Reliability Rules, Even as Uses and Devices Evolve...Scanning accuracy, ruggedness and durability, communication capabilities within warehouses and DCs, and operational uptime lasting

Mobile Solutions for Material Handling:Reliability Rules, Even as Uses and Devices EvolveRESEARCH BRIEF

MAY 2015

Mobile Solutions for Material Handling:

Reliability Rules, Even as Uses and Devices Evolve

2 SUPPLY CHAIN SERVICES and HONEYWELL SCANNING AND MOBILITY • WWW.SUPPLYCHAINSERVICES.COM

BackgroundIn today’s supply chains and within the facilities responsible for moving goods and fulfilling customer orders, accuracy and uptime are everything. If a customer order is wrong, or falls behind on promised delivery dates because of a downtime issue with devices or systems, and customers will turn to other sellers and may never come back. That’s why characteristics like reliability, accuracy, and ruggedness top the list of qualities that supply chain professionals want to see in the mobile devices they rely on for order fulfillment.

A recent study conducted among manufacturing, distribution, logistics and warehouse managers by Peerless Research Group on behalf of Modern Materials Handling for Supply Chain Services and Honeywell Scanning and Mobility, reveals that rugged devices are most suitable for use in warehouses and distribution centers (DCs), as well as in manufacturing facilities and for most logistics operations. As usage and investments in mobile and wireless technology increase, and the labor force becomes accustomed to using smart phones and other consumer-grade mobile devices in their personal lives, there may some desire to adapt consumer devices to tasks within warehouses and DCs. But the recent survey shows that when it comes to mobile computing in industry, users want and need ruggedness and reliability, as well as scanning speed and accuracy. Consumer-grade mobile devices may have their place in customer-facing applications such as field sales, but when it comes to the full range of mobile devices for industry, rugged solutions are the most popular option. In fact, 81 percent of respondents to the recent study ranked ruggedness as an “extremely important” characteristic for a data collection device, matched only by scanning accuracy.

The study indicates a strong willingness among respondents to leverage the tablet form factor, but as

a “rugged” variant. The research also indicates mobile solutions for the supply chain will evolve and expand into new applications such as labor management and quality management—tasks that tend to involve more interaction with a graphical user interface and less scanning, but still call for device durability and scan capability. Overall, a significant finding is that the need for mobile computing devices is expected to increase, with 64 percent of respondents saying they plan to increase investment in data collection technologies over the next two years. So expect growth and evolution in mobile solutions for the supply chain, but with a continued preference for reliability so that operational tasks aren’t slowed down or compromised.

Usage and Adoption of Mobile Devices and Applications

Mobile data collection solutions are becoming more widespread to help manage distribution, production and logistics processes in warehouse and manufacturing environments. Nearly three out of four operations in our survey now use mobile/wireless solutions for warehousing applications. However, logistics and transportation have curiously failed to recognize the benefits. Those not using mobile devices for applications in these environments either believe that the hardware is too costly or that the TCO for these products is not equitable. Some further fail to see process and productivity advantages, or they perceive security risks, so much so that they are slow to embrace mobile technology. However, overall, mobile computing solutions are widely accepted in settings such as warehouse operations (71 percent), while use of mobile devices is expected increase significantly for applications such as labor management. Mobile devices are further considered highly acceptable and applicable for shipping, dock and yard procedures. (See chart on page 3).

Mobile Solutions for Material Handling:Reliability Rules, Even as Uses and Devices EvolveIndustry survey finds that supply chain professionals foresee growing

investment in mobile solutions and greater use of newer form factors such

as tablets and mobile barcode printing, but retain a strong preference for

reliability and ruggedness for the devices and systems they put in place.

SUPPLY CHAIN SERVICES and HONEYWELL SCANNING AND MOBILITY • WWW.SUPPLYCHAINSERVICES.COM 3

Mobile Solutions for Material Handling:Reliability Rules, Even as Uses and Devices Evolve

Scanning accuracy, ruggedness and durability, communication capabilities within warehouses and DCs, and operational uptime lasting for a full shift are the features and functionalities that are highly important when evaluating mobile data collection devices for possible purchase. In fact, 99 percent view ruggedness as the top criteria.

