Manufacturing companies and their supply chain partners could gain a lot from recent advances in location intelligence tools like radio frequency identification (RFID) and global positioning systems (GPS), industry experts say.
Some of the latest advances in RFID and GPS are already allowing innovative companies to manage parts and equipment more effectively, increase security and enhance fleet management capabilities. What's more, according to supply chain analysts, these companies are using data gleaned from RFID and GPS technologies to improve overall location intelligence systems and make better business decisions.
GPS and RFID are also being used in conjunction in some cases, said Tim Payne, a supply chain management research director with Stamford, Conn.-based analyst firm Gartner Inc. But, he added, this is happening primarily on the fleet management and logistics link in the supply chain.
One place a person might find GPS and RFID being used in conjunction is in company "yards," Payne said, where trucks and trailers are put together. Some companies have hooked up truck cabs with both RFID readers and GPS transponders, while trailers are given standard RFID tags, he said. Whenever a truck hooks up with a trailer full of products or equipment, it reads the RFID tag on the trailer. That information, combined with the GPS data, then gives workers in the home office a complete picture of where the trailer is, who has it, what's in it, and where it's going.
Research being done on the security front, Payne said, makes it possible to virtually "fingerprint" RFID tags, or make it so that each RFID tag gives off a unique response, like a fingerprint. He said this advance could make it easier to authenticate high-end goods as they are transported about the globe.
"There is a database that holds the fingerprints of these tags to ensure authenticity," Payne said, "but you would also have to combine this technology with making sure that the tag is tamper-proof."
RFID on the shop floor
Manufacturers can benefit today from RFID systems designed to track equipment that resides within the shop's four walls. Payne said some manufacturers are using RFID technology to track and trace boxes and roll cages that are used to move tools and parts from one manufacturing station to the next. "The business case for using RFID for mobile asset optimization is often quite a compelling one," he said.
The use of RFID to track tools and other assets would suit Michael Doyle just fine. One of Doyle's jobs as process development engineer for a Franklin, Mass.-based medical equipment manufacturer is to coordinate between the shop floor and company brass and help ensure that customer orders are filled as quickly, precisely and cost-effectively as possible.
And Doyle is certainly no stranger to missing tools, parts and equipment.
The problem is that the tools and parts that go missing aren't the type that can be easily replaced during a trip to the Home Depot, Doyle said. They are costly, high-precision tools, built in-house and used to create highly customized products to exact specifications.
A common occurrence, he said, is that customers will reorder products that were built for them before. In these cases, the tools that were created and used for the original order were supposed to have been cataloged and stored properly so they could easily be accessed and used again.
"But it happens all the time," Doyle said. "You go to get the part and, lo and behold, the part is no longer there."
When that happens, he added, the tools have to be re-approved and rebuilt, a process that increases the overall cost of the project considerably. "But the worst part," he said, "is the loss of lead time which is incurred."
Doyle said that if it proved cost-effective – and that's a big if -- his firm would certainly benefit from an RFID-based asset management system, where tags are attached to specific tools, parts or equipment, and those tags are scanned as items are taken from workstation to workstation. He'd like to see the day when it's easily affordable to track tools and equipment in similar fashion with GPS technology. That way he could get a complete view of where each piece of valuable equipment is at any given time.
Bulk warehouses poised for RFID
Bulk warehousing operations are proving to be an area that can benefit greatly from the latest RFID systems, added Steve Banker, a supply chain analyst with Boston-based ARC Advisory Group.
Bulk warehouses differ from regular warehouses in that there are no huge racks or shelves, just painted areas on the ground that designate where specific pallets should be placed. Pallets can then be stacked on top of one another vertically.
While there may have been one RFID tag at the bottom of a stack, RFID scanners until recently could not scan pallets on the higher levels of vertical stacks. As a result, Banker said, pallets from higher up that were moved via forklift were often misplaced.
"What has emerged here are companies like Sky-Trax Inc. that put two-dimensional barcodes on the roof and then have an optical camera on the roof to read those sensors," he explained. "That way, they know the XY coordinate line where that forklift is at all times."
Banker said that Sky-Trax can also set the RFID on an optic camera to make sure that companies get the right height location of certain pallets in bulk warehouses.
"You can enforce rules and make sure things get put back where they're supposed to be put back," he said.
Trending toward greater location intelligence
With the advent of GoogleMaps and similar geographical mapping systems, combined with data gleaned from managing fleets with GPS and RFID, many manufacturers and their supply chain partners are well-positioned for location-based analytics, or location intelligence.
Location intelligence as a discipline draws on such tools as GPS, RFID, geographic information systems and aerial maps to help users gather data about locations, identify patterns and make better business decisions.
And that's really the next big step that many companies still need to take. Gartner's Payne said, "Taking that information or driving the data into some form of analytics or performance management so that you can actually start to derive some insight from what you're seeing [is what needs to happen next],."
Having such information as where a container is in relation to where a company thinks it should be can give another layer of value to manufacturers, he said, and that can help them better allocate resources and make inventory-related decisions [more effectively].
"Having more insight from that data," Payne said, "helps users make better decisions when the execution isn't happening quite according to plan."
Mark Brunelli is a freelance writer.