Real-world RTI pool tracking projects with RFID are popping up like mushrooms in the forest. This text explains the technology and lets the reader in on useful hints before initializing an RFID project.
RTI or returnable transport item, as it stands for, refers to
all kinds of transportation packing assets that are used for
carrying and transferring goods throughout the supply chain, such
as containers, bins, pallets, racks, crates and carts. They are
reusable and circulate the supply chain until their end of life. To
share costs and risks, and assure a sufficient RTI pool, a group of
companies often share a common pool of RTIs, which is managed by an
RTI pool operator. In other cases the RTI pool operator might be
the pool owner, who rents its RTIs to its customers, but the pool
owner can just as well be a manufacturer, supplier, retailer
RTI pool owners have been using RFID for many years, primarily
in closed loop systems and mostly with high-value RTIs, but RFID is
starting to become popular in open loop systems and low-value,
high-volume RTIs as well. As long as the system is future-proof and
follows common standards, the pool owner, but also the other
members in the supply chain, will experience smooth operation and
increased efficiency in the movement of assets, with a fast ROI.
Reports on successful implementations and pilots in the
real-world are galvanizing retailers and pool owners into
HOW ARE RTI POOL OWNERS LOOSING MONEY?
RTIs are reusable assets and thereby considered green and cost
efficient compared to so called single-use or one-way assets, that
work under the "ship and forget" principal. However, the difficulty
in tracking reusable RTIs results in productivity, labor, cost and
time inefficiencies. With an average annual shrinkage rate of
anywhere from 3-9% and a breakage rate of 9%, RTI pools can cause
large expenses. To solve this, companies spend money requiring
additional logistics assets and hiring adequate labor to manage
Many pool owners without RFID are lacking insight in how large
their RTI pools actually are, making it even harder to manage them
and detect problems such as shrinkage and poor condition of the
RTIs. The lack of visibility causes both pool owners and renters
difficulties in adapting to new conditions, such as new
routes-to-market, new customers and extending supply chains,
changes in manual processes, and labor and time shortages. This
causes errors and problems, such as unverified arrival and
departure records, longer cycle times, shrinkage, hoarding, supply
chain bottle necks, inefficient product recalls, delayed orders and
inaccurate shipping. The loss of visibility and control, once the
returnable assets leave the owner's facilities, is
To avoid the problems mentioned above, pool owners are acquiring
additional RTIs to make sure the pool is sufficient. They are
increasing the time and resources spent on inventory, tracking and
management of the RTIs, as well as hiring extra personnel to clean
up the mess of inaccurate orders and delayed shipments. Summa
summarum - they are spending a ton of money on double-proofing good
customer service, without certainty that it will be sufficient.
RFID IN ACTION - HOW DOES IT WORK?
Since RTIs need to be tracked while they are in storage as well
as when they are on the move, RFID readers should preferably be
installed in all locations where the RTIs travel. This covers
everything from storage areas to transportation
A short description of the system could sound something like this.
When RTIs arrive with goods to the different locations of the
supply chain, fixed (installed by gates and in storage areas) or
mobile RFID readers (in the hands of employees) will scan the RFID
tags on the RTIs. The information obtained by the readers could
then be shared with the appropriate members of the supply chain
according to the picture below*.
KEY BENEFITS OF IMPLEMENTING RFID
An RTI pool can travel through the supply chain from suppliers
to manufacturers to retailers etc. even all the way to the
end-customer's doorstep. Implementing RFID in the supply chain will
bring benefits to all interest groups involved. But, the most
significant beneficiary of the RFID implementation will, in most
cases, be the pool owner.
First of all, the size of the RTI pool can often be shrunk
significantly due to reduced shrinkage and optimized management.
That alone brings pool owners huge cost savings. Secondly, there is
a reduced risk of non-availability of RTIs, which in the worst case
could stop production and cause customer losses. Thirdly, customers
have reported that the individual RTIs tend to be taken better care
of during their journey, once RFID has been implemented. The reason
for this is because it is possible to pinpoint exactly what has
happened to the RTI at what stop of the journey. Visibility and
transparency and the possibility to track each item as a unique
item, leads to increased responsibility, which results in less
shrinkage and damages of the RTIs.
