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Logistics: Adding Customer Value with RFID

Third-party logistics (3PL) providers, like California-based Megatrux Inc., are also partaking of the benefits of RFID for themselves and their customers.

At Megatrux's new company-owned facility in Rancho Cucamonga, Calif., the company has initiated RFID tagging, tracking and quality control services from Montreal-based Ship2Save for two customers that are shipping goods to Wal-Mart. The Ship2Save solution is deployed in conjunction with fixed and mobile RFID readers from Motorola and RFID label printer/encoder labels from SATO America. The RFID system is integrated with enterprise resource planning (ERP) and transportation management systems (TMS) from TMW Systems.

As shipments arrive from the two participating suppliers, the Ship2Save software generates electronic product code (EPC) Generation 2-compliant labels using a SATO RFID printer. These labels are applied to both cases and pallets of product before merchandise is moved to storage locations within the warehouse. Employees use a hand-held Motorola RFID reader to scan the pallet tag and a bar-coded location label. This data is then transferred wirelessly to the warehouse management system (WMS) so that the pallets can be located for outbound shipping.

The RFID tags not only include EPC identification numbers, but also tracking information relevant to the shipping history of the merchandise, such as production facility/lot number, item number, ocean bill of lading manifest information, warehouse entry/exit gate, warehouse bin location and shipping purchase order. When orders are shipped to retail customers, each carton is tagged again with an RFID plate that is then scanned onto master outbound pallet labels.

Megatrux has equipped five of its dock doors with Motorola RFID readers, which scan the pallet tags as shipments are loaded onto the trucks. Large LCD display screens mounted nearby provide a confirmation message as each pallet moves through the portal, as well as alerts if a pallet is loaded onto the wrong truck. Scanning the outbound RFID tags prompts the system to close the order, adjust inventory, send advance shipping notices (ASN) and issue customer invoices automatically.

By automating the shipping and receiving process, Megatrux has been able to improve order accuracy and operational efficiency, and provide a real-time audit trail to reduce shipment disputes and chargebacks. The company estimates it will save between $50,000 and $100,000 per year at the Rancho Cucamonga facility (its busiest location, which ships more than 1 million cartons to Wal-Mart annually), and Pelle hopes to expand the RFID deployment to other Megatrux facilities for additional applications. Megatrux customers also benefit from RFID through real-time tracking of their inventory and compliance with retailer mandates.