Logistics and materials handling technology: IBM helps Volkswagen and Ringnes improve operating processes through RFID-based sensor applications

RFID technology gathers data, provides supply chain visibility, reduces paperwork, provides a measurement tool and uncovers industry trends.

Jeff Berman, Group News Editor -- Modern Materials Handling, 3/24/2009

Global technology bellwether IBM has inked deals with two shippers—automotive manufacturer Volkswagen Group and Norway-based brewer Ringnes— that will leverage IBM’s sensor technology through RFID (radio frequency identification) tags.

IBM’s sensor technology is supported by two products. The first one is the WebSphere Premises Server, which tracks and monitors RFID reader activity and captures data from multiple readers. Data from WebSphere is available for viewing and analysis through a Web-based dashboard based on IBM’s DB2 AlphaBlox application, a reporting tool that lets users create analysis of a large amount of data that can be viewed in various ways. The other product is the Infosphere Traceability Server, which provides access to data from internal and trading partner sources that provides supply chain-like visibility for secure data exchanges.

Volkswagen and IBM collaborated on a one-year pilot that concluded earlier this year. IBM director of sensor information management Chris Clauss says this pilot consisted of four main points where RFID data was read between Volkswagen and a single supplier for several different types of containers transporting sunroofs for the new Volkswagen Golf. The first reading was at the supplier’s shipping department through the entire transportation department until containers arrived at Volkswagen, with the other RFID readings occurring during storage, collection and installation on its assembly line. During this pilot program, VW fitted roughly 3,000 shipping containers with passive RFID tags from Intermec.

“The idea was that Volkswagen wanted to save money on all the paperwork involved with shipping and receiving…to reduce to manual handling of paperwork,” explains Clauss. “The supplier would be notified for each container being shipped, Volkswagen would be notified for each container it received.”

Clauss says the collection—or forklift—reading is the most interesting one, as it reads the container and also keeps track of where it is being stored, or where it currently is in transit. He also explains that this same process is conducted when Volkswagen returns empty containers back to its suppliers to ensure all containers are returned after the auto parts are received.

This process ensures that all involved parties know: when a container left a supplier, when it arrived to Volkswagen, where it went when it arrived at Volkswagen and when it was shipped back to the supplier. Clauss explains that these RFID data tags include an ID number for a container, with other data on the IBM WebSphere Premises Server that tracks not only the container number but also what the supplier put into it.

“When Volkswagen reads a tag number, they already have the bill of materials for a container and know what is in it,” says Clauss.

And, he adds, that by placing an RFID reader around a dock door, a container only needs to enter through that door and is then read by the IBM system. This reduces all the manual labor for Volkswagen that was previously required to collect information on each container that passes through. And Clauss notes that the bigger advantage with this is the automatic transmission of data from the supplier to Volkswagen and Volkswagen subsequently being able to get rid of all the manual paperwork that was required for things like bills of lading.

“Our long-term goal is to implement an integrated, paperless production and logistics chain throughout the whole Group,” says Klaus Hardy Mühleck, group CIO and head of Group IT at Volkswagen, in a statement. “The pilot project showed that we can reliably integrate RFID technology into our business processes at a low cost.”

Ringnes and IBM flow together through RFID

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Like Volkswagen, Ringnes (a subsidiary of the Carlsberg Group) also embarked on a pilot program with IBM which has been in production for several months. While Volkswagen’s efforts focus on reducing paperwork and manual production through IBM’s sensor technology and RFID offerings, Ringnes hones in on augmenting its yard management operations.

The brewer’s focus was on making deliveries as predictable as possible so retail customers can maintain the right amount of beverages on their shelves at any given time. This is no small task, considering Ringnes provides nearly half a billion liters of beverages annually throughout Norway.

Clauss explains that Ringnes placed RFID tags on its trucks as the first step of its yard management operations. When a Ringnes truck drives into its yard, it drives through a dock door reader that recognizes a truck has come into the yard. These readers are located at the main gate and in 43 dock doors at Ringnes’ Oslo, Norway facility. Clauss says that Ringnes used 500 trucks—each with an RFID tag—during the pilot

“When a truck is backed up to the dock door, we know how long it sat there being loaded or unloaded,” says Clauss. “We know when it has been driven away from the dock door, and when it leaves the yard. What we are looking for is the efficiency with which trucks move, how long it takes them from going into the yard to being unloaded, how long does it take to load or unload them and how long they sit after being unloaded before they leave the yard again.”

Prior to taking these measures, Ringnes did not use any type of real-time technology to track the location of containers used to transport beverages and empty bottles returned by stores.

Without proper measuring tools, it was difficult for Ringnes to do any detailed container management, says Clauss. This prevented them from making accurate determinations on where a container was or a truck’s dwell time. That said, the objective of this project was to bring measurements to something that had not been measurable before.

One of the most interesting things about this pilot is that Ringnes is collecting data to analyze patterns and understand different types of behavior for container movements through IBM’s AlphaBlox, which provides data analysis and then turn it into trends, notes Clauss. These trends could be based on container movements and behavior on certain days of the week or weeks of the month.

Clauss says this type of research is a form of “co-collaborating” between IBM and Ringnes, where Ringnes is leveraging IBM’s WebSphere Premises Server software and AlphaBlox, as well as working as a team to cull data and identify data trends.

Specific terms of IBM’s contracts with Volkswagen and Ringnes were not disclosed. IBM’s Clauss did state that IBM is actively engaged with other shippers in various forms of returnable container analysis and management, noting that further announcements will be made in the future.