Major areas in which mobile/wireless solutions are used

Warehouse operations

Shipping, receiving, dock and yard

Manufacturing plant

Distribution center

Logistics

Transportation/Freight/Fleet

71%

61%

39%

38%

27%

21%

Characteristics considered importantwhen evaluating data collection solutions

Scanning capabilities/Scanning accuracy

81% 15% 4%

Ruggedness/Durability

81% 18% 1%

76% 20% 4%

74% 25% 1%Device is operational for a full 8 hour shift

63% 29% 8%Compatibility with ERP platform and applications

62% 35% 3%Total cost of ownership (TCO)

46% 46% 8%Operating platform

46% 46% 8%Breadth of features (bluetooth, voice command, camera, WIFI networking, etc.)

23% 55% 22%Have experience with their products

Extremely/Very importantExtremely/Very important Somewhat importantSomewhat important Not very/Not at all importantNot very/Not at all important



In general, most users seem satisfied with their current data collection devices. However, methods can be improved as one out of three contends they’re neither satisfied nor dissatisfied or, of greater consternation, are fully unhappy with their current solutions.

Level of satisfaction with current data collection technologies

Very satisfied 16%

Satisfied 48%

Neither satisfied or dissatisfied 25%

Dissatisfied 9%

Very dissatisfied 2%

“We’re looking to improve our scanning and processes to avoid human error.”

—Supply Chain Management; Transportation & Warehousing

Services; Annual revenues- $250M - $500M

The “word cloud” on the right, displays the results of an open-ended question about what respondents replied they were interested in improving about the mobility solutions. It visually highlights, in free-form, key words through the use of font size and color to convey relative importance. This ‘word cloud’ illustrates such highpoints as mobile data capture, ease of use, data accuracy, rapid scanning capabilities, and better use of the data collected from mobile devices as areas materials handling managers are looking to improve. Survey findings further suggest wireless devices as solutions to tackle these tasks.

Stationary barcoding printing is the most common data collection technology now in use. Scanning devices, 1D linear barcode and fixed mount scanners, and phones, PDAs and tablets are also commonly used tools for jobs in DCs and manufacturing facilities.

Over the next two years durability will become increasingly critical as devices such as industrial grade tablets will grow in popularity. Stationary barcode and mobile barcode printing devices will also be regularly adopted or upgraded. Greater expected use of industrial-grade tablet computers is consistent with interest in applications such as workforce management and asset management that involve managers or supervisors who interact with applications outside the normal office setting. Greater use of mobile barcode printing, meanwhile, is consistent with some of the flexibility requirements brought about by omni-channel, such as quickly setting up more pack lanes or pack/ship stations. Mobile barcode printing also has the advantages of powerful and fast improvements in productivity and accuracy. Interestingly, voice and light applications do not appear to be living up to their promise or have very narrow niche applications. (See chart on page 5).



As validation that mobile/wireless data collection is becoming increasingly more significant, two out of every three organizations we surveyed claim they’ll be expanding their usage and boosting their investments in data collection methods over the next two years. Only 3% predict usage of these technologies will drop.

Level of investment in data collection technologies in next two years

Increase 64%

Decrease 3%

Will stay the same 33%

In use

Will adopt/upgrade/buy

In use

Will adopt/upgrade/buy

Data collection technology currently:Current usage/Plans for adoption/Upgrades/Purchase

Stationary barcode printing

1D linear barcode scanning

Fixed-mount scanners

Consumer-grade phone, PDAs or tablet computers

Vehicle mount computers

Mobile barcode printing

RFID (Radio Frequency Identification)

Rugged mobile computers

2D area imaging barcode scanning

Industrial-grade tablet computers

Wearable computers with ring scanners

Voice-directed picking

Pick-to-light

53%42%

39%17%

35%20%

32%29%

30%26%

29%36%

28%32%

28%28%

25%23%

21%37%

19%18%

14%15%

11%8%



Wireless solutions are primarily being used for inventory management tasks such as tracking, barcoding, picking and put-away processes. In addition mobile solutions are handy for yard and dock applications such as shipping and receiving. The research also indicates strong uptake over the next two years for applications such as labor/workforce management, quality control, and asset management. This finding indicates a willingness to leverage rugged mobile devices for new applications which tend to be less scan intensive than tasks such as put-away in a warehouse, but require ruggedness and reliable scanning coupled with a form factor well suited to navigating through a more complex software application.

