By Laurie Sulllivan EBN (06/27/2003 11:00 AM EST)

Lured by the potential of wireless technology, electronic components distributors are finding efficiencies by implementing the very products they sell.

Avnet Applied Computing (AAC) improved productivity up to 10% at its Avnet Integration Solution Center in Phoenix after a 60-day trial on Intermec Technologies Corp.'s Wi-Fi 802.11b wireless system proved successful, the companies reported this week.

AAC, a $1.8 billion operating group of Avnet Inc., focuses on embedded computing products and white-box systems. Its 15,000-sq.-ft. center in Phoenix and facilities in Peabody, Mass., and Nettetal, Germany, build and ship integrated computing products for companies in the medical, telephony, kiosk, and media markets.

"We've already seen a 10- to 15-minute gain in productivity per technician per order, and we have more than 30 technicians and 500 orders per month," said Fane Friberg, AAC's vice president of operations. "That means thousands of hours gained per month already, but we are still optimizing our workflow based on the new wireless system, and I expect to see additional productivity gains soon."

Prior to the implementation, technicians would download information or firmware upgrades, or update customers' systems at wired terminals. Now they work from wireless laptops, retrieving information from access hot points located in the building's ceiling.

Dee Electronics Inc., a multimillion-dollar distributor in Cedar Rapids, Iowa, implemented a similar network from Intermec in its warehouse to improve efficiencies based on its batch bar-code scan system. The wireless LAN transmits via two access points within the 35,000-sq.-ft. facility and operates on an 802.11b standard from handheld scanners that run Windows CE on a Web browser.

The $65,000 investment paid off in five months rather than the scheduled year and reduced Dee's order processing time 35% to 40%, order-picking errors by 70%, and cut component-shelving errors 90%, the company said.

Dee is now preparing to use radio frequency identification (RFID) technology on the outside of shipping boxes to automatically track the contents as they leave the warehouse, according to IT coordinator J.J. Johannes.

In an ideal scenario, Johannes said, Dee's OEM and EMS customers would install RFID readers at their warehouse receiving stations to pick up the signal and automatically transmit information from the boxes to their databases.

"Once price becomes a nonissue, it will begin to replace bar codes," Johannes said. "We are thinking about putting RFID tags on high-ticket items before we ship them, the ones that cost several hundred dollars."

Companies looking at the cost issues in whatever programs they have in place must consider not only a tight, cost-effective supply chain but one that is flexible and operationally effective.

"Distributors to boost sales may have to demonstrate improved efficiencies by using some of the innovative technology they distribute," said Brian Alexander, an analyst at Raymond James & Associates Inc., St. Petersburg, Fla.

While many top distributors like Arrow Electronics, Bell Microproducts, Memec Group Holdings, Newark InOne, and Sager Electronics operate sophisticated warehouse systems with bar-code readers and early RFID technology, few have considered tagging products or implementing the latest versions internally because of cost.

Memec, among others, is running an automated conveyance system in its 75,000-sq.-ft. warehouse in Reno, Nev., using wireless RF readers that track black totes as they travel past scanners to identify contents and update the company's database.

"The product picking still operates on bar-code technology, but we use RFID to move the components in and out of the carousel system," said Gerry Fay, vice president of operations at Memec United, San Diego, a Memec Group division. "The main benefit of RFID over a barcode system is the tags can be read in any position or orientation and are really unobtrusive, so they avoid being tampered with. If a bar-code label tears it's not useable. RFID tags are more resilient."