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Keeping Tabs
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.
Software Solutions
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.
Making Waves
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.
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