Track Star

Radio Frequency Identification (RFID) is a simple concept with enormous implications," according to the Web-site of the Auto-ID Center. The Center is a unique partnership among nearly 100 companies and five leading research universities, including the Massachusetts Institute of Technology (MIT).

As www.autoidcenter.org explains, "Put a tag -- a microchip with an antenna on a can of Coke or a car axle, and suddenly a computer can 'see' it. Put tags on every can of Coke and every car axle, and suddenly the world changes. No more inventory counts. No more lost or misdirected shipments. No more guessing how much material is in the supply chain or how much product is on the store shelves."

Future Vision

This futuristic vision is becoming a reality as manufacturers and retailers alike deploy RFID to track items such as products, equipment and raw materials. To learn more about the current and future use for RFID, CGT asked three consumer goods companies how their RFID strategies are taking shape.

The Gillette Company is looking to RFID to shave errors and losses from its supply chain. With annual sales of nearly $8.5 billion, the Boston-based firm is the world leader in male and female grooming products, such as razors and shaving cream. In addition, it owns Duracell, the world's leading manufacturer of high-performance alkaline batteries.

According to Gillette spokesperson Paul Fox, the company's number one goal in deploying RFID is to ensure its products reach retailers.

"The retail sector loses $70 billion annually because products are not on the shelf, or because products get lost within the supply chain through being misplaced or stolen," says Fox. These losses, according to Fox, are why more CG companies are migrating to RFID technology.

According to Fox, Gillette will deploy as many new RFID chips that are currently in existence worldwide. The deployment will progress over the next 18 months in three main stages: Pallet-level tracking, case-level tracking and item-level tracking. One field trial will be in place by the second quarter of 2003 at a Gillette packaging and distribution center in Massachusetts, where RFID tags will be attached to cases of Gillette's Venus brand female razors. The company is installing RFID readers throughout the center for 100 percent tracking accuracy through the packaging, inventory and customer order areas onto pallets and out the back door.

Hopping Ahead

In the brewing industry, tracking beer kegs is enough to drive one to drink. The brewer must collect, wash and refill kegs before sending them to the marketplace.

According to Graham Miller, senior projects manager, logistics services, with the Edinburgh, Scotland brewing company Scottish & Newcastle plc, "Eighty percent of beer in the UK is dispensed in draught form, rather than in bottles and cans."

In the UK, the brewing industry annually loses four percent of its inventory of beer kegs, a number that translates into costs in American dollars of between $15 million and $20 million per year. As a result, Scottish & Newcastle began implementing RFID tags to more accurately track its beer kegs.

With total sales of $6 billion, Scottish & Newcastle is the number one brewer in both the UK and Europe. The firm's most popular UK beer brands include Courage, John Smith's, Kronenbourg, McEwan's, Newcastle and Theakston. The company also distributes wine and spirits, and it operates hundreds of pubs. In addition, Scottish & Newcastle makes the most popular dark beer in America, Newcastle Brown Ale.

Scottish & Newcastle now has RFID tags on 1.9 million beer kegs, according to Miller. These are "read-write" tags, meaning the company can write data on the tag about such things as when the barrel was filled, or when it was delivered. The technology for the tags is being provided by TrenStar, a global leader in mobile asset management, that specializes in the brewing, food, beverage and chemical industries.

The RFID program at Scottish & Newcastle includes a web-enabled reporting system. This system enables wider distribution within the company of data about the kegs and it gives customers access to data such as information about freshness of stock.

The company achieved ROI on RFID in two years, Miller reports. And thanks to the RFID tags, Scottish & Newcastle has cut its loss of containers in half, he says. In addition, the system has reduced container cycle times by four days, representing a reduction of $1.5 million in asset management costs.

Excel Beefs Up

With production facilities in the United States, Canada and Australia, Excel Corporation provides premium beef and pork products to retail and commercial markets. Randy Cooper, corporate project manager at Excel, explains that prior to implementing RFID, the company used a system in which a camera examined drilled hole patterns on each of the company's meat hooks. To improve accuracy and read-rates Excel turned to RFID last year. The company partnered with Intermec Technologies Corp., a leader in global supply chain solutions including the development and integration of RFID systems. Intermec provides durable, high frequency RFID chips that Excel attaches to the plant's meat hooks. The chips are far cheaper to install and also create more reading sites within the plant.

"With the camera-based system, we had an average of six reading sites per plant. Now we have an average of eight, and we expect this number to grow," says Cooper.

Excellent Benefits

Excel hopes to have the new RFID system installed throughout all of its plants by the end of 2003. Anticipated benefits, according to Cooper, include better asset tracking, lower system maintenance requirements and more effective use of human resources.