Mhlnews 2149 Innovation01 00

Pallets Connect the Dots in the Logistics Picture

June 1, 2006
At CHEP's Innovation Center, researchers work to use the most basic of material handling devices-the pallet-to take maximum advantage of RFID.

To more clearly see the whole logistics fulfillment picture, companies must connect the dots. Currently, one way to connect those logistics dots is with RFID. At least that's where CHEP USA (Orlando, Fla.) is directing its research efforts.

At its Innovation Center (Daven-port, Fla.), the company is taking an equipment-neutral stance as it looks for ways to provide customers with real-time inventory information as well as asset tracking. Not focused on any specific manufacturer's equipment, or any specific methodology, the company has found significant ways to improve tag readability and tag endurance.

While CHEP is best known for its pallet and container pooling programs, it has been an early adopter and stan-dard-bearer for RFID. "We were founding members of Auto ID at MIT [Massachusetts Institute of Technology]," says Puneet Sawhney, program manager RFID, "and we're active in the EPCglobal standards-setting arena."

CHEP operates everywhere from Argentina to Zimbabwe and 40 more countries in between. Because of its global business relationships, it has a global laboratory to work out its theories and applications. "We've learned, for example, that Brazil is our best market for testing new technologies," explains Sawhney. "About 80% of the business activity in Brazil is centered in two cities so it's easy to roll out a new initiative." He adds that companies in Brazil also seem more open to testing new things.

What's new in RFID?
As the name, Innovation Center, implies, much of what CHEP is doing in the 12,000 sq.-ft. area called the Validation Space, is solutions looking for problems. Its engineers are trying to anticipate problems in addition to solving known issues. The center devotes the majority of its space to experimental pallet designs and material.

Sawhney is quick to note that none of what happens in the building is Star Wars technology. Many of these applications are in use and proving themselves in locations around the world. "Because we've been experimenting with RFID for four or five years," he says, "we've resolved a lot of issues. We've been able, through collaboration among vendors and manufacturers [in the RFID community], to create standard solutions."

Those standards, such as EPCglobal and GEN2, he says, have had numerous benefits for all RFID users. For example, the cost of tags is still considered a stumbling block by many potential users. While the five-cent RFID tag is still a long way in the future, "The cost has come down dramatically," says Sawhney. "Tags that used to cost a dollar are now 35 cents. And as we move into more pooling applications we are reaching critical mass and will be able to charge on a per-trip basis, rather than a per-tag basis."

Lift trucks are the sweet spot for RFID
Another thing experimentation has shown is that portal arrays of RFID scanners are expensive, prohibitively so for large distribution centers. "The future for RFID readers is in mobility," says Sawhney. "Lift truck readers and handheld readers will yield real benefits to RFID. It just makes more sense to have more flexibility in the readers."

Sawhney describes RFID as a technology that is really about collaboration. RFID, and its ability to provide real-time information, will enable the global market to move at the same pace. "It's about looking outside the four walls of your building, because the business world is flat; no boundaries [will exist] between countries when it comes to sharing information via RFID."

Putting RFID tags on pallets is like putting a license plate on a car in a demolition derby. Nearly one-third of the pallets being returned to CHEP service centers require some type of repair. Placement of a tag to prevent abuse from lift truck tines and enhance readability has been a subject of much research. CHEP's solution has been to locate the tag on the center leg of its block-style pallet. That location is safe from most abuse. The bright orange color of the tag also provides visual confirmation that the tag is in place.

Tags on the inside block are wrapped so that antennas are visible on two faces of the block. The chip in the tag is positioned on a flat surface of the block so that a hit to the block's corner, which might sever an antenna, will not harm the data-carrying part of the tag.

The laminated dual-antenna tag has a dual intent and a dual payback. CHEP uses a 250-bit, two-page tag. One page is for the customer's product information and one page is for CHEP to use for asset tagging. "With this application of RFID," says Sawhney, "the user has real-time knowledge related to inventory movement. From this follows the benefits of being able to plan labor and equipment scheduling."

Data collection application
The tag used by CHEP is called a "three-way" tag because it also carries a bar code and human-readable information. There are instances where all three of these elements of data gathering come to play, says Sawhney.

While he is not at liberty to reveal the user for this application, Sawhney gives an example of how data is collected and managed by a cosmetic manufacturer. When an IBC (CHEP leases many intermediate bulk containers, IBCs.) used for shipping a chemical in the manufacturing process leaves a CHEP service center, the tag is interrogated with an RFID reader. That container's data enters the tracking system telling the manufacturer that the container is on its way.

When the container is received at the manufacturer's plant, the tag is read again, typically with an RFID reader. The container is filled and the tag is interrogated again when it ships. As the container is shipped from the manufacturer, an advanced shipping notice is sent to the prod-uct's packer. At the packer's dock the bar code label portion of the tag is scanned if RFID equipment is not being used. If necessary, the container might be sent on to a copacker that has no form of automatic data collection. If that's the case, the co-packer can read the human readable numbers on the label.

All along the way, the numbers on the label are automatically entered into a computer, or manually in the case of the co-packer that has no automatic data collection hardware. Each time the data is entered, it's sent to a specific Web site. Authorized parties can determine the exact location of the product and, particularly important to CHEP, where the IBC is located. CHEP also provides the track and trace software to enable this process.

"The focus is on traceability," says Sawhney. "It's real-time tracking, beginning with our release of an empty container or pallet, right through to the retailer's backroom."

Extensions of this technology are going beyond the back room to the store shelf, he says. "With this kind of information," adds Sawhney, "all parties of the supply chain have visibility to real-time information. It's granular information that can be used by marketing managers timing the release of a new product, labor and equipment schedulers needing to know how long it takes a pallet to go from point A to point B, inventory managers knowing how much lead time they will need to have just-in-time replenishment, and so forth."

Experiments at the Innovation Center have led CHEP researchers to conclude that in most situations, putting the RFID interrogator on the lift truck is a more practical way of gathering data than passing through a portal scanner as shown here.

The bright orange three-in-one RFID tag is located on the center block of pallet to protect it from damage by lift truck tines or abuse while in a trailer.

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