Studies have shown that implementing RFID (on an average) will
bring RTI pool owners the following benefits:
- ROI in less than 12 months
- 5.5% cost reduction in asset investment
- 14.1% reduction in overall RTI stock size
As stated earlier, all parties in the supply chain - not just the
pool owner - will benefit from RFID tracking of RTIs. Throughout
the supply chain, the pool owner and renters will experience:
- Faster authentication and counting, since RFID does not require
line of sight and multiple tags can be scanned simultaneously
- Less human errors due to more accurate and automated
- Transparency in operations
- Cost reduction (e.g. premium freight, more compact RTI pool
and/or emergency packaging)
- Improved product recall
- More accurate billing and improved customer service
- Overall savings for the pool owner will allow a 22% cost
reduction on trip fees for the retailers
RUNNING AN RFID PROJECT
Before initializing an RFID project it is important to analyze
the tracking needs of the company, calculate the ROI of an RFID
project, determine the budget available and in what time the RFID
system needs to be in place. After deciding that RFID is worth
investigating further, there are some decisions that need to be
thought trough carefully before the project kicks off, such as who
to do business with and what the requirements of the system
1. CHOOSE PROVIDER(S) AND SYSTEM(S)
When implementing RFID there is a few crucial decisions that
have to be made when it comes to choosing providers:
- What tag manufacturer?
- What RFID reader manufacturer?
- What software developer?
- What system integrator?
These can all be different companies or the same one. Usually it
is a good idea to choose providers that are partners between
themselves and thereby familiar with each other's products.
Whoever is chosen, it is important to assure that the providers
have standardized products that are suitable for all operations in
question and all necessary geographical areas of business.
"Best practice recommendations" of RFID implementations in the
supply chain packing management have been released by e.g. Odette,
a standard setter of supply chain systems in the automotive
industry. Check out more about the technical recommendations of
ISO/IEC committees have been involved in the making of the
recommendations, ensuring that the recommendations are compliant
with all relevant ISO/IEC standards. It is also recommended to look
into other industry related recommendations such as EDI messaging
for logistics and Global Transport Label to ensure compatibility
with the systems. In the year 2011 a working group called "RTI
Management Using GS1 Standards" was formed to standardize RTI
processes, technology, identification schemes and
By choosing an RFID system that follows standards, companies can
expect a faster return on investment, possibly even within a few
months. Standardized products tend to be more affordable due to
larger production amounts and they are more likely to integrate
easily with existing and coming applications and systems, both
within the company and with the systems of present and future
partners and customers. The system also needs to be
compatible with standard barcode systems and allow identification
with barcode readers when needed. It is also preferable that the
system is flexible enough to allow adopting RFID in other
operations as well such as management of tools, industrial
equipment, personnel, etc.
2. GO ACTIVE OR PASSIVE?
Asset tracking with RFID is usually the right choice when it
comes to big and medium-sized companies and supply chains, but
should you choose active or passive RFID tags? Active tags are
equipped with an internal power source making them able to
constantly send out real-time information and they allow reading
from longer distances. Passive tags do not possess these qualities
but cost about 25 times less than active tags. Then again, since
active tags allow longer reading distance the total amount of
readers needed can be smaller. When choosing between active and
passive tags, ask yourself the following questions:
- Is the company dependent on real-time visibility or is it
enough that the RTIs are read only at certain reading points?
- Are internal memory and sensory capabilities essential for your
project now or might they be in the future?
- Does the RTI type/material/construction or the environment in
question require a certain kind of tags? Your system providers will
be able to help you with this question.
RTIs are often scanned with both fixed and mobile RFID readers.
For more information about creating an optimized reading
environment - read these articles:
"RFID gates - the technology behind them" by Sini Syrjälä and
"Managing environmental issues related to RFID" by Jessica
Säilä. Jessica discusses how to implement RFID in fitting rooms,
but the text has some useful points for RTI supply chain
implementations as well.
3. CHOOSE SOFTWARE APPLICATIONS
What applications are needed depends hugely on the business and
supply chain in question. Your system providers will be able to
help you by suggesting applications that similar customers have
These are typical RFID implementation in RTI supply chain and on
the shop floor of retailers:
The complex supply chains of today are experiencing a pressure
to deal with ever more demands for tracking information and fast
and secure movement and storage of goods. The costs of RTIs are
rising making it even increasingly important to ensure the
whereabouts and the condition of the assets. A future-proof system
that offers flexibility and smooth operations is more and more
often achieved by implementing RFID.
Not to perish so fast by Jessica Säilä
It's beginning to look a lot like RFID Christmas by Sini
From Post-IT notes to RFID by Jessica Säilä
Did you know that there are in European market 3.5 million RFID
tagged containers (flower and pot plant trolleys) in
circulation? by Atte Kaskihalme
RFID gates - the technology behind them by Sini
The value of RFID for RTI management, Alexander Ilic,
Jason W.P.Ng, Paul Bowman, Thorsten Staake, 2009
A Return on Returnables: How RFID RTI Tracking &
Management Provides Value, Fluensee, 2010
RTIs, RFID Journal