QuickREAD

February 21, 2007

The Many Uses of RFID at Dow Chemical
"One use is with our rail cars," says Dave Asiala, shared services IT director at Dow Chemical. "Rail cars have been using some form of passive RFID technology for the last 15 years, usually in a 'last seen' function -- that is, it can track where the car last registered in the system. We own about 2,600, and have outfitted two fleets of rail cars and are outfitting two more with a GPS device and an RFID sensor unit to help us monitor the 20 percent of shipments that are hazardous materials.
"What we are doing is augmenting the last-seen capability with real-time polling capability. In case of an accident, we want to use information like the environmental condition of the car to help first responders.
"Our current safety performance with our assets is 99.97 percent incident-free. The technology we are putting in now will take us beyond that.
"There are smaller-use cases too. For instance, Dow Chemical employees have badges equipped with passive RFID tags. The readers at our facilities around the world will grant access based on the user's profile. We can use the badge globally. I used mine in Brazil recently, for example.
"Other examples include pipelines that send out remote signals when repairs are needed, and equipping intermodal shipping containers with active RFID tags."
Source: CRM Buyer, http://crmbuyer.com

It's Wal-Mart, Not Value, that Says You Must Use RFID Tags
At the beginning of 2006, breakthroughs in tag production to reach the magical "five cents per tag" were predicted to create a boom in tag demand. Although tag prices are now routinely fewer than 10 cents per tag (averaging around 7.5 cents,) the total number of case and pallet tags reported sold in 2006 was 200 million. This works out to a few hundred thousand per each participant in the Wal-Mart mandates. If you include the other retail mandates (Target, Best Buy) the average tag-per-vendor count decreases even further. This reflects the reality that tag use is driven by mandates from the big retailers, not from the value proposition to the rest of the supply chain.
Source: Industry Week, http://industryweek.com

SaaS: User Satisfaction Down from a Year Ago
User satisfaction with software-as-a-service is starting to slip, but customer interest in this method of outsourcing IT functions is continuing to grow, according to survey released by the Cutter Consortium, an IT research and analysis firm.
"We believe our latest survey clearly shows that SaaS will become a dominant force in 2007," writes report author Jeffrey Kaplan.
Eighty-eight IT professionals within end-user organizations responded. Thirty-one percent were already using software-as-a-service, the same as in the previous year's survey, but another 43 percent are now considering it, up from 34 percent the previous year.
Kaplan found satisfaction rates of 90 percent among users last year, and 80 percent this year.
The diminished satisfaction represents a "warning sign for both users and vendors," he says. Users need to make sure they don't have unrealistic expectations, and must evaluate the capability of vendors before selecting a service, he says.
Source: CRMDaily, http://www.crm-daily.com

SaaS: It's Essential to Your Business Strategy
It looks like 2007 is going to be a great year if you want to save on IT costs. Every vendor worth its R&D budget is coming out with a software as a service (SaaS) offering, or enhancing an existing one. Or starting an entirely new SaaS company. The upshot is simple: SaaS isn't just here to stay, it should become an essential part of your strategy. The only questions are when and how much?
Source: Managing Automation, http://www.managingautomation.com

Aberdeen: Automating 'Extended' Warehouse Is Crucial for Success
Automating the extended warehouse is a key to success, according to a recent Aberdeen Research report. The findings of the report show that while functional silos continue to be the largest barrier to extended warehouse management performance, best-of-class companies are chipping away at those silos.
"While automation in the dock and yard has proven a building block to better operation, those technologies alone no longer serve as a predictor of top performance," says Jeff O'Neill, director of research development at Aberdeen, who authored the report. "What is proving a boon for companies is automation in extended processes, such as returns management, distributed order management and visibility."
Source: Modern Materials Handling, http://www.mmh.com

Compliance with European RoHS Law Doesn't Guarantee Compliance with China's
Electronics buyers who think their companies' products will automatically comply with China's new Restriction of Hazardous Substances law because their products already comply with the European Union's RoHS legislation are in for a big surprise.
"The materials that are restricted by the two laws are the same, but that's about where the similarities end," says Michael Kirschner, president of Design Chain Associates, a San Francisco consultancy that advises OEMs about environmental issues. "The laws are different in a number of ways."
For one thing, Europe's RoHS is a self-declaration law, meaning a company is taken at its word if it says its products don't contain any of the restricted substances above certain thresholds levels. A company must have the necessary documentation to prove its claim if the product is called into question.
However with China RoHS, a company will have to demonstrate compliance. Test laboratories in China will certify products before regulators will allow them into the Chinese market.
The Chinese law kicks in March 1.
Source: Purchasing, http://www.purchasing.com

Search, Business Intelligence Are Converging in Use, Importance
Ladies and gentlemen, it's officially a trend; the terms search and business intelligence (BI) are now being used in the same breath, not just in the same sentence. Search vendors are treading into BI territory, taking various angles of approach, while BI vendors are embracing search as a logical path to ubiquity. Vendor news the past few weeks indicates the rhetoric is only just starting to heat up.
The progression toward BI is not entirely competitive posturing, for search is truly appealing to broadly defined BI needs--at least in allowing companies to perform less structured or predictable queries on a larger and more rapidly growing mass of unstructured content.
Source: AMR Research, http://amrresearch.com

