Easing Supply Chain Woes


How IoT-enabled tags drive value for vehicle processing centers and vehicle logistics companies

Vehicle processing centers (VPCs) and finished vehicle logistics providers rely on their ability to efficiently handle thousands of vehicles every week. This includes locating volumes of inventory across multiple, massive lots for processes such as accessory installation, quality auditing, battery charging, investigating any suspected manufacturing issues and retrieval for shipment. For the finished vehicle industry, locating inventory and assets is an age-old problem, but the recent supply chain woes that have resulted in inventory surges only amplified existing problems.

The semiconductor chip shortage, for example, has prevented many car manufactures from completing new vehicle. General Motors, for one, has 95,000 unfinished vehicles in storage. It’s no surprise companies from Toyota to Volkswagen are placing a greater focus on estimated time of arrival (ETA).

Technologies such as bar codes and RFID have typically been deployed to solve these challenges, but they have fallen short. Manual barcode scanning of inventory locations results in missed scans, inaccurate locations and bad or lost data. Moreover, the cost of these labor-intensive solutions is too high, as extensive deployments of scanners, readers and access points result in high costs of installation, maintenance and replacement. Add to this the frustration of inaccurate location data that leaves employees endlessly searching—fact that solutions like RFID and manual scanning don’t provide real-time, accurate location data. The vehicle is out there, but where exactly?

Vehicle process and logistics operations are further burdened by the rapidly rising cost of labor spurred on by lower unemployment and rising minimum wage rates. Meanwhile, customers are benchmarking vendor performance on processes. Without metrics and alerts, poor employee productivity and inefficient processes drag down business performance, leaving an open door to errors, delays and poor ratings from potential customers.

Until the recent maturation of Internet of Things (IoT) technologies, there was no cost-effective alternative. Now, smart, small hardware-based tag solutions that get placed in the vehicle are enabling real-time GPS location readings every time a vehicle is moved. Some of the most advanced solutions incorporate an innovative wireless protocol that enables long-range communication of up to two miles with the company’s gateways. Triggered by the tag’s accelerometer, the system requires minimal infrastructure that can be deployed quickly and inexpensively. Every time a vehicle moves, even if it’s from one row to another, the tag will take GPS readings and then communicate them over a wireless network to a gateway.

Some platforms also provide more advanced analytics and application features to assist in streamlining operations. IoT-enabled tracking tags can improve visibility on finished vehicle movements, particularly when a digital map is provided that includes dots representing where the vehicles are located and a directional indicator on how to reach them. The device allows the vehicles to self-report geolocation data, eliminating the error-prone human element. This ensures vehicles are staged and shipped, complete and on time, with the ability to trigger alerts when unexpected vehicle movements occur.

Hyundai Glovis, for example, used the technology at its 2,200-acre Kia plant in West Point, Georgia, which operates the VPC that receives more than 1,000 new cars every day. Before implementation, moving cars through the plant processes normally involved having to move them as many as ten different times on average. Manually scanning vehicles to record their location in the yard had the highest turnover of any position, as it was one of the most physically demanding jobs. Personnel using manual scanners often walk 10-12 miles (16-19km) per day, and typically in extreme weather conditions. Moreover, this method made it difficult to hold accurate data since the location is only as good as the last time it was visited by a scanner. As soon as it moves, it’s lost. Hyundai Glovis reported that more than 20 cars a day were designated as missing using the manual scanning method.

Some of the vehicle tracking alternatives the vehicle processor looked at included cellular-based solutions that were prohibitively expensive, as well as other options requiring attachments to the vehicles that were inefficient and costly to manage. Some required an extensive infrastructure of wireless access points and other devices. After deploying the tags, every time a vehicle moved, a real-time GPS reading was communicated over a proprietary wireless network. All an employee needs is a smartphone and an application to search for vehicles. Tags can have a wide range of search attributes, including VIN number, model and manufacturing date. The result is a map displaying the exact location in the yard.

Since deployment, Hyundai reports that at least nine fewer personnel are needed to scan the yard full-time. This frees them for more important tasks. Reports from the processor’s Process Improvement Group in California also show that significant improvements have been made in the VPC’s cycle times (the time it takes to retrieve a vehicle from its storage location and get it to the point needed for processing.) Further, the assembly plant also benefits from the solution. Should there be a suspected issue with a manufacturing process or vehicle component, all affected vehicles must be located and checked in storage lots. With the ability to quickly locate groups of specific vehicles, the timeframe to process and close out these plant quality sorts has been reduced from weeks down to a matter of days.

True, real-time inventory tracking can transform supply chain operations even in the most difficult circumstances by providing the data-driven insights needed for decisions that unleash value. Given the current climate and the road ahead, there may be no better time than now to invest in these new technologies.


About the author: Adrian Jennings is the Chief Product Officer at Cognosos. Whether working in technology evangelization or crafting product and market strategies, Adrian always looks to find the simplest paths through complex change. Over the years, he has helped enterprises prepare products years in advance for nascent markets, adopt digital transformation solutions and carefully construct long-term roadmaps. Before Cognosos, Adrian already had over ten years of experience in the RTLS industry, having worked for Ubisense, first as VP of Industry Strategy, outlining and driving digital transformation strategies, including go-to-market ones for the company’s latest products. Adrian later became VP of RTLS Technology, functioning as a consultant to the sales team and customers to help define digital transformation strategies. Before Ubisense, he spent a decade at Time Domain Corporation, first as a Technologist, then P&L Manager, Product Manager and finally CTO. Prior to these roles, Adrian served as a rocket scientist at Her Britannic Majesty’s Ministry of Defense, UK. He holds a MA in Physics from the University of Oxford.

Edited by Erik Linask
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