29
Fri, Nov
0 New Articles

RFID: Payback for Manufacturers

Enterprise Resource Planning / Financial
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

The RFID mandates issued by Wal-Mart, the DoD, and others place a significant burden on suppliers, but of course this kind of thing has happened before. EDI, for instance, required major expenditures on software, systems development, and ongoing VAN fees. RFID deployment has its own systems costs--for integration to the ERP; for an ongoing supply of tags; for the network infrastructure, portals, and readers; and for "savant" software that can sort and select specific data from the myriad signals emanating simultaneously from thousands (or tens of thousands) of tags. And for many manufacturers (particularly makers of "low-impact" products like groceries and household commodities), tag cost alone is a significant barrier to RFID mandate compliance.

Industry observers and analysts were quick to note that, in order to justify the cost of RFID compliance, manufacturers would need to find other ways to make RFID technology pay off for them. Thus, an unplanned benefit of the movement toward RFID is that manufacturers have renewed their focus on business process improvements in the factory. Smart manufacturers are already thinking well beyond RFID "slap and ship."

Companies that are considering RFID will have to choose one of two paths. On the first path, there is no clear return on investment (ROI) other than the follow-on benefits of being in compliance with customer mandates. The second path leads to where the real benefits can be found: RFID can be used to make business processes more efficient.

Not all companies can benefit equally from internal use of RFID technology, but many (or even most) can benefit from process improvements that are driven by data capture. This is especially true if the flow of real-time data is fully integrated to the ERP such that ERP processes become automated. The amount of benefit you can get from RFID is relative to the performance level of the company. In looking for potential RFID benefits, find the processes in which barcodes are currently being used.

Companies that take the second path will find opportunities to eliminate tasks, save time, and add a new dimension of value through strategic application of more accurate and timely transaction data. Although this approach is likely to require a bigger initial investment, operating cost reductions can easily justify it. In "closed-loop" applications in the factory, even the gap between RFID tags and barcode labels begins to narrow. Each time the tag is read or written to, the cost of the tag will continue to go down. In contrast, label cost accumulates over time.

The world of data capture has become more complex in recent years. Gone are the days when one technology or symbology was all that a manufacturer needed to meet its data capture needs. RFID creates compelling opportunities to change how the data is captured and used, but you can be sure that barcodes and RFID will co-exist for a long time. These are the key questions to ask: Where is the barcode method failing, and what can RFID do that barcodes cannot do?

Here's one example of the answer to those questions: RFID can report finished production and reconcile the product quantities with the finished goods warehouse. Picture the end of a production line, where product is being put onto pallets. The pallet contains a barcode that is associated with the items put on the pallet. Such a barcode is referred to as a "license plate." Full pallets are picked up by a forklift operator. Each time a pallet is picked up, the forklift operator is supposed to scan the pallet barcode to record the production yield and back-flush the components used. The same transaction also automatically receives the finished product into a generic holding area in the finished goods warehouse. We'd like to think that this happens correctly every time a pallet is moved, but it doesn't. The forklift operator's concern is to move the material quickly, so the barcode scan is not always done. And even if it is done, the barcode label may be missed so the read may not be completed.

Then, a material handler from the warehouse moves the finished product away from the generic holding area. He scans the barcode and moves the material to a finished goods location and completes his transaction. Now the warehouse has finished product on the records, but because the first scan never happened, the production was never reported as being completed. Every day, the finished goods warehouse reports how much finished product is put away and the report is compared with what was produced, at which time errors are found. It is commonplace in many factories for skilled personnel to spend significant time hunting down just where the transaction error occurred so that the error can be reconciled.

Fixing the Problem with RFID

The problem could be fixed if the pallets had RFID smart tags. A smart tag has both a bar code and an RFID chip. An RFID portal could be put in place at the passage point between the production area and the finished goods warehouse. As finished goods fill the pallet, the production number is encoded into the smart tag. This way, when the forklift operator takes the finished goods from the production lines to the generic holding location in the warehouse, passing through the portal, the transaction is completed every time, without doing a barcode scan. (Read-rate accuracy on slow-moving tags is not a problem.)

Similarly, RFID could be deployed anywhere in the factory that a reusable tote or container is utilized as product travels from one work center to another. Portals can be positioned in the automatic conveyer lines to automatically record the production transaction.

Take the Right Path

Many companies seem to view RFID utilization as one big, expensive deployment of challenging new technology. This leads them to try to identify everything that can be (or needs to be) done, which has the effect of stalling the whole effort. The best way to start is to focus on the small benefits that will add up to a big benefit. This can be called your "benefits stack."

In factory applications, RFID utilization can be far less difficult than RFID deployment in high-volume distribution. So rethink the top-down approach to the business case for RFID. Consider a bottom-up approach in which you start by fixing one problem at a time. It is surely more efficient to start with small, inexpensive tactical deployments, and the first solution doubles as your proof of concept. Then, following your "benefits stack" priorities, the small solutions combine to solve the bigger systemic business problem.

Part 2 of this article will look at more ways that RFID can be used to create value in the manufacturing process and more ways that potential benefits can be gained.

Anthony Etzel is VP of Data Capture Solutions at RTTX: RealTime Technologies, Inc. He has been designing and deploying automatic data capture solutions in manufacturing for over 20 years.