Now using devices for

Implementingin next 2 years for

Now using devices for

Implementingin next 2 years for

Applications for which mobile/wireless devices are used:Now and in two years

Inventory tracking

Receiving

Shipping

Barcoding

Picking

Put-away

Real time locating

Item, pallet or container level tagging

Auditing

Quality control

Cross docking

Labor, workforce management

Asset management

RFID

WIP

As a reader of QRC codes or EPC tags

Other

58%51%

58%51%

56%50%

51%33%

49%44%

45%29%

34%35%

29%28%

24%25%

24%30%

20%22%

19%36%

17%25%

16%22%

16%22%

4%6%

4%6%

“ We’re working to get our order generation and transmission compatible with our ERP.”

—Executive Management; Distribution; $100M - $250M

“ We need to be able to scan packages as they arrive, and have both the sender and recipient automatically uploaded into a searchable database.”

—Logistics Management; Fabricated Metals;

$100M - $250M



Automating Warehouse, Logistics and Manufacturing Processes

While wireless devices are being utilized for many distribution center, logistics and manufacturing tasks, only a very few organizations have applications that are fully automated. Functions such as picking, receiving, shipping, and inventory management are the procedures that are most commonly automated, either in their entirety or partially.

Yet, many processes are being considered for upgrades. Asset and labor tracking, replenishment and traceability will receive the most attention in the upcoming months. While respondents were not asked to explain the drivers behind these new areas for automation, requirements such as “chain of custody” tracking and becoming more agile in terms of adjusting to omni-channel pressures carry within them a mobility requirement in that the use of supporting management applications can’t be tethered to an office. It needs to be fully accessible out on the front lines where orders are being fulfilled and labor and production processes are being adjusted.

Level of automation on key materials handling and logistics tasks

Picking

Receiving

Shipping

Physical inventory

Traceability

Put-away

Replenishment

Delivery

Production line automation (WIP)

Sorting

Point of sale

Asset tracking

Labor tracking

Cross-docking

Field sales

Field service

18% 39% 17% 15% 13%

15% 43% 19% 17% 6%

15% 44% 20% 14% 7%

14% 43% 21% 14% 8%

13% 33% 23% 15% 16%

11% 36% 21% 18% 14%

10% 32% 24% 18% 15%

9% 26% 19% 23% 23%

9% 22% 22% 19% 29%

9% 19% 19% 25% 29%

7% 8% 16% 19% 50%

6% 23% 26% 23% 22%

6% 29% 27% 17% 21%

6% 19% 20% 21% 34%

4%4 15% 15% 23% 44%

4%4 12% 14% 25% 45%

FullyautomatedFullyautomated

PartiallyautomatedPartiallyautomated

No plansto automateNo plansto automate

NotapplicableNotapplicable

Not now auto-mated but willbe automating

Not now auto-mated but willbe automating

“ We are looking to upgrade data entry from forklifts, weight taken at forklift, and wireless communication within our factory.”

—Production Manager; Primary Metals; < $50M



Types of Mobile/Wireless Devices in UseDevices for mobile computing processes are growing in popularity for use in work environments presenting harsh work conditions such as warehouses and manufacturing facilities. About three-fourths of those we surveyed are now using devices equipped to withstand extreme situations, drops, vibrations, exposure to moisture or chemicals, etc. These units possess robust capabilities and features which include quick and accurate barcode scanning, advanced wireless connectivity and enhanced security performance. These rugged devices maintain a long battery life and in the event of a malfunction, can also be repaired. Nearly one half (48 percent) also use consumer grade systems. Of these, some operations rely heavily on these less durable devices or use them along with rugged mobile units.

