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WP 2002-003
Agile inventory management
Incorporating wireless technology:
Warehouse scenario and
network topology
V. ZEIMPEKIS & G. M. GIAGLIS
{vzeimp, giaglis}@aueb.gr
For more information please visit our site at: http:// www.eltrun.aueb.gr
Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
1 INTRODUCTION
Uneven demand, more frequent and shorter order-to-shipment times, and stricter
customer compliance requirements are the key parameters shaping twenty-first-century business
practices (Kalakota et al., 2001). As a result, companies are re-examining their business
processes from a business-to-business (B2B) commerce perspective in an effort to be more
effective and efficient. Such an evaluation has the potential to transform a company’s supply
chain practices from a group of unplanned and fragmented processes into an interconnected
system capable of delivering value to the customer.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
Traditionally, supply chains created value through efficiency and low price. Today,
however, supply chains have to create value through their flexibility. Their design must
accommodate a customer changing their mind after the order is placed so that the company
retains control of the manufacturing and fulfilment processes.
One of the most important trends that impacts supply chains is inventory management in
warehouses. Under today’s current practices, product information, storage and delivery are
handled in warehouses and distribution centres, by using paper-based techniques or in the best of
the cases wired hand-held scanners. However, the need for faster and more accurate fulfilment is
transforming rapidly supply chain coordination and the way inventory management is organized
in a warehouse facility. For that reason, new tools and a new type of inventory/warehouse
control is needed. Wireless technology can play a pivotal role in this emerging issue by enabling
real-time inventory management systems.
The basic aim of this paper is to investigate the impact of wireless technology in
inventory management. For that reason, the structure of the paper is organised as follows:
Section 2 introduces the current practices of inventory management and underlines the major
problems that a warehouse manager face. Section 3 focuses on the wireless systems which can
act as facilitators for wireless inventory management. A hybrid wireless system is proposed,
which incorporates two systems (W-LAN, Indoor GPS) for the core network of the warehouse
and two devices (RF-ID, PDT) which can be used as an access medium to the network. Section
4, presents a proposed warehouse scenario where the use of the previously analysed wireless
systems takes place. Finally, the paper ends with useful conclusions and suggestions for future
research.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
location. If the storage modules (e.g., pallets, totes or cartons) for internal use differ from the
incoming storage modules, then the loads must be reassembled. After this, the loads are
transported to a location within the storage area. Some hours later, the operators will have
manually to key in the temporary holding location for the pallet data that was entered.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
! The lack of ability to verify (in real-time mode) the quantity of received goods.
! The need for label generation (every time a product arrives) which must be attached to
each load indicating its assigned location.
! The “blind” periods where the central database system does not know the actual available
locations for pallet assignment.
! The fear for lift drivers to mis-locate pallets due to the lack of real-time verification of
the item and its location.
! The “blind” periods, where information about product details/location are not keyed in
the system.
! The lack of real-time connectivity between the information system (IS) of the warehouse
and the IS of customer or vendor.
! The inability for the warehouse system to always monitor where each product is, inside
the warehouse (for the case where some of them must be reallocated in different places).
! The inability of the central warehouse system, to provide accurate, real-time information
to the operators about the processes that must be done (e.g. the generation of a put-away
list, indicating the warehouse storage location, which can be automatically transmitted it
to the appropriate forklift operator) when a product is ready for shipping.
Hence, we may subdivide the activities in a warehouse, where problems can occur, into
four categories: receiving, storage, order-picking and shipping. A study in the United Kingdom
(Drury, 1988) revealed that order-picking is the most costly among these activities (figure 2).
More than 60% of all operating costs in a typical warehouse can be attributed to order-picking.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
The system that we propose for an agile inventory management in a warehouse consists
of a hybrid wireless network. The latter embraces two main parts: the core network and the
access medium.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
! Installation speed and Simplicity: Installing a wireless LAN system can be fast and easy
and can eliminate the need to pull cable through walls and ceilings.
! Reduced Cost-of-Ownership: While the initial investment required for wireless LAN
hardware can be higher than the cost of wired LAN hardware, overall installation
expenses and life-cycle costs can be significantly lower. Long-term cost benefits are
greatest in dynamic environments requiring frequent moves and changes.
! Scalability: Wireless LAN systems can be configured in a variety of topologies to meet
the needs of specific applications and installations. Configurations are easily changed and
range from peer-to-peer networks suitable for a small number of users to full
infrastructure networks (suitable for inventory management) that enable roaming over a
broad area.
Wireless LANs can be simple or complex. At its most basic, two PCs equipped with
wireless adapter cards can set up an independent network whenever they are within range of one
another. Installing an Access Point (AP) can extend the range of an ad hoc network and
effectively doubling the range at which the devices can communicate. In the wireless LAN
architecture which we propose for warehouse inventory management, it is necessary to install
more than one access points in order to succeed in having full coverage of the area. In addition,
the local network should be enforced by Extension Points (EP), whose main function is to extend
the range of network by relaying signals from a client to an AP or another EP.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
as altitude aiding are used. The signal generated by the pseudolites is monitored by a number of
reference receivers (Pateli et al, 2002). The proposed Indoor GPS architecture that can be
suitable for wireless inventory management in a warehouse is illustrated in figure 2.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
specific components to fulfil their own order schedule, such errors can have a serious
impact on customer satisfaction.
