Winging into Wireless

It's cheaper and easier to install--and more companies are finding that it pays off big

Three years ago, U.S. Fleet Services considered building a wireless network for its drivers, but soon decided against it. Customizing mobile devices and developing software was too hard, and the company didn't have computer systems robust enough to make it worth the hassle. Then, last year, U.S. Fleet revisited the technology--and this time it put the pedal to the metal.

The reason? These days, wireless is cheaper and easier to deploy--and it's already paying off. In September, U.S. Fleet, which refuels vehicles for customers such as Coca-Cola (KO ) and Nabisco, began equipping its 200 trucks with mobile devices and wireless connections to its corporate intranet. The price: $1.5 million, a quarter of what it would have cost three years earlier. Now, managers can check drivers' locations online, letting them rearrange routes on the fly--and increase the average number of daily deliveries per truck from six to seven. As soon as drivers fill a client's vehicle, the information is scanned into their handheld computers and zapped off to the network. That lets customers check deliveries immediately on U.S. Fleet's Web site, two days faster than before the system was installed. Wireless "makes good business sense and doesn't cost an arm and a leg," says Saul Cohen, vice-president of information technology at U.S. Fleet.

Once written off as overhyped and underperforming, wireless is enjoying a resurgence in Corporate America. Thanks to plunging equipment prices, new standards for radio links, and increased cellular coverage, even small companies can afford wireless systems once available only to deep-pocketed giants such as United Parcel Service Inc. (UPS ) "During the past 18 months, companies staggered around, not quite sure whether to touch wireless," says Martin Dunsby, a partner at Deloitte Consulting. "Now the interest is accelerating."

TENFOLD BOOST.

  What's fueling the growth? Device makers, ranging from well-known names such as Palm Inc. (PALM ) to industry stalwarts like Symbol Industries are churning out smarter and smaller handhelds. Symbol's standard machine, for example, has gotten a tenfold boost in performance since 1999, while its price and weight have fallen by a third. That makes it cheaper for companies to equip workers and has cut the price of wireless projects in half over the past two years, says researcher IDC Corp. That, in turn, will help double the number of field reps with wireless devices, to 11 million, this year, says Yankee Group Research Inc. And in hospitals, offices, and factories, a standard called WiFi (a.k.a. 802.11b) that connects devices to wireless networks is simplifying installations. This year, employees using WiFi networks are expected to more than double, to 12 million, according to Gartner Inc. Another boost: Tiny radios can now track parts in warehouses or alert techies when machines are on the blink.

Still, lingering design and technical issues need to be ironed out. Some companies are waiting for the higher-speed wireless networks that phone companies such as Verizon Wireless (VZ ) and Sprint PCS Group (PCS ) are promising this year. Without those networks in place, companies fear their wireless initiatives won't have sufficient reach to make them pay. For instance, coffee distributor Millstone Coffee gave handheld computers to 400 field reps last fall but has delayed wirelessly linking them until connection speeds and coverage improve. And security holes uncovered last year in WiFi technology have sparked concerns about hackers intercepting corporate data.

The biggest action is in reaching out to field personnel. In years past, Pepsi Bottling Group Inc.'s (PBG ) 700 soda fountain technicians spent too much time on the phone instead of time fixing the company's 1.3 million vending and fountain machines. Customers called in problems, then a call-center employee paged a technician, who would ring for details about the job. At the end of the day, repair workers would fax in forms detailing their visits--with results not available on Pepsi's intranet until five days later.

PAYING FOR ITSELF.

  That system is on its way to the trash heap. Pepsi's technicians now have off-the-shelf handheld devices from Armonk (N.Y.)-based Melard Technologies Inc. Dispatchers today retrieve from Pepsi's intranet everything the technicians need to know about a job and zap it off to the paperback-sized handheld. When the job's done, the technician sends an electronic bill to headquarters. At the same time, the handheld automatically tells the stockroom which parts were used, so when the technician stops in for supplies, replacements are waiting for pick-up.

The payoff? Pepsi answers calls 20% faster than it used to and has saved $7 million--meaning the project will pay for itself in just two years. And parts replenishment requests are now nearly 100% accurate, vs. 85% in the past, when legibility was a big issue. "We sell soda," says Gary K. Wandschneider, senior vice-president for operations of Pepsi Bottling Group. "When we tried to figure out why customers switched to our competitors, part of the answer was customer service and equipment failure."

Field workers aren't the only ones going wireless. In warehouses, offices, and hospitals, wireless technology gives mobile workers instant access to data. St. Luke's Episcopal Hospital in Houston spent $2.5 million on computers and a WiFi network for three of its 22 floors. Nurses and doctors bring laptops on their rounds, entering treatment info and zapping it to the hospital's intranet. Staff in the departments with wireless have cut data-entry time by 30%, says Gene Gretzer, the hospital's wireless project leader. The respiratory therapy group alone was able to shave staff by 20%, saving $1.5 million while handling 13% more patients.

HEY, FIX ME!

  Increasingly, companies are using wireless devices that talk to each other, cutting out humans entirely. Thermo King Corp., which makes cooling units for trucks and shipping containers, is selling self-monitoring equipment. When a truck returns from a delivery, a radio connected to the Net contacts sensors on the vehicle that track the performance of the cooling machinery. If there's a problem, an alert is sent to a Web site monitored by technicians. That can mean savings of up to $1,000 per truck annually by reducing spoilage and cutting maintenance staff.

Sure, the wireless Web hasn't lived up to expectations for consumers. For businesses though, the mobility of wireless combined with the wealth of data on the Internet are creating a one-two punch.

By Heather Green

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