Types of mobile devices in use

Most devices are consumer-grade (Apple’s iPhone, iPod, iPad, or Android-

based consumer tablets or smartphones) 28%

Most devices are rugged or more durable than consumer-grade devices 49%

We use a mix of both consumer-grade and rugged 20%

Other 3%

Bar code scanning velocity by type of device

55%

20%

Low frequencyof scanning barcodes

45% 46%

Medium frequency ofscanning barcodes

0%

34%

High frequency ofscanning barcodes

Most devices are consumer-grade Most devices are rugged or moredurable than consumer-grade devices

“ We are presently using laptops but want to migrate to a smaller more rugged machine. We’re also investigating pick to voice.”

—Warehouse/DC Management; Medical Equipment Manufacturer;

$500M - $1B

“ Our equipment must be rugged. Dust is the enemy!”

—Project Manager; Warehousing Services:

$50M - $100M

Most consumer-grade devices are predominantly used for low frequency scanning applications while rugged devices are being employed for high frequency scanning barcodes.



Rugged mobile devices are considered more suitable in warehousing and manufacturing operations. At these locations, this type of equipment is largely used for procedures such as shipping and receiving, and for inventory applications involving stock management, picking, put-away, and receiving. Consumer-type devices are mostly being used for field sales operations and labor tracking and other applications outside of harsh working conditions.

Applications of rugged and consumer mobile devices

Consumer

Rugged

Consumer

Rugged

Receiving

Shipping

Picking

Physical inventory

Put-away

Delivery

Replenishment

Production line automation (WIP)

Sorting

Cross-docking

Labor tracking

Asset tracking

Field service

Point of sale

Field sales

32%72%

33%70%

24%68%

41%68%

27%63%

30%45%

34%43%

28%42%

26%38%

23%37%

49%31%

39%27%

37%25%

36%18%

50%14%



A failure to employ tenuous equipment can result in process downtime. Attributed failures can be uncompromising and lead to productivity setbacks, worker frustration, incurrences of unnecessary costs, supply chain disruption, trading partner penalties, damage to company good will, and customer dissatisfaction.

Total Cost of OwnershipMost organizations in our study evaluate the total cost of ownership of their mobile solutions. The initial price as well as replacement cost of the device, frequency of replacement, and productivity levels head the list of many factors users consider when gauging the total cost of ownership (TCO) of mobile/wireless devices.

Impact of downtime

72%

72%

49%

39%

35%

34%

4%

Frustrated employees

Loss of productivity

Increased costs

Loss of control over inventory

Dissatisfied customers

Late or incomplete shipments

Other

69%

62%

61%

59%

59%

56%

47%

45%

38%

34%

32%

3%

6%

44%

39%

Initial cost of device

Uptime/downtime

Cost to replace

Frequency of replacement/Durability

Level of productivity/Lost productivity

Programming/IT costs

Speed of scanning

Breakage

Application development costs

Warranty

Customer service

Rugged accessories

Barcoding accessories

Other

We don’t evaluate TCO

Factors taken into account when evaluating TCO of mobile devices



Nearly all of those surveyed assess the Total Cost of Ownership of rugged devices used in materials handling operations and heavily weigh numerous factors when assessing the TCO of rugged devices versus those that are consumer-grade. While cost of the unit and replacement costs are key variables when considering the TCO of both rugged and consumer tools, numerous considerations including productivity, uptime/downtime, durability, IT-related expenses, scanning speed, app development, required accessories, and warranty are each taken into account when calculating the TCO of rugged devices.

