You may have read that major retailers are pursuing radio frequency identification (RFID) technology for more efficiency in distribution and inventory control. What that means for carriers, however, remains uncertain.
“I am not aware of anyone using RFID currently for supply chain management,” says Braxton Vick, senior vice president of corporate planning for Columbia, S.C.-based Southeastern Freight Lines. “The technology is in its infancy.”
Perhaps, but RFID is poised to become a toddler very soon. In October, Wal-Mart met with its top 100 suppliers to finalize plans to implement the first phase of RFID in 2004. And when Wal-Mart leads, others follow.
RFID compliance is one of the highest priority items facing consumer goods organizations today. “The clock is ticking,” says Gene Obrock, vice president operations at Henkel Consumer Adhesives, a company that develops, markets and distributes Duck brand products, including Duck Tape. Because of Wal-Mart’s recent announcements and anticipation of future announcements from retailers, HCA is implementing an RFID solution from Atlanta, Ga.-based Manhattan Associates, the company says.
Wal-Mart’s initial plan is to have its suppliers affix RFID labels, or tags, to individual pallets and cases, says John Sweitzer, director of logistics and transportation for Intermec Technologies, a provider of supply chain information systems. Intermec is one of a number of technology suppliers that has been meeting with Wal-Mart on its plans for introducing RFID. Sweitzer discussed the future of RFID systems in transportation at a recent meeting of the Technology and Maintenance Council of the American Trucking Associations.
An RFID tag contains a small computer chip, a capacitor and an antenna. A piece of hardware known as an RFID reader retrieves data from the tag by emitting a radio pulse. The capacitor in the tag absorbs a small amount of energy from the signal and transmits the data in the computer chip to the reader via radio waves.
Using RFID to track goods through distribution isn’t revolutionary but rather is an extension of the capabilities of barcode systems, Sweitzer says. Companies can store and read information on RFID chips about a pallet or individual item at any point from the manufacturer to the retail shelf. RFID systems can automate data collection by reading multiple tags simultaneously, at high speeds, from a typical range of 3 to 4 feet. They also can eliminate double entries because each tag emits a unique identifier rather than just a universal product code.
In the early phases, expect to see a combination of RFID tags and barcodes. As RFID tags begin to show up on pallets and containers, suppliers will continue to use barcodes to track individual items, Sweitzer says. In fact, the changes will be transparent to carriers at first, he says.
“I don’t envision carriers themselves buying a lot of tags,” Sweitzer says. In the near future, some carriers may begin to have portable or fixed RFID readers at some of their active dock doors to prevent mistakes in loading a Detroit pallet on a Dallas-bound truck, for example, Swietzer says. Another likely scenario is to fix RFID readers on forklifts to automatically read tagged pallets, or individual items on the pallet, as a forklift pulls up. Instructions to the forklift driver could even be displayed on a vehicle-mounted unit.
For now, Sweitzer says that carriers will gradually supplement existing systems, such as barcode readers, with new RFID technology as large customers like Wal-Mart take the lead in setting standards and best practices.
Even carriers not too involved in handling freight outside the trailer, such as many truckload carriers, may benefit from the greater precision afforded by RFID technology. At first, shippers will use tags and readers to more accurately account for freight loaded into a trailer, Sweitzer says. As a result, advanced ship notices sent from the shipper to the consignee will precisely match purchase orders from the consignee and load manifests given to carriers. That could mean fewer disputes regarding overages and shortages, he says.
Instead of RFID systems from large customers being a threat to existing hardware and technology systems, smart carriers will embrace the technology and find numerous benefits by using the capability to improve their own business processes, Sweitzer predicts.