Outsource to Eastern Europe? Sure. To Russia? Ah, I Don't Know...
Russia is bidding for a bigger slice of the lucrative global offshore outsourcing market but is being hindered by the continuing negative international perception of the country.
Russia's IT services industry is currently growing at about 10 per cent per year and was worth $1bn in 2005. But despite Russia being in Gartner's top 10 list of near-shore outsourcing locations, the analyst claims companies are still wary of sending work there.
Ian Marriot, research VP at Gartner, says, "One of the biggest challenges is global public perception of Russia as a place to take work to. If you look at what companies are doing, they are saying they are happy to do business in Eastern Europe--but not Russia. That's going to take years to break down."
Source: Business Week, http://www.businessweek.com

Tort Claims Driving Foreign Firms from Investing in U.S. Capital Market?
As foreign capital markets grow both more sophisticated and more accessible, the U.S. seems to be losing its edge in the market for publicly traded securities. Increasingly, large foreign firms seeking to tap into big pools of institutional and retail funding that routinely chose the U.S. are looking at the London Exchange. And promising ventures in emerging markets like China and Russia are shunning the U.S. IPO market.
Why the shift? One hurdle is the U.S. tort system. Critics charge that litigation involving compensation for injuries runs rampant in the U.S. and that the legal system is inefficient-- not to mention arbitrary and open to abuse. Clearly, it's costly. In 2003, tort cases cost the U.S. $246bn, or $845 per citizen--and increasing numbers of such cases concern shareholder plaintiffs.
"When we ask why IPO clients chose not to list in the New York market, the first thing we hear isn't Sarbanes-Oxley," says Dennis Shaughnessy, chairman of FTI Consulting. "It's the tort bar ... And a lot of companies around the world simply don't want to subject themselves to that."
Source: Chief Executive, http://chiefexecutive.net

It's Your Message. Shape It.
Every company is now a media company. Every organization now has the ability to create and share video, audio and text communications with external and internal audiences; just a few years ago, such productions would have required expensive, specialized equipment and training, along with big budgets to disseminate the product via advertising, direct mail or other channels.
Any company with a Web site is already at the starting line. The technology needed for producing, hosting and sharing that can translate an organization's Web site into a media hub is the easy part, relatively speaking.
Becoming a media company means making decisions about who best represents the company via new media. It also means determining how much they should say, how often, to what audience--and why, with what expectations. How CIOs and other business leaders navigate those questions, along with getting a handle on the technology issues, is critical to making the promise of new media a reality.
Source: CIO Insight, http://www.cioinsight.com

Collaborative Production Management Software Market Grows in Europe
The European collaborative production management (CPM) software market is in flux. Over the next five years, the market is expected to grow at a compounded annual growth rate of 12.7 percent. In 2006, the CPM software and service market was worth $889.6m and is forecasted to exceed $1.6bn by 2011, according to a new ARC Advisory Group study.
Beneath the steady growth lies turmoil. Traditionally, the European market was supplied by small companies employing 20 to 30 people that sold point solutions to plant managers within a particular industry. "Different, disparate, and dysfunctional point solutions aren't working for the leading manufacturers," says ARC Advisory Group's European research director Simon Bragg.
To improve supply chain performance, leading manufacturers have already implemented enterprise-wide ERP and supply chain solutions. Today's global manufacturing enterprise must coordinate production and distribution across multiple plants. These manufacturers want a standard CPM suite in every plant that interoperates with their enterprise systems. Such systems improve enterprise-wide supply chain performance, enhance return on assets, support continuous improvement programs, and simplify regulatory compliance.
Source: ARC Advisory Group, http://arcweb.com

Virtual Security: Garbage Out, Secrets In
There's traditionally been a bunker mentality among the people who secure e-mail. It's us against them, an unseen enemy flinging viruses and spam--little digital grenades that could blow a hole in the CEO's inbox.
Companies still need to have shields to block those Net threats, which continue to evolve in devious ways. Spending in this area, in fact, is expected to zoom: The worldwide market for e-mail security products is estimated to grow from $3.5bn in 2006 to more than $6bn in 2010, says research firm The Radicati Group.
But now, security managers are looking more closely at the flip side of the e-mail equation: how to minimize the risks of losing precious data, such as customer records, leaking out the virtual front door.
Source: Baseline, http://www.baselinemag.com

Headwear, Handbag Maker Tosses Out Old-Fashioned Warehousing
At Dorfman Pacific, a mid-market manufacturer and distributor of headwear and handbags, the business had always been about serving the Mom-and-Pop stores that had constituted the company's customer base since its inception in 1921. But although the company had kept current with fashion, its warehouse processes had scarcely changed during 86 years in the business. Despite technology's march, its warehouse processes remained paper-based and relied on the workers' tacit knowledge of the warehouse and each customer's needs.
But in the late 1980s and on into the '90s, a new sales and distribution channel created room for growth: Dorfman Pacific began selling to the big-box retailers such as Wal-Mart, which craved more of the 25,000 items that the company sold. Dorfman Pacific still sold to the small and mid-sized retailers, but the split between the two was now about half and half.
As the company sought to expand during this period, its modus operandi showed cracks: The paper-based order-picking processes that served Dorfman's 100,000-square-foot warehouse were too inefficient; the warehouse itself was too small; the use of a temporary workforce and loads of overtime to meet demand peaks meant it incurred huge operational costs; and siloed IT systems offered little computing assistance and inventory visibility. In short, the company's growth had spotlighted the inefficiencies inherent in the way things had always been done. A total revamp of Dorfman's operations, including a complete IT overhaul inside the warehouse, was called for. Paper was out. Wireless was in.
It upended very square foot of its warehouse operations--its interior layout, day-to-day shipping and receiving practices, the equipment workers used and the IT systems enabling it all--and reduced its warehouse labor costs by 30 percent, saving more than $250,000 a year and vanquishing many inefficiencies that had plagued its operations.
Source: CIO, http://cio.com

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