RFID: Against the supply chain grain
Look in some unexpected places and you'll find RFID changing the way we do business in the supply chain.
By Bob Trebilcock, Executive Editor -- Modern Materials Handling, 11/1/2009
Five years ago, we all thought RFID would revolutionize the way we do business in the supply chain. But back then, the action was focused on tracking product in the open loop supply chain: Retailers talked about getting visibility into the products they sell from the time they left their suppliers' manufacturing lines until they were read at the check out counter and a customer walked out the door.
Today, if you look closely, you'll discover that RFID technology is revolutionizing the supply chain, but not in the way we once thought it would. Yes, there are retailers like Metro, Wal-Mart and Sam's Club that remain committed to RFID. Now, however, the action is focused on the closed loop supply chain, says Michael Liard, practice director of RFID for ABI Research (516-624-2500, www.abiresearch.com). In a closed loop, assets, products and work-in-process never leave the control of supply chain. It's that control that delivers the ROI, explains Liard.
"In an open loop supply chain, everyone has to deploy the technology before the customer, their suppliers and their partners benefit," says Liard. "That includes manufacturers, logistics providers, distribution centers and the stores. In the closed loop supply chain, there's an ROI just from reducing the labor associated with searching for parts or work-in-process; reducing the number of touches in a business process; or getting better inventory control."
Lower prices, new tags and the convergence of RFID technology with GPS, WiFi, satellite and sensor technology that monitor more than just the location of goods are driving up adoption rates.
Ultimately, Liard adds, the RFID solutions that work are those that improve operations around compliance, asset management or workflow. Here are some examples of how RFID is solving problems beyond tracking pallets and cartons.
Shippers use RFID tags to track containers once they are off-loaded from a ship.
Using RFID for real-time visibility across the supply chain
In the intermodal shipping business, the goal is to have just the right number of containers to maximize the turn time. Without visibility into the location of containers and how they're moving through the supply chain, however, shippers can spend a lot of money to have enough assets to meet its needs.
That's why Horizon Lines, the largest domestic ocean carrier with 21 vessels servicing trade lanes in Alaska, Hawaii, Guam and Puerto Rico, invested in RFID technology (Identec Solutions, 214-714-3475, www.identecsolutions.com) to tag and track its fleet of more than 6,000 intermodal containers across the supply chain. The system uses long-range active RFID tags that can be read on a truck traveling at 70 miles per hour from as far away as 1,500 feet. The first route is in Alaska where there is just one north/south highway and the state department of transportation allowed Horizon to install RFID readers along that highway.
Horizon begins tracking its assets in Tacoma and Seattle, Wash., where cargo containers bound for Alaska are loaded. Each container has an active RFID tag with a unique identification number. The empty container is read at the DC gate, when the container is loaded, and finally when the container is loaded on a ship.
While those preliminary reads put events in motion, RFID really takes over in Anchorage, Alaska, once the container is loaded onto a truck and leaves the security gate for the highway. As it travels to Fairbanks or Seward, readers installed in key locations along the highway read the long-range RFID tags and alert Horizon's customers that the container is in route. Meanwhile, Horizon's customers are able to prepare their DC staffs to unload the trailer soon after it arrives and get it back on the road. Horizon reads the container on its return trip back so that it can quickly be put back into service when it arrives in Anchorage.
The value: Horizon Lines has better visibility into how its containers move through the supply chain, which allows for better utilization of its assets.
RFID is being used to ensure that the right parts are loaded onto the right transport plane.
Real-time asset management
Mention asset management and most people think of tracking totes in a plant or trailers in a yard. In northern California, the Army has taken that concept one big step further at the Sierra Army Depot (SIAD) using RFID (Savi, 888-994-7284, www.savi.com) to track mobile assets that might be stored anywhere among the 1,200 buildings and yards in a complex that covers 59 square miles.
The depot serves as a multi-functional logistics center for the storage, maintenance, assembly and containerization of thousands of operational stocks and other major end items on behalf of a wide population of customers. If those assets are inadvertently misplaced or their location misrecorded, it could take days or even weeks of manpower to search the vast area to retrieve them.
SIAD is implementing an asset management and real-time locating system that will use asset management software in conjunction with RFID tags, readers and handhelds that apply GPS technology to improve visibility, accountability and the annual inventory of assets.
The result: By tagging important assets as they move through the complex, the solution will help personnel reduce hours spent searching for critical containers, major supplies and equipment as they move on, through, and off the facilities, thus improving operational efficiency and cutting costs. The system also improves asset inventory utilization, and—through automated alerts—speeds the monitoring of environmental conditions of medical equipment and supplies stored in special containers required for rapid deployment into the field of operations. Finally, the data collected by the system will allow the Army to analyze the current processes at the facility and recommend improvements.
A warehouse store retailer is piloting RFID to identify storage locations in the store.
Leaping over WMS and going right to RFID
Manufacturers may not be slapping very many RFID tags on cases and pallets before they ship them out the door, but businesses are discovering new ways to track valuable assets with RFID technology. One provider (Omni-ID, 650-571-6664, www.omni-id.com) is developing a solution that will use RFID to track the location of product in Sam's Club, a retail chain. After all, a Sam's Club is essentially a warehouse.
Instead of using a traditional warehouse management system (WMS), this solution installs high-performance passive RFID tags on the metal beams on pallet racks to identify a putaway location in the store. The cartons and pallets are still identified by bar code labels. When a lift truck driver puts a pallet away on the rack in the store, the driver scans the bar code label on the pallet. Meanwhile, an RFID reader on the lift truck reads the location tag. The two data streams are joined in the store's inventory management system to tie the product to the RFID tag.
The Army is using RFID in conjunction with GPS technology to track mobile assets across a yard that spans nearly 60 square miles.
Using RFID to prevent errors
A commercial aircraft is one of the most complicated and sophisticated machines ever built. Getting the right part to the right place, at the right time and even on the right side of the aircraft is imperative. That's why Airbus is developing solutions that will use RFID (IBM, 800-426-4968, www.ibm.com) to error-proof its operations.
On the final assembly line for the A380 aircraft in Hamburg, Germany, RFID tags are placed on the containers that deliver items required to finish the cabin of the aircraft as they travel from the warehouse to the assembly line. In this application, parts are placed inside an RFID-enabled container that can be delivered to one of six docks. Each dock has two elevators and four floors. RFID readers are located at each entrance and exit on each floor. If the materials handler is going to the correct area, he gets a green light confirmation. If he tries to get on the wrong elevator or get off on the wrong floor, he gets a red light. With as many as 750 parts containers per airplane, this helps avoid a disruption later on.
Airbus is also using RFID to track the transportation of subassemblies, such as fuselage sections, wings and tailpieces, from a subassembly site to production facilities. The subassemblies are tagged and read by readers installed on special cargo-loading devices that load jigs onto cargo planes. As with the containers on the elevators, a materials handler will be notified by lights if he tries to load the wrong jig onto a cargo plane.
Solutions like these may seem unusual, but they are creative applications of the technology that reduce time and errors, and improve product flow.
"The cost justification and adoption decisions around RFID become much easier when the customer is capturing multiple value propositions and addressing multiple business inefficiencies," says Liard. "That's what we're seeing."
View All On-Demand Webcasts
