Dow leads the way on RFID

Complying with a mandate is not enough for Dow. The chemical maker is looking for value from RFID in its own operations.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 10/24/2006

Like many companies implementing RFID solutions, Dow Chemical has to comply with mandates from retail customers.

That, however, isn’t the reason Dow is looking for value from RFID in its own operations. “RFID is creating an opportunity to improve the safety and security of our supply chain, and get more from our value chain,” says Dave Asiala, Dow’s IT director for shared services. “We’re looking for applications related to the way we move and care for our materials. Not that many companies that I talk to share that view.”

Dow began to take a serious look at RFID in the supply chain 18 months ago. “Our CIO said that the time was right for us to get more engaged,” says Asiala.

After some initial planning, Dow formed an RFID strategy development team. The team included members from the same internal group that manages bar code and labeling systems, as well as an external advisory board from SAP, Accenture and Savi Technologies, a provider of active RFID solutions and locator systems. “We created a list of projects where we could derive value and put them in a 10-year plan,” says Asiala.

The first generation of projects is focused on the safety and security of the supply chain, including tracking the location and condition of intermodal containers.

“We’re combining GPS technology with RFID tags and sensor technology,” says Asiala. “That will allow us to track the location of a container, whether it’s on the water or on the road, track whether a container has been accessed, and measure environmental conditions like temperature, humidity and shock that might affect the status of our products.”

In addition to improving the safety of the supply chain, Dow projects a return on its investment in RFID, something not every company can say. “We have a very disciplined approach to IT projects,” says Asiala. “Through improving visibility, asset-utilization and handling, we’ll be able to take out structural costs at a rate higher than the money we’re investing. That’s good for Dow’s business.”