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Intelligent logistics - Closing the loop on transferable assets in logistics with RFID

In the beginning there were only giant, unwieldy tags and readers that cost as much as the assets they tracked. In its infancy, RFID was an expensive solution for tracking expensive assets.

Author: Carl Michener

As is the way with all technology, RFID has become more nimble and affordable. Now that tags can cost less than 10 cents apiece, use of RFID has spread around the world. From fish to fruit, military assets to cardboard boxes, RFID is smoothing out logistics processes, ensuring freshness and reducing waste across industries. You'll find it in retail and fashion, supply chain, manufacturing and, more recently, perishables.

RFID is a superb tool for high volume logistics. Unlike barcodes, RFID tags can store detailed, item-specific information including size, colour, model number, price and other data. Information can also be added as the product travels. It can record time in, time out, date of inspection, information about modifications made, ambient temperature and more-from point of attachment to ultimate destination. All of this information can be read through cartons on thousands of tags with a single pass of a handheld RFID computer.


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Industry experts are quick to point out that although RFID is more hi tech than barcode technology, it simplifies processes to a greater extent. "Since barcode reading involves line of sight, the ability to read automatically requires a sophisticated conveyor and reader set-up. RFID is simpler," says Jorma Lalla, CEO of Nordic ID, a Finland-based manufacturer of handheld RFID computers. "The line of sight distinction is crucial. Think of delivery operations. If you were to install a fixed RFID system in your delivery vehicles, manual scanning would no longer be needed. Tracking becomes faster, automatic, and less susceptible to human error."

RFID has become so affordable that it's beginning to be used with one-way cartons and cardboard packaging material (slap & ship). One major European airline is now starting to ship their mission critical spare and replacement parts (also tagged) in tagged containers for easier batch retrieval.

Finding items in a shop and processing shipments in a warehouse are run-of-the-mill logistical challenges that RFID has been tackling for more than a decade. It's no secret that the apparel industry has been making very good use of RFID to keep items on shelves and streamline storeroom and distribution centre operations.

The next evolution in retail logistics processes is Distributed Order Management. The technology leverages detailed logistics data to calculate the optimal way to source a product as soon as an order is placed. It aggregates and prioritises orders from all sales channels, optimising orders from multiple locations and supplier sites. "It's a rules-based system that relies heavily on RFID to know where everything is," says Lalla. "When it's perfected it will bring us to a level of efficiency that we've been after, well, forever. But perfection is dependent on all systems operating in real time, and we're not quite there yet."

Efficiency up, spoilage down

Some of the newer challenges that RFID is tackling involve freshness, weight, and returnable transport item (RTI) control. From Taiwanese fruit to Brazilian fish, RFID is increasing profitability while reducing waste and ensuring freshness and availability.

Brazilian supermarket Grupo Pão-de-Açúcar (GPA) recently implemented RFID to solve some fishy business. Until recently, the boxes of seafood they deliver to individual stores made use of average weights. Fish don't come in a standard weight, and it was never practical to keep track of the weights of individual boxes. As a result, the actual weight of a box could be one or two kilos more or less than the average weight. A discrepancy of a kilo or two might not seem like much-and should even out over the course of many shipments-but with hundreds of stores, the numbers add up. Add the fact that it could cause managers to run out of fish prematurely, and you can see how this can be a problem.

The retailer has implemented RFID to replace the average weight with the actual weight, improving accounting and reducing out-of-stocks. A side benefit is less container attrition-since GPA knows where and when the boxes come and go, they are less likely to be expropriated or put to unintended use. "Reducing attrition is one of the principal benefits of returnable transport items," says Sander Merkx, Partner at Dutch Systems Integrator Mieloo & Alexander. "Our clients time-track their containers to tell if there's something wrong." When tagged skids or boxes come back later than expected-or not at all-it becomes obvious that they are being put to unintended use. "The information that RFID supplies is extremely granular, the data indisputable. That tends to keep everyone doing things as they should," summarises Merkx.


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A Taiwanese fruit producer, Je-Nong Cooperative Farm, has moved from cardboard to RTI boxes for fruit, but for different reasons. Produce is now delivered from farms right to its final destination in RFID-tagged boxes, reducing handling and eliminating the need for disposable cardboard. RFID tagging also helps with customs processes, thanks to temperature monitoring functionality. Tags monitor and record temperature and humidity within storage coolers. When conditions fluctuate too much, an alert draws the attention of personnel. Tags record atmospheric data, providing information that enables customs officers-especially in Japan-to quickly clear fruit shipments from quarantine. In the past, those sensors were manually monitored 24 hours per day, seven days a week, in order to maintain a record of conditions.