! Minimising inventory: The widespread introduction of just-in-time retailing has enabled
retailers to reduce their stock levels but distribution companies now hold increased
quantities of just-in-case, or buffer stock, to ensure they can meet retail demands.
Improvements in supply chain visibility based on accurate, up-to-date information will
aid the reduction of these buffer stocks.
Portable data terminals (PDTs) with integrated hand held bar code readers or scanners
collect data and information in remote or off-site locations. PDTs are used when information at
various locations must be collected and it is either too costly, error prone, or difficult to perform
at or near a host computer. Some examples of tracking applications that require the use of PDT
data collection devices include warehousing and inventory, asset tracking, and field service.
PDT's can be custom configured and programmed for various applications but the most common
configuration is as follows: The main display menu will provide options to choose from. When a
selection is made usually the first prompt will be “user” (who is doing the scan), followed by
“location” (where is the scan occurring), and finally “item” (what item is being scanned). If it is
an inventory application the user is also prompted for “quantity” (how many items). The data can
be entered via the keypad or by scanning (reading) bar codes. As PDTs are RF-enabled, the
system is updated instantly in real-time. However, most applications work well with "batch" data
collection and "batch" PDT's: after all necessary data and information is collected and scanned,
the data is later uploaded into the host computer, which updates the tracking software. The
uploaded files can be transferred into an ASCII file, Excel spreadsheet, or directly into a tracking
software package.
Wireless inventory management can be implemented through PDTs because the latter
are:
! Convenient: There is now no need to run cables through walls, over ceilings and under
floors to connect computing or bar coding equipment. PDTs penetrate walls and floors
made with steel studs and reinforcement.
! Versatile: By using PDTs there is the ability of sharing data and transferring files in real-
time mode. PDTs can also be connected in multiple computers, to a printer or other
peripherals.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
! Flexible: PDTs provide a wireless point-to-point link for fast error free data transfer-even
if separated by walls and floors-at a speed of up to 38.4 KBits. The range is over 200 feet
inside an office or a warehouse and up to 1800 feet in open areas with no obstructions.
With 20 channel pairs, additional units can be used as transponders to further extend
range.
! User friendly: PDTs are easy to be used and can be connected to any device with a
standard RS-232 or keyboard port. No technical training is necessary beyond knowledge
of standard communications software for serial file transfers.
! Portable: PDTs have the ability to use rechargeable batteries which, can provide a lot of
hours of mobile access (during the scanning period) to the main database (i.e. ERP)
system.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
The bar-coded pallet label (can be also an RF-ID), in conjunction with the central
database records, contains all the data necessary to control the status and movement of the pallet
through the warehouse. The lift truck driver receives wirelessly put-away instructions about the
incoming pallet from the AWCS. These instructions direct the movement of the pallet to a
specific rack location. The driver uses a PDT to scan the label on the pallet and the label on the
rack and the AWCS verifies that the transaction is correct (this can be done also automatically if
the pallet has an RF-ID).
When retrieving the pallet for the picking operation, its number and location are given to
the driver via the PDT terminal. By scanning the bar code label on the pallet and the bar code on
the rack position, if the transaction is correct, a confirmation signal is given and the driver
delivers the pallet to the order filling area (this can be done also automatically if the pallet has an
RF-ID). On the shipping dock, the load identification bar code is scanned or transmitted
automatically if an RF-ID is used, which identifies and transmits the data about the contents of
the load into the customer order file in the AWCS. This information joins all related detail
transaction information to make the final dispatched notification to the customer.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
5 CONCLUSIONS
One of the basic business trends that are impacting contemporary supply chains is
inventory management in warehouses. Current warehouse inventory practices incorporate
fragmented processes, which lead in many unnecessary handoffs or additional process steps,
resulting in inefficiency and increased cost. The need for faster and more accurate order
fulfilment is thus transforming current inventory management coordination. In order to improve
this coordination, new tools and a new type of inventory management is needed.
This paper aimed to propose a hybrid wireless system, which enables the
transmission/reception of real-time data (i.e. product information/location) through a wireless
inventory management system. In order to achieve that, various wireless systems have been
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
used. In first instance, W-LAN and Indoor GPS have been used as the core network, which is
responsible for the management of the information. The access mediums that were proposed
consisted of RF-IDs and RF-enabled PDTs.
By implementing a system like this, warehouses will be able not only reduce inventory
costs, but also improve the efficiency of the order-picking operation within the warehouse (Van
de Berg, J.P et al., 1999). Furthermore, an effective wireless storage location policy may reduce
the mean travel times for storage/retrieval and order-picking.
The need for wireless inventory management clearly indicates that a further research
which focuses on the mutual relations between warehousing and inventory management is
necessary. An in-depth investigation of the impact of new technologies in warehouse inventory
management can lead in numerous advantages which will affect not only the end customer but
the enterprise itself. Facing thus future markets trends, in particular the increased use of wireless
systems in supply chain management may raise some new research agendas in the area of
inventory and warehouse marketing.
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Agile inventory management incorporating wireless technology:
Warehouse scenario and network topology
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