April 1, 2005
Advanced distribution software and RFID systems help manufacturers monitor the supply chain.
by Lynn Petrak
So much for manually logging and sending products on their way with hope that the items arrive fresh and safe to their destination. Thanks to advanced distribution software and the possibilities of radio frequency identification (RFID) systems, the automatic recognition and tracking of dairy products along the production line, warehouse, loading dock, truck route, store back room, retail case and beyond is continually evolving to a newer, more sophisticated level.
In this sense, Big Brother-style technology isn’t so bad. The ability to keep a virtual eye on products throughout the storage and distribution chain can streamline operations, prevent losses and boost profitability, via labor efficiency and reduced out of stocks. On the marketing side of the business, learning more about where, how and when various products are purchased opens up other merchandising and product development opportunities.
Dairy products are at once ideal and challenging for identification and tracking advances. On one hand, such systems can be useful because of the perishable nature of dairy products. “If a product has a very specific shelf life, RFID technology would help them manage that and balance it better,” says Steven Dods, product development manager for labeling for Diagraph, a St. Charles, Mo.-based division of ITW that specializes in marking, coding and labeling systems and supplies.
Ian Carver, product manager for labeling/RFID systems for product identification equipment supplier Videojet Technologies Inc., Wood Dale, Ill., agrees that this is a market not to be overlooked. “With perishables, the product life is so short lived that RFID is a technology that enables complete inventory visibility,” he says.
On the other hand, the application of high-tech identification and tracking programs in the dairy industry is not a given. For one thing, many systems are not inexpensive. “Investment can be hard,” says Robert Hochberg, president and chief executive officer of supply chain software provider Numeric Computer Systems Inc. (NCS), Hauppauge, N.Y. “Someone may say, for example, ‘Oh, I have to give you X dollars?’ but what needs to be said is, ‘Yes, but I will save you.’”
Also at issue is the effectiveness of the technology on dairy products. At this point, dairy products pose certain difficulties for RFID in particular because most dairy foods and beverages are liquid or contain at least some water in their base and hence absorb radio waves and interfere with accurate readings.
For dairy processors, choosing the latest identification and tracking systems can be challenging. Mark Verheyden, vice president of marketing for auto ID system supplier Accu-Sort Systems Inc., a sister company of Videojet based in Philadelphia, offers a few recommendations. “The first step is to understand your objective — do you want to increase visibility as to where things are, do you want to decrease shipment errors or is your biggest problem tracking quality and consistence of temperature? Start with the problem you want to solve,” he says.
Carver, for his part, agrees. “It’s all about understanding your objective and completing the homework before you decide what to do,” he says.
Manual identification and tracking of products may soon go the way of the proverbial buggy whip, as paper and pens are replaced by high-tech central processors and portable devices. Indeed, there are plenty of software programs and accompanying units that can help dairy processors better manage their warehousing and distribution processes.
For its part, NCS offers a range of front-end and back-end supply chain software solutions for direct store delivery (DSD), route accounting and mobile capability. Among other innovations, the company has developed a new order-to-cash system called “eRMS” and a new mobile solution called “eXpress Route” that ties into the company’s existing “eXpress Suite” automating the activities of the merchandiser, delivery and sales teams.
According to Hochberg, the use of handheld units in the cold supply chain has grown in recent years as well. “There have been two significant changes and they are tied to our offerings. First, with wide area access, the handhelds that used to be batch can now be online,” he explains, adding that NCS has partnered with the logistics division of one of the nation’s top shipping conglomerates on integrated solutions. “That product actually has a GPS tracking system and real-time messaging system, so you can go on screen and see where the truck is and talk to that person. We are leveraging that technology into our product, so people can use our eXpress Route and [that company’s] logistics concurrently.”
NCS’s products also are designed to address customer demand for Service Oriented Architecture. (SOA), an evolving approach in information technology toward collaborative systems that work on a more widespread, or even global basis. “That is a hot term in the computer world right now,” Hochberg says. “Everyone wants an SOA approach.”
One example he cites is a major national dairy company that recently approached NCS to install a pilot SOA program that effectively links its pre-sales force with mobile workers and operational management on one system. “We have given them a platform to launch multiple mobile applications for different uses within the framework of a single set of services,” Hochberg explains.
