The success of organisations operating across a broad range of industry sectors depends on their ability to cut costs out of their supply chains. Now mobile data is the new weapon being deployed by leading-edge organisations to achieve that goal.

Yet many companies still remain unaware of the benefits that mobile can deliver today. This stems from a general disillusionment with mobile technology, driven by the delays and disappointments around Wireless application protocol (Wap) and third-generation (3G) telephony. But organisations need to look beyond this negative view if they are to avoid self-inflicting competitive disadvantage.

Mobile is one of the key technologies that can and will enhance the supply chain in the immediate term. But mobile is not confined to 3G or UMTS (Universal Mobile Telecommunications System). A suite of mobile and wireless technologies exists today that are stable, available and relevant for use in the supply chain.

These technologies are already having a positive impact on the supply chains of competitive organisations. They include mature technologies such as GSM, close proximity radio frequency tags, wireless LANs and the Global Positioning System as well as emerging technologies that should become ubiquitous and dependable in 2002, such as Bluetooth and GPRS (a packet data based service available over GSM networks).

They can all have a positive impact on an organisation's supply chain.

According to recent research from Deloitte Consulting, several organisations that have deployed mobile technology across their supply chain have enjoyed payback periods of under one year, while return on investment for some solutions is forecast at hundreds of per cent. And all this is being realised without 3G.

Return on investment from mobilising the supply chain should be considered as a major incentive to deploy mobile and wireless technologies. The more agile and better-informed the supply chain is, the more productive it can be. The present uncertain economic climate should provide an additional spur to improve the supply chain. Mobile can be a tool both for increasing productivity and increasing revenues - even during an economic downturn.

The key to mobile's impact on the supply chain results from a faster flow of relevant information. The quicker that staff have access to critical data, wherever they may be, the faster decisions can be taken. A mobile-powered supply chain can positively impact several key areas including cost control, information accuracy, customer relationships and time to market.

* Impact on cost control: Mobile can make an important contribution to cost control across the supply chain. As mobile improves the flow of information, approaches to supply chain management, including just-in-time delivery, are improved.

This means that companies require smaller inventories. Communication between customers and suppliers is faster and more accurate, so stock holdings become more precise, leading to smaller stock levels and improved cash flows.

Volkswagen, for example, found that its mobile data solution, based on radio frequency (RF) tags, allowed it to locate nearly finished vehicles far more quickly than the alternative - staff searching on foot. This allowed the company to accelerate the pace at which it could present brand new cars to customers at its flagship showroom in Germany.The information being communicated is tiny, but the solution was effective enough to pay for itself within a year.

* Impact on information accuracy: Even in companies with sophisticated but non mobile-enabled supply chains, the usual technology underpinning the capture and validation of inventory information is the low technology clipboard and pen. This virtually guarantees inaccuracies and data obsolescence. In a mobile solution, the location and status of assets and inventory is known by the systems all the time.

* Improved customer relationships: Mobilising the supply chain improves customer relations through better flow of information. Improvements are principally achieved in the speed and accuracy of data. This would, for example, help a supplier provide informed, rapid and pro-active information to a customer requiring a delivery date and time.

Monitoring a delivery vehicle's location through GPS, with co-ordinates being relayed from the truck via SMS, allows central co-ordinators to keep a running view of progress and any delays to the central schedule. Any major problems can be spotted quickly and customers alerted to the extent of the potential delay.

For example RAC, the UK automotive services group, uses mobile data to reduce the time it takes to send its assessments of second-hand cars to their potential customers.

* Time to market: Improved communication between all participants across the supply chain means faster time to market. Stock levels, product specifications, lead times and other key data can all be requested and provided more rapidly via mobile technologies.

But time to market is not just about making existing processes faster, it is also about the pace of problem resolution. For example, time to market can be frustratingly prolonged as a result of mechanical failure. Mobile technology can speed the process whereby an engineer is informed (for example, via an SMS message); a diagnosis is made (through wireless LAN or Bluetooth access to technical databases); and new parts are specified and ordered (via a GSM-enabled PDA).

There are three steps that companies should observe when mobilising their supply chain:

* First, assess the supply chain and identify areas of weakness. Even in the most apparently technology penetrated companies, there usually remain several key bottlenecks within the supply chain.

* Second, evaluate which mobile and wireless technologies are relevant tools for addressing supply chain deficiencies. A range of technologies is available today, each of which has specific characteristics in the areas of price, bandwidth and device requirements.

* Third, calculate the potential return on investment and payback period from the solution. This calculation should include not only the immediate productivity benefits, but also secondary impacts, such as improvements in management information, customer relations and cash flow.

The supply chain will be a key vehicle for competitive differentiation for the foreseeable future. Today's mobile technologies are already proving to be critical elements within that supply chain. Mobile-aware organisations have already seen rapid payback on their deployment, yet still too many organisations remain sceptical of mobile, or are mistakenly planning to defer deployment until 3G arrives. Martin Dunsby is global wireless initiative leader, and Paul Lee director of mobile and wireless research, at Deloitte Consulting