From military to run-of-the-mill

RFID technology is changing fast. As it gets more sophisticated, it gets simpler and less expensive. In 2005 the U.S. Army began testing RFID mesh networking, an asset location technology consisting of wireless mesh nodes using active UHF tags with powerful transmitters. It was an expensive, hi tech solution with bugs that needed working out. As of 2012, most of the bugs were gone. High-throughput, low-jitter, low-delay mesh networking just works, even as some elements of the network move out of range. They automatically form into independent networks, seamlessly coalescing when brought back within range.

Mesh has its advantages, but it's still an expensive solution. At its plant in Saltillo, Mexico, Daimler Trucks North America has found a far cheaper way to do essentially the same thing, albeit with assets that don't move much. Daimler equipped its yard trucks with RFID scanners that constantly create and update trailer inventory from passive trailer tags using 4G networking as they drive around the yard. 4G, combined with passive RFID and a yard truck going about its business shuttling trailers to and fro, has achieved much the same result as mesh technology-at a tiny fraction of the price.

Privacy, people and pigs

All of this is progress as you would expect: the world is waking up to the incredible efficiencies that come with RFID. But that's just the start. Emerging uses for logistics push the boundaries of technology and, where people tracking is concerned, privacy.

PlayPass, an event organization and marketing firm, has developed BandID-a distinctive, woven smart bracelet that carries an RFID tag. Bracelets are mailed to concertgoers ahead of time, allowing crowds to flow through checkpoints and eliminating choke points. Different bracelets can allow for different clearances as well-certain tags can grant VIP access. BandID also acts as an internal control. It restricts the movements of employees at massive events such as Belgium's Rock Werchter, where some tend to the needs of rock stars, while others are allowed only in food service areas.

BandID also enables aggregate reading, to monitor the number of people in any given area for crowd control in these massive 300,000 visitor events. A new trend in such events is to combine RFID reading with social network fun-by scanning your wristband at a kiosk, you can let friends all over the world know that you are at a certain stage, tent or podium. While novel and cool, such uses of RFID can also be contentious: anyone with a reader can monitor the movement of concertgoers or, for that matter, any one wearing a wristband.
 

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Privacy is not an issue for pigs, however. "There are more pigs in Holland and Denmark than there are people. Cattle too," says Hielke van Oostrum, head of Sales & Operations at Nordic ID for the BeNeLux and Scandinavian countries. Demands for food traceability are of course growing at regulatory and consumer levels. "We're seeing the use of low frequency tags for animals for vaccination purposes," continues van Oostrum. 'I don't think it will be long before the food sector moves to ultra high frequency for mass reading." He acknowledges that farm trials have been taking place since 2010, with good results.

Into the future

RFID has come a long way since simple asset tracking, and it's got much further to go. Our experts agree that the future consists of RFID-tagged RTIs. "It might take as long as ten years," says Merkx. "Tagging is always the bottleneck. But it's either pay for disposable containers for years and years, or invest in tagged RTIs. Do the math and the answer becomes obvious." van Oostrum notes that logistics processes are facilitated with, and often driven by, RTIs. "Just one grower of Hortensia flowers might use 250,000 tags," he observes. "The growth in RTIs is driving wholesale RFID adoption. It won't be long now before most logistics processes are RFID-enabled."

Jorma -Sander -Hielke

[Left] Jorma Lalla is CEO of Nordic ID, a leading manufacturer and provider of efficient store operations management with RFID for apparel and specialty retailers.

[Middle] Sander Merkx is a Partner at Mieloo & Alexander Business Integrators, a systems integrator based in Hoofddorp, Netherlands specialising in technology-enabled supply chain improvement.

[Right] Hielke van Oostrum is Director, Sales & Operations, Nordic ID, for the BeNeLux countries and Scandinavia.

2 comments on “Intelligent logistics - Closing the loop on transferable assets in logistics with RFID”

  1. Gravatar of Tim SmallwoodTim Smallwood
    Posted 10 January 2014 at 01:19:41

    Very good post: we have been designing for RFID in the foodservice industry for some years. We started with tracking meal deliveries from the kitchen to dining areas in a 10,000 seat venue to make sure they arrived at the correct destination and at the right temperature, and, more importantly, if they didn't arrive, where they actually ended up.
    More recently in Hong Kong we've seen RFIDs embedded into melamine tableware so that each plate can be costed in the operation of a cashless cafeteria reading the employee ID and the plates on the tray.
    The practical application of RFIDs in the foodservice industry is only limited by the imagination.

  2. Gravatar of Hanna ÖstmanHanna Östman
    Posted 10 January 2014 at 15:21:57

    Thanks for sharing, Tim! Interesting stuff. As in most application areas for RFID, imagination (and perhaps courage) are the only limitations standing in our way.

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