I've joined the Industry Solutions Group there.

@ SCM Clustrmap

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