RFID beyond the warehouse walls
Early adopters are taking RFID out of the plant and warehouse for improved visibility across distant supply chain nodes.
By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 6/1/2007
When it comes to the supply chain, everyone wants visibility.
“One of the extremely frustrating things for a logistics professional is the information black hole,” says Rick Kessler, CIO and vice president of business service solutions for Horizon Lines (877-678-7447), the nation's largest domestic container shipping and logistics company. “What we want is total visibility from the time our assets leave our terminal until they come back.”
In fact, visibility is one of the benefits promised from RFID. After all, the idea behind RFID in the supply chain is that it would track a pallet or even a can of soda from the manufacturing line to the scrap yard.
Getting there has been slow. Most solutions have focused on locating assets inside the confines of a facility or yard or on identifying cartons and pallets for the Department of Defense, Wal-Mart or another retailer.
That is beginning to change.
EPCglobal (937-291-3300) recently ratified EPCIS (EPC Information Standard) for sharing information among trading partners. And, early adopters like Horizon Lines are implementing solutions focused on gaining visibility beyond the four walls of the plant and DC.
“RFID is converging with GPS, cellular and sensor technologies to provide more visibility and more information about assets and products,” says Mike Liard, research director of RFID and contactless for ABI Research (516-624-2500).
In fact, the question isn't a technological one: It's a matter of cost.
“When these solutions provide business value, more companies like Horizon Lines will recognize that,” says David Lambacher, vice president of sales of Americas for Identec Solutions (972-535-4144), the maker of the long-range tags being used by Horizon. “The question is how quickly they will provide business value that pays for the adoption of the technology. That's where we are today.”
Creating the RFID network
RFID works within the confines of a facility or even a predictable transportation route because of the closed loop nature of the supply chain. The company deploying the solution controls the environment.
A broader supply chain, like the retail one, is not so neat and tidy. Every participating manufacturer, third-party logistics provider and carrier may have its own proprietary information system.
The first step to making RFID work in such an open environment is the adoption of standards. The EPCglobal Gen 2 tag has quickly been adopted as the de facto standard for passive RFID tags in the supply chain, and the organization recently ratified the EPCIS.
It is a standard set of interfaces for EPC data that enables a single way to capture and share information for container tracking, product authentication, promotions management, baggage tracking, electronic proof of delivery, chain of custody, returns management and operations management.
The standard was ratified in April and an EPCIS pilot project involving nearly a dozen companies is already underway. The pilot uses active RFID tags along with software from Oracle (800-633-0738) and Savi Technology (650-316-4700) to track container shipments of sporting goods from Hong Kong to Japan.
According to Dr. Julia Zhu, director of strategic initiatives for Savi, products are manufactured in China then sent to a warehouse next to a port in Hong Kong. There, passive RFID tags are applied to cartons and an active tag is applied to the shipping container.
For now, the information written to the container tag is limited to: container ID number, time and location stamp, and the number of the mechanical security seal applied to the container door. The contents in the container are tied to its information through the network. EPCIS is the protocol used for how that information is formatted.
The system reads the container tag at specified points stretching from the warehouse in Hong Kong to where it's unloaded from the ship and onto a warehouse in Tokyo.
The solution being piloted won't track a container in real time, all the time. But, says Zhu, any authorized user can now track the time between the nodes in the supply chain and visualize the journey a product takes. “We're showing the supply chain community that we're coming up with solutions to track product from origin to destination,” she says.
Reading RFID between the nodes
EPCIS is a step forward because not everyone needs to know—or can afford to know—where every trailer or container is located at every second.
“There are something like 50 million containers in the world and 12 million moving into the U.S. today,” says Mike Dempsey, vice president of edge technology solutions for Navis (510-267-5000). “The biggest problem is just figuring out who is going to pay for active tags on all of those containers in an open supply chain.” That cost, he adds, is nothing compared to the implementation of an infrastructure to handle all that data.