Besides NCS, other suppliers offer various software and hardware options for the purpose of more efficient and cost-effective warehousing and distribution, from Dallas-based Texas Instruments to Waukesha, Wis.-based RedPrairie.
A provider of both distribution management systems and RFID supply chain solutions, RedPrairie recently helped Montpelier, Vt.-based Cabot Creamery automate its manual distribution environment across multiple sites. “Our desire to improve our operations as well as comply with FDA quality control mandates were really at the heart of our decision to implement new supply chain technology,” says Ralph Viscomi, Cabot’s vice president of information services. As part of its solution , Red Prairie provided Cabot with automated inventory management, including a visibility application called LENS(r) and a feature called Commander/QA recall which allows the dairy to track and recall by lot number, code and expiration date.
Meanwhile, RFID technology continues to be a big supply chain buzzword. “I would say in the last year it has gone from two or three customers to almost every customer at least asking about it,” Carver says. “You can’t seem to open a trade magazine without seeing RFID in there, and a lot of people just want to learn about the technology.”
To refresh or for those not familiar with the technology, RFID is an automatic identification technology through which digital data enclosed in an RFID tag is captured by a reader using radio waves. RFID tags consist of an integrated circuit attached to antennae, along with certain protective packaging. Tags, which are available in different sizes, can be either passive, which requires no batteries, or active, which are powered by a battery. Embedded in packages, pallets and products, the tags are used in combination with a radio frequency transmitter and receiver controlled by a microprocessor. The reader captures data from the tags, then routes information to a central computer system for further data processing.
Despite application challenges involved with reading liquid products, RFID suppliers report continuing interest from grocery suppliers, including dairies, and are working on solutions for at least some aspects of dairy storage and distribution. Accu-Sort and Videojet, who have partnered on a new FAST Tag(r) integrated RFID and bar code system that includes readers, printers, applicators, controls and compatible data management software, are experimenting with their own options.
According to Carver, future possibilities could involve applying tags in returnable assets like recyclable containers and totes commonly used in the warehousing and distribution of dairy products. “If you are recycling plastic instead of using a corrugated box, there is an opportunity there,” he says. “You can get an actual tag embedded in epoxy resin in a tote — that way you can buy tags once and it’s just a matter of rewiring them as they go through the process again.”
Verheyden concurs. “For asset tracking, you could even put an RFID tag on something like a forklift or truck, to see where it is in the process,” he says.
Another supplier with an eye on RFID applications for perishables is Diagraph, which manufacturers and distributes marking, coding and labeling systems and suppliers ranging from RFID and bar code printer systems to inkjet systems to label applicators. In addition to introducing cutting-edge new RFID systems, the company is also anticipating potential applications for liquid items. “Much work is being done in getting tags lifted off a product at a 90-degree angle to be able to read it, and in the future, a product could even contain a flap on the side where a tag could be embedded,” Dods says.
Another near-future dairy application for RFID involves temperature control. “There are RFID tags with temperature devices that can track and see if a product is cool. You can control it using RFID combined with sensing technology,” Verheyden explains. Dods, too, says that the potential is there. “There are sensors on tags — you can barely see them — that can track temperature. Some day, you’ll be able track it all through,” he predicts.
As for price, most experts do not believe the cost of RFID tags will likely be reduced to a great degree. “As far as investments, the price of tags is 35 to 40 cents, depending on the volume you are buying. The process is in its infancy and we’ll eventually see costs come down, but with the current technology, I can’t see it less than 15 cents a tag, due to the material costs and the process,” Carver says. Likewise, says Dods, “I think it will still be a 15-cent item at the end of the day, especially as a tag has more capacity and range. People will want to store more than just an item number, serial number and company prefix to make it worthwhile for them.”
Still, according to Dods, dairy manufacturers shouldn’t give up on the concept of using RFID. “Dairy people have heard it doesn’t work, but there are other things being done to make it more usable,” he says. “There will be an improvement in it and it will be used.”
Lynn Petrak is a freelance journalist based in the Chicago area.$OMN_arttitle="Keeping Tabs";?>