BLOG COMMENTS POWERED BY DISQUS

LATEST COMMENTS

Support MC Press Online

$

Book Reviews

Resource Center

  • SB Profound WC 5536 Have you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application. You can find Part 1 here. In Part 2 of our free Node.js Webinar Series, Brian May teaches you the different tooling options available for writing code, debugging, and using Git for version control. Brian will briefly discuss the different tools available, and demonstrate his preferred setup for Node development on IBM i or any platform. Attend this webinar to learn:

  • SB Profound WP 5539More than ever, there is a demand for IT to deliver innovation. Your IBM i has been an essential part of your business operations for years. However, your organization may struggle to maintain the current system and implement new projects. The thousands of customers we've worked with and surveyed state that expectations regarding the digital footprint and vision of the company are not aligned with the current IT environment.

  • SB HelpSystems ROBOT Generic IBM announced the E1080 servers using the latest Power10 processor in September 2021. The most powerful processor from IBM to date, Power10 is designed to handle the demands of doing business in today’s high-tech atmosphere, including running cloud applications, supporting big data, and managing AI workloads. But what does Power10 mean for your data center? In this recorded webinar, IBMers Dan Sundt and Dylan Boday join IBM Power Champion Tom Huntington for a discussion on why Power10 technology is the right strategic investment if you run IBM i, AIX, or Linux. In this action-packed hour, Tom will share trends from the IBM i and AIX user communities while Dan and Dylan dive into the tech specs for key hardware, including:

  • Magic MarkTRY the one package that solves all your document design and printing challenges on all your platforms. Produce bar code labels, electronic forms, ad hoc reports, and RFID tags – without programming! MarkMagic is the only document design and print solution that combines report writing, WYSIWYG label and forms design, and conditional printing in one integrated product. Make sure your data survives when catastrophe hits. Request your trial now!  Request Now.

  • SB HelpSystems ROBOT GenericForms of ransomware has been around for over 30 years, and with more and more organizations suffering attacks each year, it continues to endure. What has made ransomware such a durable threat and what is the best way to combat it? In order to prevent ransomware, organizations must first understand how it works.

  • SB HelpSystems ROBOT GenericIT security is a top priority for businesses around the world, but most IBM i pros don’t know where to begin—and most cybersecurity experts don’t know IBM i. In this session, Robin Tatam explores the business impact of lax IBM i security, the top vulnerabilities putting IBM i at risk, and the steps you can take to protect your organization. If you’re looking to avoid unexpected downtime or corrupted data, you don’t want to miss this session.

  • SB HelpSystems ROBOT GenericCan you trust all of your users all of the time? A typical end user receives 16 malicious emails each month, but only 17 percent of these phishing campaigns are reported to IT. Once an attack is underway, most organizations won’t discover the breach until six months later. A staggering amount of damage can occur in that time. Despite these risks, 93 percent of organizations are leaving their IBM i systems vulnerable to cybercrime. In this on-demand webinar, IBM i security experts Robin Tatam and Sandi Moore will reveal:

  • FORTRA Disaster protection is vital to every business. Yet, it often consists of patched together procedures that are prone to error. From automatic backups to data encryption to media management, Robot automates the routine (yet often complex) tasks of iSeries backup and recovery, saving you time and money and making the process safer and more reliable. Automate your backups with the Robot Backup and Recovery Solution. Key features include:

  • FORTRAManaging messages on your IBM i can be more than a full-time job if you have to do it manually. Messages need a response and resources must be monitored—often over multiple systems and across platforms. How can you be sure you won’t miss important system events? Automate your message center with the Robot Message Management Solution. Key features include:

  • FORTRAThe thought of printing, distributing, and storing iSeries reports manually may reduce you to tears. Paper and labor costs associated with report generation can spiral out of control. Mountains of paper threaten to swamp your files. Robot automates report bursting, distribution, bundling, and archiving, and offers secure, selective online report viewing. Manage your reports with the Robot Report Management Solution. Key features include:

  • FORTRAFor over 30 years, Robot has been a leader in systems management for IBM i. With batch job creation and scheduling at its core, the Robot Job Scheduling Solution reduces the opportunity for human error and helps you maintain service levels, automating even the biggest, most complex runbooks. Manage your job schedule with the Robot Job Scheduling Solution. Key features include:

  • LANSA Business users want new applications now. Market and regulatory pressures require faster application updates and delivery into production. Your IBM i developers may be approaching retirement, and you see no sure way to fill their positions with experienced developers. In addition, you may be caught between maintaining your existing applications and the uncertainty of moving to something new.

  • LANSAWhen it comes to creating your business applications, there are hundreds of coding platforms and programming languages to choose from. These options range from very complex traditional programming languages to Low-Code platforms where sometimes no traditional coding experience is needed. Download our whitepaper, The Power of Writing Code in a Low-Code Solution, and:

  • LANSASupply Chain is becoming increasingly complex and unpredictable. From raw materials for manufacturing to food supply chains, the journey from source to production to delivery to consumers is marred with inefficiencies, manual processes, shortages, recalls, counterfeits, and scandals. In this webinar, we discuss how:

  • The MC Resource Centers bring you the widest selection of white papers, trial software, and on-demand webcasts for you to choose from. >> Review the list of White Papers, Trial Software or On-Demand Webcast at the MC Press Resource Center. >> Add the items to yru Cart and complet he checkout process and submit

  • Profound Logic Have you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application.

  • SB Profound WC 5536Join us for this hour-long webcast that will explore:

  • Fortra IT managers hoping to find new IBM i talent are discovering that the pool of experienced RPG programmers and operators or administrators with intimate knowledge of the operating system and the applications that run on it is small. This begs the question: How will you manage the platform that supports such a big part of your business? This guide offers strategies and software suggestions to help you plan IT staffing and resources and smooth the transition after your AS/400 talent retires. Read on to learn: