US businesses inventories have topped $1 trillion for the last several years. Keeping track of all of those goods and the assets associated with them is increasingly important to the owners of both the inventory and the trucks, containers, and other assets deployed along the supply chain.
Product safety issues have focused more attention on the ability to locate and remove or recall product that is already in the distribution cycle. Coupled with security issues and regulations mandating some industry segments to maintain complete control of products they manufacture and distribute, the task is huge and growing.
Fortunately, for logistics and supply chain managers, technology exists to support their efforts. The issues include controlling supply chains, managing the chain of custody, improving recalls, and being compliant with government regulations, explains Jack Walsh, director of sales for Videojet. “For us, track and trace is not just knowing where the case or pallet is but also what was in that case—that’s the new wave in the market,” says Walsh. Most people know where they ship a case, but once that case or pallet is broken down, they don’t have visibility to specific items that were shipped.
Most people have systems to track where they ship a pallet or even a case, Walsh continues. There’s no reason to replace that system. Videojet’s approach is to create the parent/child relationship between the item and the case.
“The simple approach is to use two systems in tandem and connect them—at the file level on the software side,” says Walsh. At the mechanical level, there are a number of ways the parent/child relationship occurs. In-line scanning or cameras help inside the facility. “You may have to modify production to automate batching to collect the data,” he points out. You won’t be able to get the parent/child data with just one piece of equipment, it’s a combination of some software, some production line control, and cameras and printing equipment to make that happen, explains Walsh.
Many manufacturers don’t have visibility beyond the first shipping location, he points out. Radio frequency identification (RFID) isn’t going to help at the item level once the case or pallet has been received and broken down at a distributor’s or retailer’s facility, he suggests. Other technologies such as bar codes (including 2 dimensional bar codes) and human readable labels that help associate individual items with their “parent” case or pallet and a database containing that information can support item-level visibility. An Internetbased database can provide various levels of access to those records for the original manufacturer or importer and its supply chain partners.
A critical link is to require distributors to keep accurate records, says Walsh. That’s the way the e-pedigree laws are set up. The records can be electronic or paper, and you don’t have to share databases, he points out. What is important is that the items can be tracked through the supply chain should that become necessary. At points along the supply chain where having real time access to location and status information is beneficial, technologies come together to support that need. If controlling counterfeiting, loss, and product diversion is a goal, some covert technologies can also be employed, though suppliers such as Videojet are reluctant to provide much detail on those methods publicly (they and other suppliers will discuss them in confidential meetings with supply chain managers).
For a sense of some of the applications and benefits users are deriving from current and developing technologies, here are some current examples.
A test of radio frequency identification technology (RFID) in the Dutch food supply chain may have helped prove the viability of using the technology to improve track and trace capabilities and provide an acceptable return on investment. Begun in 2005, a pilot “fresh chain” project used 2,500 RFID-equipped crates to transport and track fresh-cut vegetables through an entire supply chain. During the project, participants could access real time information on shipments via a central database.
“We were the first to use the latest RFID standards and latest generation of RFID technology,” says René Bakker, retail director at Schuitema. There were some delays, says Bakker, because, at the time, RFID had not been used in this manner. But, after two years, Bakker says Schuitema and its supply chain can demonstrate “excellent results.”
The technology permitted crates of vegetables to be tracked along the entire supply chain with 99% to 100% accuracy. All parties, from the suppliers to store shelf, could check progress at every link in the chain. This helped prevent distribution errors.
Coupled with temperature monitoring, the pilot demonstrated how quality and availability of product could be improved.
A similar pilot at Container Centralen, the crate pool manager, helped improve crate pool management. The project also examined whether RFID on crates supplied by Container Centralen could be profitable when moving products including potatoes, vegetables, and fruit. The return on investment averaged 2.7 years. An important precondition is that all chain partners must participate.
“Vers Schakel has brought the large scale roll out of RFID in the logistics chain a major step closer,” says Bakker. “We have proven that RFID is indispensable in improving the chain in a profitable way,” Bakker adds.
Food and agricultural supply chain are targets of other track and trace initiatives. The Hawaii Department of Agriculture selected Lowry Computer Products to integrate Global Ranger’s iMotion sensorbased platform and Motorola hardware into a “field to fork” solution. Hawaii’s Department of Agriculture will conduct a statewide pilot to track the route of produce moving from the grower to the distribution center and then to the retail store and, ultimately, to the consumer. The pilot will provide an audit trail and identifiable standards in food safety, quality, branding, and intellectual property using RFIDbased technology.
The pilot involves participation by growers, distributors, and retailers. Lettuce, tomatoes, and strawberries were scheduled to be included in the pilot, which would expand to 5,000 farms within three years.
“For the most part, farmers are doing this on their own dime,” says John Ryan, administrator for the Quality Assurance Division of Hawaii’s Department of Agriculture. “But we think RFID tags will eventually go down in price to less than a cent. When that happens, it will be much less expensive to adopt,” he continued.
For this pilot, each box and pallet of produce will be pre-tagged in the field with a waterproof RFID label. RFID read points will be located at various zones at each facility, and data will be collected using a combination of Motorola handhelds and RFID portals and fixed readers.
One of the goals of the state officials is to be able to remove at-risk produce from the supply chain in under an hour.
Another food-safety initiative is RFIDbased GREENTrace. GREENTrace uses RFID and global positioning systems for end-to-end visibility. From the field, where bins are tagged, GPS-enabled handheld readers will associate data on the produce with weight and temperature and other sensor technologies. All of the data on product status, condition, and location will be communicated over InSynch Software’s GREENTrace. As produce moves along user-defined routes, deviations from expected times and conditions will trigger realtime alerts that are sent to “process owners.”
The GPS capability will provide data down to the level of the location where the product was picked, which could prove beneficial in a contamination-related recall situation.
Keeping track of containers, WhereNet’s yard management system processes 350,000 twenty-foot-equivalent units (TEUs) of containers per year for cross dock and transload on US East and West Coasts. Performance Team, a third party logistics company (3PL), deployed the system to help reduce labor costs and increase productivity and throughput at its Los Angeles/Long Beach and Seattle/Tacoma facilities.
Performance Team initially began using the yard management system in 2005 at its Santa Fe Springs, CA transload facility. Increasing volumes at LA/Long Beach and Seattle/Tacoma led Performance Team to deploy the system before it started handling peak volume for its retail and manufacturing customers. By applying specific business rules, the 3PL was able to automate 90% of its dock door transactions. During the three-week deployment, Performance Team took one week to configure the system and create business rules, add carriers and build forms. The third week included formal training for office and warehouse workers and equipment control personnel.
NYK Logistics, another 3PL, combines the yard management solution with RFID and real time location technologies at its Long Beach facility and recently added the same WhereNet system in Chesapeake, VA, which processes 45,000 containers per year.