Philips rolls out major RFID project in its semiconductor supply chain

Royal Philips Electronics’ Semiconductor division has deployed a major radio frequency identification (RFID) implementation of RFID in its supply chain in Asia. The project was developed in close collaboration with solutions partner IBM using Philips' RFID chips.

Philips’ Asian RFID project covers the tagging and tracing of wafer cases and carton packages for flows of goods between its manufacturing facility in Kaoshiung, Taiwan, and its Asia Pacific distribution center in Hong Kong. As a result of improving the business processes within the manufacturing and distribution supply chain, the successful implementation provides increased inventory turns, improved stacked lead time, enhanced delivery reliability, warehouse efficiency and improved customer service.

"Manufacturers and distributors worldwide are looking for proven business cases for RFID. Our decision to use RFID is based on evidence that the technology generates a positive business case for our supply chain," says Mathieu Clerkx, CIO & SVP supply chain management, Philips Semiconductors.

“The scale of Philips' operation using RFID dwarfs that of many other projects, which are very limited in volume,” says Hau Lee of Stanford University, a leading academic in the field of supply chain management. “It will act as an ideal reference case for the industry as a whole at a time when it is looking for proof that an RFID business case which matches their complexity and reach can be delivered today."

Philips is considering implementing the RFID solution throughout its Semiconductor division on a global scale, across its five semiconductor manufacturing facilities and three distribution centers in Asia Pacific, Europe and the U.S. The company also plans to support customer integration of RFID in their supply chain management processes.

In addition to IBM, which has provided the overall system integration for this project, tags will be delivered by Smartag and Tagsys, while readers will be delivered by Tagsys and printers by Zebra.

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