Supply chain innovation

Citation

(2004), "Supply chain innovation", International Journal of Productivity and Performance Management, Vol. 53 No. 4. https://doi.org/10.1108/ijppm.2004.07953daf.006

Supply chain innovation

We all know (and love or hate) the Microsoft office family of software. Most of us are also aware of Microsoft’s operating systems and a number of their back office products. Fewer are aware of the Microsoft business software range.

For example, Microsoft is very active in the supply chain management (SCM) arena. Microsoft Business Solutions recently unveiled a pilot project it developed in alliance with KiMs, a midsize Danish manufacturer that employs 270 people and ships approximately 100,000 pallets of snacks per year.

This pilot project involves elements critical to automating a company’s supply chain, extending KiMs’ existing business solution (Microsoft Business Solutions – Axapta) in the areas of demand planning, event management, trading partner collaboration and hands-free warehouse management using radio frequency identification (RFID) technology, which combines silicon chip and radio frequency technology. The project, which went live at KiMs in late December 2003, was conceptualised, developed and deployed in three months.

KiMs, which has been in business for almost 40 years, has a product line that includes nine of the ten best-selling potato crisps in Denmark. KiMs is considered one of the five strongest brands in that country and won Denmark Brand of the Year in 2002. It implemented Microsoft Axapta in June 2003 for manufacturing, raw-materials procurement, sales order management and warehouse management, but wanted greater visibility into its supply chain, from suppliers through distributors. KiMs wanted to monitor pallets of finished goods as they moved out of production and into a third-party warehouse and greater knowledge of the exact location of products at various points in the supply chain, to increase product availability.

RFID, which can automate and streamline business processes in ways previously unimaginable, has been lauded by manufacturers and retailers for its potential to provide an unprecedented level of visibility across the supply chain and improve efficiency and profitability as a result. Together, these elements provide automation across the entire supply chain, giving the manufacturer or distributor greater visibility into the process and putting the power of automation in their hands.

Microsoft Business Solutions added RFID capabilities to its Microsoft Axapta Warehouse Management solution at KiMs to make it capable of capturing and managing data that is generated from the pilot. One of the partners involved, SAMSys Technologies Inc., had an engineering team on site to evaluate KiMs’ production cycle and bar-code system, then designed and supervised the hardware installation of a UHF RFID pallet tracking system within the finished goods area of the KiMs factory. The data from the SAMSys reader feeds directly into Microsoft Axapta at KiMs.

KiMs produces crispy snacks that are bagged, cartoned and loaded on pallets, which are then moved to a staging area to be picked up by trucks for delivery to a distribution centre. A unique identifier is written to the RFID tag on each pallet, thereby associating the pallet with comprehensive production data.

It was recognised that, in real implementations, customers may need to utilise the capabilities of writeable tags – though many companies settle for easier, read-only tags during the pilot phase. Another innovative element of this RFID pilot project is its use of the metal foil of the chips’ packaging as an element of the tag design. Typically, metal objects have been an impediment to the use of RFID. By treating the packaging as part of the RFID system, the tag could be made fairly simply, thereby keeping the cost down.

The tags are monitored at storage, loading and shipment, and the data is fed back into Microsoft Axapta. The solution is expected to offer near-real-time visibility into the location of products in the supply chain and the trimming of inventory levels at the distribution centre, due to increased data accuracy.

Microsoft partner Aston Business Solutions, which had done the initial implementation of Microsoft Axapta at KiMs in June 2003, played an integral role in this pilot, ensuring that advanced SCM functionality was properly integrated with the Microsoft Axapta platform and KiMs’ business processes. Other Microsoft partners involved in the KiMs project include Philips Semiconductors, providing the RFID chip solutions; Avery Dennison Corp., producing RFID tags; and SAMSys Technologies Inc., delivering hardware and consultancy for RFID.

More information about Microsoft Business Solutions can be found at www.microsoft.com/businesssolutions/