  
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Trailers outfitted with active RFID tags are read when they pass through the gate (1), are tracked in the yard (2), and system-directed to the dock (3) for loading and unloading. |
Still, Dempsey and others say forward-thinking shippers are looking for ways to combine technologies to get more reads at more locations—capturing data between the traditional supply chain nodes.
“We're working with a partner to develop a tag with four levels of communication,” says Dempsey. “It can communicate via UHF RFID, communicate via a WiFi network, via a cell phone, or via a satellite communication network.”
In addition, Dempsey says, Navis is working with one major grocer to associate the inventory identified by passive RFID tags inside trailers with the active tag on the trailer.
“In Georgia, we're tagging 7,500 trucks that transfer intermodal containers from the port to a DC,” says Dempsey. “If the truck has a tag, we can tie the tag on the container to the tag on the truck to automate the gating process. We're not doing it today, but the long-term vision is to put readers at the trucking company's facilities along with the retailer's distribution center to get automated data as the truck and container move through the supply chain.”
The value goes beyond greater visibility, adds Mike Hammons, CEO of Argo Tracker (520-202-2700). Sensor technology is also being combined with RFID and GPS solutions to monitor in real time the conditions of a shipment in addition to its location.
One benefit is the ability to reduce inventory shrinkage during shipment, especially of high-value items. One of Argo Tracker's customers, for example, ships computer back-up tapes containing millions of dollars worth of banking information.
“We created a solution where the back-up tapes are individually tagged, each trailer has a tracking unit, and there's a sensor inside the trailer that tells whether the doors have been opened,” says Hammons. “In addition, there's a reader inside the trailer that knows when a tape has been unloaded because it goes out of the range of the reader.”
Likewise, the technology can be used to establish a geofence—a delivery path for a truck or other vehicle.
“GPS technology can communicate the location of a trailer on the road over a cellular network or satellite,” says Todd Felder, new product development leader for GE's Asset Intelligence Division (847-585-5659). “If the truck goes outside of that route or the door opens before it's supposed to be opened, you can automatically send an alert to someone in authority. You also have a virtual manifest of what went into the trailer. If anything leaves in transit, you now have a record of what left and when it left.”
The cold chain is another example of real-time monitoring not only the location but the condition of the product inside. “We can also plug sensing devices into the overall solution that can monitor the temperature of the reefer unit or sense the presence of gases that would indicate fruit, produce or meat was spoiling,” says Felker.
In that scenario, the trailer becomes a virtual warehouse that can be diverted based on what's inside the trailer.
“As the technology becomes adopted it will become cheaper,” says Felker. “It's a huge marketplace and we're in the early stages, but we're going to see significant growth. They're not talking about it, but there are some large companies pursuing this now.”
New solutions for old problems
Just what are the broader supply chain problems being solved with RFID?
According to Mike Liard, research director of RFID and contactless for ABI Research (516-624-2500), they can be broken down into three buckets.
Bucket 1: Closed loop asset tracking. One of the reasons that real-time locating systems (RTLS) work so well within a plant, DC or yard is that the assets being tracked are in a closed loop—the geographic space is predictable and the number of players is limited. An automotive manufacturer may track the location of its suppliers' containers inside the plant or the location of a trailer in the yard. That same concept is being applied in logistics where shippers are using GPS and cellular technology to track their cabs, trailers or rail cars as they travel on the highway or across the rails.
Bucket 2: Security. "We want to know whether someone unauthorized is opening a cargo container or rail car," says Liard. RFID tags applied to the doors of a container act as an electronic seal. If someone opens a cargo door, the tag sends a warning that the trailer has been opened. Meanwhile, light-detecting sensors inside the trailer can be tied into the RFID tag to send a signal if someone cuts into the side of the trailer.
Bucket 3: Monitoring conditions. In addition to RFID tags that track the location of an asset, sensing devices are monitoring the temperature inside refrigerator units and the freshness of fruits and vegetables, Liard says.
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