Warehouses to go virtual

Combining technology adoption, business processes and security-oriented regulation is on the verge of creating "virtual warehouse" networks, a global service provider has predicted.

Unisys said that infrastructure and standards needed to form global logistics networks would start solidifying in 2005 as government and private sectors increased their efforts to balance security with profits.

"Transcontinental container movement will begin to evolve into virtual warehouse networks that span oceans and continents," the service provider said in a statement.

"This evolution will emerge as track-and-trace technologies - such as Radio Frequency Identification (RFID) - merge with refined business processes and industry-wide standards and regulations designed to address supply chain efficiencies, global security and product counterfeiting concerns."

Information being processed globally was becoming more granular, particularly in relation to security efforts around the global supply chain -- tracking goods from manufacturer to container to shelf, Unisys said.

"Leading companies know that processes and technologies that enhance security yield efficiencies directly impact profit, by reducing inventory, logistics costs and out-of-stock situations," said Tom Zielinski, managing partner of supply chain management at Unisys Asia Pacific.

Managing and analysing increased amounts of data would require more powerful collection and faster decision-making - posing new challenges for companies as they sought to secure their goods while lifting their competitiveness and profits.

Zielinski also claimed that counter-terrorism, other security initiatives and port modernisation efforts would accelerate this year, along with the implementation of auto-identification solutions. Regulators and policymakers would seek industry expertise and partnerships to develop regulations and legislation that helped companies adopt a variety of track-and-trace technologies.

The ratio of speed to value in supply chain processes would become a higher priority, he said.

Companies would want more information about their products at all levels and places in the supply chain.

"Visibility is particularly vital in supply chains for highly perishable goods, medicines and market-timed commodities such as apparel. Increased visibility into goods-in-motion will support novel approaches to manufacturing and distribution," Zielinski said.

RFID adoption would increase, partly as a result of developing industry standards such as EPCglobal's gen2 tag standard -- expected to be approved by the International Standards Organisation (ISO) in 2005.

Unisys was keen to take advantage of such opportunities, he suggested.