Waukesha, WI March 6, 2002 A coalition of manufacturers and solution providers has formed a center of excellence to explore the potential applications and benefits of employing radio frequency auto-ID (RFID) technology within consumer goods supply chains.
The coalition joins Unilever and Georgia-Pacific with solution providers McHugh Software International, Intermec Technologies Corp., Marconi InfoChain and CHEP International in a bid to help consumer goods manufacturers take potentially billions of dollars out of the supply chain, increase supply chain velocity and improve customer service through the use of the wireless technology.
RFID technology is designed to complement traditional barcode labels with encoded microchips placed on pallets, cases and eventually, individual items. These chips are automatically read by scanners on forklifts, dock doors, conveyers, shelving or anywhere else product identification is needed. Proponents say the technology can improve productivity, reduce human error, and provide real-time visibility across the supply chain.
The participants will work together to define where, within the supply chain process, RFID will have the greatest benefit and translate these benefits into increased functionality within supply chain execution applications.
McHugh Software International is a provider of real-time enterprise logistics management solutions. Intermec Technologies Corp. offers wired and wireless automated data collection, RFID systems, mobile computing systems, bar code printers and label media.
Marconi InfoChain is a provider of supply chain solutions that track and trace and control assets with real-time information management tools. CHEP International is an international pallet and container pooling company servicing manufacturers and distributors in the consumer goods, meat and produce, automotive and other industries.
Unilever and CHEP are currently working with scientists at the MIT Auto-ID Center to validate the use of RFID tags to track inventory. The test involves a handful of distribution centers supporting a Sam's Club and Wal-Mart store in Tulsa, Okla. RFID tagged pallets, supplied by CHEP, are loaded in the factory and are then read at the distribution center and store. This information will be gathered and displayed by McHugh's LENS supply chain visibility solution already in use at Unilever for inventory visibility and tracking across its distribution network.
"Potentially, RFID chips and readers can smooth collaborative planning, forecasting and replenishment, as well as execution level functionality within the distribution center, possibly even to the point of eliminating mundane tasks such as issuing purchase orders or advance ship notices," said Simon Ellis, supply chain futurist for Unilever. "For retailers, this pilot is the first step toward addressing their biggest problem the last 50 feet, getting product to the shelf."
"The RFID Center of Excellence will pool the hundreds of years of consumer goods and technology expertise represented by the founding members to analyze the results of the MIT pilot program, identify specific supply chain and logistics applications of RFID technology and develop return on investment models," said Dan Gilmore, McHugh senior vice president of marketing. "This new technology could produce a quantum leap in supply chain capabilities, transforming how consumer goods are brought to market and driving billions in value to the industry."
The RFID Center of Excellence will produce an on-going series of materials that provide thought leadership to the industry on use of RFID in logistics and the supply chain. This will include white papers, seminar presentations and application scenarios.