VW and IBM Use RFID to Create a Smart Supply Chain

STUTTGART, Germany and ARMONK, N.Y.—Working together on a one-year pilot project, Volkswagen and IBM have improved the automaker’s material logistics operations through RFID sensor technology.

Shipping containers carrying automotive parts for Volkswagen are fitted with RFID tags. Data on tagged containers is automatically collected by readers at all key locations throughout the supply chain--first at the supplier's shipping department, through the transportation process until they arrive at Volkswagen, then during storage, collection and installation on the automaker's assembly line.

The same process is used when Volkswagen returns the empty shipping containers to its suppliers to ensure that all containers are returned after the auto parts are received. The technology is also reducing the need for paper documents and barcode labels.

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

IBM technology being used for this project is comprised of IBM Global Technology Services' RFID container management solution together with the IBM WebSphere Premises Server, an application-neutral RFID middleware product.