Bob Trebilcock

Finding an ROI in RFID
February 6, 2008

While the adoption of RFID in the distribution center treads water here in the US, European companies continue to find innovative ways to put the technology to work.

Last July, I gave three examples of recent RFID projects from across the pond. The latest news comes from Diakinisis S.A., a Greek third party logistics provider. Diakinisis implemented an RFID solution in a DC in Athens serving the packaged food industry that provides 100% traceability for incoming pallet shipments, from the time they arrive at the dock until they leave again for delivery to a customer.

“This is one of the most far-reaching RFID installations we have ever seen in a DC,” says Stephen Crocker, director, sales channel management, EMEA, for Alien Technology, which provided the tags and readers for Diakinisis.

What makes it unique, according to Crocker, is that the 3PL is using RFID in three different ways.

First, pallet ID tags are affixed to wooden pallets that go to and from the DC. When an incoming pallet enters the DC, it passes through a dock door portal, where the RFID tag is read. That way, the system knows what pallets are located in the facility.

In addition to tagging pallets, Diakinisis embedded RFID tags in the DC floor and mounted RFID tags on pallet shelves. These tags communicate with fork lift-mounted antennas to validate pickup and inventory data.

As an operator drives to a storage location to pick up or putaway a pallet, the antenna on his lift truck reads the tags in the floor. The system notifies him on the mobile computer screen when he reaches the right aisle for the task. In the aisle, the antenna reads the shelf tags and notifies the driver when he is at the right shelf. It will also alert him if he tries to putaway or pick the wrong pallet.

Dock door portals are also used to track the outgoing pallets. Finally, trucks are also tagged with RFID tags and are read by outdoor portals that have been ruggedized to withstand harsh weather conditions.

How well is it working? Diakinisis reports near 100% pallet traceability. The company also says it has expedited putaway by 25%, sped up picking by 40%, reduced shipment errors by 80% and reduced over-time by 20% as a result of better efficiency.

“Usually, we just see RFID being used to receive pallets and then bar codes take over inside the DC,” says Crocker. “This solution takes it to the next level.”

Is your DC or factory implementing RFID? If so let me know where you intend to find an ROI by posting a comment below, or send me an e-mail Robert.Trebilcock@verizon.net.

Posted by Bob Trebilcock on February 6, 2008 | Comments (1)