Improve Supply Chain Efficiencies with RFID

Feb. 1, 2001
This article is part of a presentation made at the North American Material Handling Conference.

Improve supply chain efficiencies
through better management with RFID

by Daniel P. Herbert, COO, Container And Pallet Services.

Editor’s note: This article is part of a presentation made at the North American Material Handling Conference.

As the role of the Internet technologies industry grows exponentially, technology is a necessary part of the material handling industry’s long-term goals.

Reusable material handling equipment is the catalyst for effective RFID solutions. Effective decision-support tools make RFID meaningful. In other words, simply having RFID capability is meaningless unless there are means of processing and utilizing the information.

I see five major trends pulling RFID technology into practical application within the industry.

• Need for complete knowledge of supply chain activities to increase customer loyalty and retention;

• Need to completely integrate business processes flows;

• Desire for vendor managed inventories;

• Ability to adapt and improve processes in order to meet and exceed customer expectations;

• Need for complete awareness of current business practices and trends.

Let me explain. As companies seek customer loyalty, trust and long-term relationships, it is becoming increasingly important for the supplier’s and the customer’s processes to be in concert with one another and, often, to attach end to end. As a result, vision into the supply chain is becoming more and more vital. This view into the supply chain gives more impetus for future complete integration of business processes. The closer we get to this integration the more we will see a drive for more vendor-managed inventories. We must all seek ways to improve these processes in order to continue to meet and, over time, exceed our customers’ expectations. This will make the automotive supplier industry better as a whole.

The Internet will be a major factor in the future. As we all know, the growth in the Internet and its capabilities are moving with enormous speed.

In the automotive industry, there are new alliances and dot-coms springing up all over. While e-commerce and e-fulfillment are a major short-term focus, distribution center process improvement is a high priority. One of the most significant events is the growth of radio frequency identification in the industry.

Radio frequency identification, or RFID, capabilities are expanding in their technology and applications in tandem with Internet growth. We have all been touched by RFID in some aspect, whether it is on a toll road, or at the checkout stand at the grocery store. In manufacturing, applications include in-plant part location, asset identification and tracking, security controls for locking/unlocking, and the identification of specific item movements for inventory management and logistics applications.

Characteristics of RFID

RFID offers several unique characteristics that are improvements to previous models for identification and tracking of assets.

• Does not require a line of sight or direct contact to operate;

• Functions under an extremely wide range of environmental conditions;

• Can provide a high level of data integrity;

• Is very difficult to counterfeit;

• Requires little labor to use.

RFID systems require a tag that contains information about a particular item. A passive tag is a "read only" file that sends static information to the system. An active tag is a read/write tag. These also send information to the system; however, they are also capable of accepting new information that they receive back from the system. Perhaps they record on the tag when it passes through a particular location or the temperature of the room at a given point in time.

Some tags can write new information only once, others can do it many times. The system requires an antenna (with single or dual functions) to pick up the radio frequency waves. An RF transceiver generates radio frequency and filters and controls. A reader manages information flows and meets system requirements set up by the users. Finally, a system needs software to interpret and direct the in-formation collected from the tags. It is important to have experienced process and systems integrators.

The RFID system needs the following elements to ensure success:

• Well-defined product flow and processes;

• Consistent, controlled processes;

• Processes must have the capability to meet customer demand;

• Information demands of the process need to be well defined;

• Defined data requirements lead to appropriate RFID system requirements.

The need for accuracy and consistency in order to get meaningful data and, subsequently, value-added information is paramount.

When undertaking an RFID project for your material handling process, be sure to fully explore and understand the scope of your needs. Test the viability of tracking the material in your specific environment. Make sure you will be provided with meaningful decision support tools with maximum visibility for management. ADF

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