Total cost of ownership: rugged and consumer-grade devices

Most devices are rugged or moredurable than consumer-grade devices

Most devices are consumer-grade

Most devices are rugged or moredurable than consumer-grade devices

Most devices are consumer-grade

Initial cost of device

Level of productivity/Lost productivity

Uptime/downtime

Frequency of replacement/Durability

Cost to replace

Programming/IT costs

Speed of scanning

Application development costs

Breakage

Rugged accessories

Warranty

Customer service

Barcoding accessories

Other

We don’t evaluate TCO

71%66%

68%51%

68%44%

65%49%

63%56%

63%44%

51%34%

49%39%

47%42%

40%20%

40%29%

35%42%

33%22%

3%0%

3%12%



SummaryWith a solid majority of respondents reporting greater investment in mobile solutions over the next two years, and new applications for mobile devices on managers’ agendas, there is little doubt we are seeing rapid growth and evolution in the use of mobile devices across many disciplines in supply chain operations. Companies indicate a willingness to apply mobility to new applications and areas of automation, and to expand their current use of form factors such as tablets. However, the need for reliability and ruggedness remains constant. Materials handling, logistics and supply chain managers care about the initial cost of mobile solutions and see the price point for devices as a key factor. However, they also rank uptime and durability highly as part of their TCO equations. When combined with the two characteristics ranked most important for mobile solutions—scanning capability/accuracy, and ruggedness/durability—it’s apparent that the evolution into new use cases for mobility in the supply chain will not compromise long-standing priorities for reliability and performance. The trend of “consumerization of IT” may be changing the mix of device types and applications for mobile solutions in the supply chain, but there remains a strong preference for industrial grade solutions that won’t place productivity or customer satisfaction at risk.

MethodologyThis research was conducted by Peerless Research Group on behalf of Modern Materials Handling for Supply Chain Services, Inc. This study was executed in April, 2015, and was administered over the Internet among subscribers to Modern Materials Handling magazine.

Respondents were qualified for being involved in decisions regarding the evaluation and purchase of mobility, data collection or wireless solutions for use in warehousing, logistics, distribution, or manufacturing operations. The findings are based on information collected among 237 top materials handling managers who qualified for the study.

Respondents’ principal job responsibilities are warehousing and distribution center management (22%), logistics management (14%), supply chain management (13%), materials handling management (18%), IT (7 %), and planning and operations (6%). Two-thirds of those surveyed work in manufacturing which included food and beverage, pharmaceuticals and chemicals, automotive, fabricated and primary metals, and computers and electronics. One-third are employed in non-manufacturing businesses such as wholesale and retail trade, and transportation and warehousing services. Companies of all sizes are also well-represented: 43 percent are employed in companies reporting under $100 million in annual revenues, 24 percent are from mid-size companies while 33 percent are in organizations having $1 billion or more in revenues.

About Supply Chain Services, Inc.Supply Chain Services is a nationwide provider barcoding and data collection solutions to manage product movement and delivery. We are experts in data collection technology, working to provide knowledgeable sales and information technology (IT) staff, lending expertise to the industry and staying on top of the latest technology trends. Our customer relationships are built on understanding business needs and applying appropriate technology and automation solutions—incorporating barcode scanners, barcode printers, rugged mobile computers, barcode labels, and wireless networking as well as consulting, project management, training, deployment, support desk, repair and depot services to warehousing, logistics, delivery, manufacturing, and distribution organizations.

About Honeywell Scanning and MobilityFrom the point-of-manufacture to the point-of-sale, every second saved matters. Honeywell delivers those matters. Honeywell delivers those critical seconds in three ways. First, we combine advanced imaging technology and processors—purpose-built for industrial tasks, with powerful wireless communications and support services. Second, we apply four decades of experience studying supply chain workers to our devices, ensuring optimal user experience proven to increase productivity. Third, we make sure our technology is born rugged to withstand the toughest environments. Honeywell is also the only manufacturer in the AIDC industry with both a fully rugged solution and an Enterprise Sled for Apple devices, meaning that as the trends discussed in this white paper mature, Honeywell will be there with the industry’s best solutions.

Contact Information:

Supply Chain Services 7800 Third Street North, Ste 920 Oakdale, MN 55128

(866) 205-4310

[email protected]

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Reliability Rules, Even as Uses and Devices Evolve...Scanning accuracy, ruggedness and durability, communication capabilities within warehouses and DCs, and operational uptime lasting